New Pricing @ Netflix

Netflix has started down a slippery slope of making their awesome value not so awesome. Allow me to explain.

New Pricing

Netflix has announced that all accounts will change in pricing come September 1st (or before). The new pricing is:
  • $7.99 - For unlimited streaming
  • $7.99 - For 1 DVD at a  time
  • $15.98 - For unlimited streaming + 1 DVD at a time
  • $17.98 - For unlimited streaming + 1 DVD or Blu-Ray at a time
For reference I currently am subscribed to the 1 DVD/Blu-Ray + Unlimited Streaming for $11.98. That means I will be paying 50% more for the same service I am already getting.
Don’t get me wrong I know that Netflix has to cover costs, and heaven forbid make money, but I feel like the service is a bit on the steep side for the combo pack.

Netflix’ Reasons

The good folks at the Netflix blog have stated:
Last November when we launched our $7.99 unlimited streaming plan, DVDs by mail was treated as a $2 add on to our unlimited streaming plan. At the time, we didn’t anticipate offering DVD only plans. Since then we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering. Reflecting our confidence that DVDs by mail is a long-term business for us, we are also establishing a separate and distinct management team solely focused on DVDs by mail, led by Andy Rendich, our Chief Service and Operations Officer and an 11 year veteran of Netflix.
That seems fair, if you aren’t making the money then you aren’t making the money, and you have to adjust.

Now I am not saying I want Netflix to loose money, and I am not saying I want them to give me things for free. However I feel that after several years of being a happy customer and praising them for things they have done right, and fighting for them when they are loosing the battles with Hollywood, that we should be treated as something better than a common customer when it comes time to split services.

I am sure having insight to the numbers of cost of streaming vs DVD rentals, and such would make it easier to accept their argument but honestly I feel like it is a steep price change from $12/month to $18/month.

Pricing Suggestions

I personally think that the base prices of $8/month for each service is fair. If you only want DVDs, fine, $8. If you only want instant streaming $8. However I feel as though we are not being given incentive to purchase both packages from Netflix anymore.

A simple example is a family like mine. We have the full package now for $12/month and on average we watch 1 DVD a week. For the suggested $6 price hike I could instead opt for the instant streaming service only and take my $8 to RedBox and get 8 movies where I would get 4 with Netflix. The difference of course is I have to do a little leg work to find the DVD I want and go and get it, instead of having it mailed to me from Netflix.

My suggestion to Netflix would be, offer either package as an add-on for a discounted price, even $2 off would make it seem like a damn good deal.

  • $7.99 for Streaming
  • $7.99 for DVD
  • $13.98 for Both
  • $2/month to add BluRay
That would make my family situation $15.98 for the whole package. Still only saving me on the entire process $2, but that is a more affordable plan in my eyes and more competitive with the market (Blockbuster Express, and RedBox).
Netflix’ Move
I am sure Netflix won’t give a second thought to this plan, and it seems like a majority of people are ok with it, but I think Netflix will find more customers will opt for 1 of the two plans rather than both, and save their hard earned dollars for use at a RedBox or Blockbuster Express to get the new releases and the exact movie they want, the day they want to watch it.
I think I should also note that if Netflix offered a better catalog of newer movies in their instant streaming packages, then they would see that DVD shipments would drop drastically. I think it time they go down to Hollywood and bash in some heads to get the new releases available sooner, as in at all.