Tuesday, July 12, 2011

Netflix Doesn't Care About You

If you're a current Netflix customer with a DVD or Blu-ray plan and you also stream movies with Watch Instantly, Netflix has a clear message for you: We're lowering our prices (which really means we're jacking them up sky-high, but you're stupid enough to believe us, right?), and if you don't like it, buzz off; we don't really even care about you, anyway.

Let me provide some context. Prior to today, Netflix already offered a $7.99/month plan for streaming only (or "Watch Instantly" in Netflix parlance). If you wanted to rent DVDs by mail, you paid $9.99/month and you also got streaming as a bonus (originally there was no streaming-only plan, and streaming was first introduced as a bonus for DVD customers). If you wanted the option to get Blu-ray discs instead of DVDs for titles where Blu-ray was available, you paid an additional $2/month.

Today Netflix announced that they're now offering a DVD-only plan for $7.99/month, a totally new option. Good for them; everyone should be happy, right? Well unfortunately that's not the only change Netflix made. The company also announced that it will be increasing the cost of the DVD plus streaming plan from the current $9.99/month to $15.98/month ($7.99 + $7.99; you pay full price for both the DVD and streaming plans, with no discount for bundling the two).

So basically, you get absolutely no improvement to your service whatsoever, but you now have to pay 60% more (an additional $6 more per month, which translates into $72 more per year) than you were paying before, and you get nothing new in return.

Remember how I said you could pay an additional $2 more per month on top of the old $9.99 plan to get Blu-ray discs when available? Netflix didn't say anything in their announcement about Blu-ray, but logging into https://www.netflix.com/SubscriptionChange confirms that there will still be an additional $2/month Blu-ray fee on top of the new $15.98/month plan. This means that if I decided to go with the new Blu-ray and streaming plan (which Netflix intends to opt me into on September 1st), I would go from paying $11.99/month to $17.98/month (over $215/year). Notably, more than half of what's in my disc queue right now is only available on DVD, not Blu-ray.

So why am I bothering to write a big ol' rant about all this? Netflix is a business, and it has the right to change its pricing structure and plans as it sees fit. I just find it extremely disappointing that a company that has historically been an innovator and leader in movie rentals is taking a major turn in the wrong direction with this egregious price hike (while simultaneously claiming to be "offering our lowest prices ever" in typical doublespeak PR-spin fashion). Maybe on some level this move could benefit the company, since Netflix will likely increase its revenue even if a significant percentage of current DVD or Blu-ray customers were to abandon Netflix completely or switch to one of the $7.99 plans. On the other hand, it's a fact that Netflix is going to lose loyal customers over this, and it's going to damage the company's perception amongst potential, current, and soon-to-be former customers.

If you're frustrated with Netflix over this boneheaded move, don't worry; there are plenty of options available to you. I'm not aware of other companies that offer a subscription plan that includes both discs and non-disc rentals for one flat rate, but you can easily mix and match from various services if you're unwilling or unable to pay Netflix's burdensome new prices.

If you want streaming or downloadable rentals:
  • Hulu (hulu.com) offers streaming of many TV shows and movies for free (with advertisements)
  • Hulu Plus costs $7.99/month and offers access to more content in higher definition on more devices, and although it unfortunately doesn't preclude you from advertisements, it may be a better fit for you than Netflix if you're more interested in TV shows than movies
  • Amazon Instant Video (amazon.com/video) currently has about 6,000 videos (movies and TV episodes) for individual rental or purchase, all of which can be viewed at no additional charge for Amazon Prime members (Amazon Prime gives you free two-day shipping on all Amazon-fulfilled orders for a flat rate of $79/year, which breaks down to about $6.58/month)
  • Apple's iTunes Store (apple.com/itunes) has lots of movies and TV shows for individual rental or purchase (no monthly subscription option is available)
  • Blockbuster (blockbuster.com) offers individual streaming rentals (some of which are free), but their software is only compatible with Windows and their device support is rather limited
  • You can downgrade your Netflix plan to $7.99/month for unlimited streaming only (https://www.netflix.com/SubscriptionChange)
If you want DVD or Blu-ray rentals:
  • Redbox (redbox.com) is a really inexpensive option (typically $1 or $1.50 per DVD/Blu-ray, which you rent from a local kiosk), but their selection is very limited and mostly consists of popular new releases plus a few video games
  • You can try your local video rental store for items that Redbox doesn't stock (search your local phone directory or try searching bing.com/local or maps.google.com for the phrase 'video rental near' followed by your city and state)
  • Blockbuster also has a rent by mail plan for $11.99/month (with Blu-ray and video game rentals included) which allows up to 5 trade-ins per month at local Blockbuster stores (which is great if you still have a Blockbuster store in your area) and claims to get some new releases up to 28 days before Netflix and Redbox
  • You can downgrade your Netflix plan to $7.99/month for DVDs only, or $9.99/month with Blu-rays included (https://www.netflix.com/SubscriptionChange)

Do you know of any other good Netflix alternatives? Please leave a comment.

As for my family, we're not the least bit interested in spending over $215/year on movie rentals, and we're strongly considering putting our account on hold on August 30th for 90 days (https://www.netflix.com/AccountHold) to give Netflix a chance to reconsider its pricing structure, after which we'll probably cancel our membership. Frankly, this could be a good opportunity for Netflix customers to consider cutting out some distractions in their lives to focus on more important things.

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