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Title: Hefty Netflix price increase


Jim Donahue - July 12, 2011 07:04 PM (GMT)
Just got notice from Netflix that rates are going up--DVDs and streaming will be counted as separate plans:

QUOTE
Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

   Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
   Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month

Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don't need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.


I do use both, so I don't want to cancel one. But a 60% price hike, essentially? Seriously???

My cable bill just went up a lot, too, as a special deal I was on ran out. I don't feel like bouncing around to other providers--that's just a pain in the ass.

Grrrrrrrrrrrr.

Chris Stangl - July 12, 2011 10:20 PM (GMT)
Well, this finally motivated me to cancel all Netflix streaming. My Internet service is simply too poor for streaming movies to work at all, so I had been paying for streaming without using it for a year. I'm also happy to stop participating in encouraging streaming video over tangible media — I just don't trust it.

In terms of the number of discs I actually end up watching a month (usually 8, 0 at worst, 12 at max), the pricing ends up about the same as old tyme video rental shops, if not more. Were there a remotely acceptable mom and pop video shoppe anywhere near my neighborhood, I'd be jumping off the Netflix Express immediately. But there is not, and so I ride on.

Marc McCloud - July 13, 2011 02:41 AM (GMT)
I've already have had two emails today about how they will be renting from me exclusively. This news, along with FIVE Blockbusters in my town of 70,000 hanging by a thread, 2011 could end up much better than I thought it would.

Bill Picard - July 13, 2011 04:29 AM (GMT)
I'm with Chris. As of September 1 I'm done with streaming.

John W McKelvey - July 13, 2011 05:14 AM (GMT)
Yeah, i think I'll be ending streaming on Sep 1, also.

James Cheney - July 13, 2011 06:12 AM (GMT)
I've heaped up humungous portions of steaming, streaming Netflix the past several months fearing this would happen and wanting my fill and then some. I won't exhaust every last thing I want to watch before September, and I'll miss the odd items unavailable on DVD, but I'll get over it.

I recommend the 2 dvds at a time deal. It's cheaper than what I'm currently paying for combined service.

Next up in my involuntary home video 12 step program: giving up the movie tier on cable. I guess I could read the calendars for the channels involved and find what films being played are also offered by my diminished Netflix account ...but that sounds like a sweaty addict speaking as withdrawal threatens. I'll shake the MGM Lion off my back, go cold turkey, I swear! This economic patch we're going through may not afford me the luxury of doing otherwise and may make a confirmed Iconoclast out of me yet.

Peter Nepstad - July 13, 2011 02:32 PM (GMT)
This one is a tough call for me. Streaming is great for if you don't have something specific in mind for what you want to watch, but then getting the DVDs out helped me to grab the shows that I really wanted to watch but weren't available on streaming.

That said, I've got 400 items in my streaming queue, and 27 in my DVD queue, so I'll be dropping the physical DVDs. If I want a rental of a new hit movie, I can hit a local Redbox.

This also frees me (and other consumers) up to consider Netflix alternatives like Hulu Plus. The addition of the physical discs was the killer app that make Netflix superior to the alternatives. With that gone, its whatever has more of the type of show you like.

I imagine if I had cable I might go the other way, but I don't, not even basic. So streaming on Netflix and Hulu is how we watch TV, and $10 bucks a month is a pretty good deal for that.

But man, I really have to get through the rest of the Sharpe series before September? I'm only on 11 (Sharpe's Mission)!

Jim Donahue - July 13, 2011 06:55 PM (GMT)
It's been odd watching the Netflix-related posts on Twitter swing from about 95% anti-Netflix and 5% "Hey, it's just business" yesterday to about 50/50--maybe even 40/60.

QUOTE
People need to calm down about this NetFlix pricing "hike." $16 for hours of entertainment per month is still a great deal, people.

I'm not clear on why $10 to $16 is a "hike" and not a hike.
QUOTE
This whole Netflix thing is a travesty. I hope people can pull together and cope with the unfairness of having to pay for entertainment.

I was unaware I'd been getting it free all these years.
QUOTE
the #netflix price bump isn't that bad, It breaks down to 53 cents a day you need to save. If you can't do that you don't deserve it.

Wow, I guess I should send a thank you note, then.

Yeah, all told, it's not a terrible deal. I think the obnoxious tone of the email from Netflix pissed me off as much as the price hike, if not more. But the fact that folks are upset that consumers are voicing displeasure about a 60% hike is bewildering to me.

Also, I just realized that I only got the unlimited, one-at-a-time DVD plan in order to get the streaming. I never, ever get more than two DVDs a month, and there's also a $5-a-month plan in which you get two disks. So, if I keep streaming, that comes to $13 a month combined (streaming is $8). A 30% price hike hurts 50% less than a 60% price hike.

John W McKelvey - July 14, 2011 12:44 AM (GMT)
To me, the selection makes it an obvious choice to favor DVDs over streaming... Streaming does have the ocassional exclusive (which is frustrating even now when I HAVE streaming, because I want a couple of those on DVD), but they have tons more films on DVD than streaming.

Hal Horn - July 14, 2011 12:32 PM (GMT)
I'll be keeping streaming. Too many good rarities there.

David Austin - July 14, 2011 02:41 PM (GMT)
Have they made any statements about using the additional revenue to increase streaming licenses? Because that would make sense. Otherwise, there is just not enough available streaming material for them to compete with Hulu or other services.

Rob Peace - July 14, 2011 05:07 PM (GMT)
It's an easy adjustment for me. I've been on the 3 discs at a time program, and will be reducing to 2 discs plus streaming. My monthly fee will go down by a dollar.

Lenny Moore - July 14, 2011 08:14 PM (GMT)

Chris Stangl - July 15, 2011 09:35 AM (GMT)
So Let Me Get This Straight... This blog entry summed up the bulk of my gut reactions to the first wave of bitching about the price hike. More eloquently, a number of cooler heads invoked Louis C.K.: Everything's amazing right now and nobody's happy.

So the outrage spreading across Twitter was hilarious and fascinating and came in a few flavors.
1. CANCEL MEMBERSHIP! BOYCOTT! Netflix is abusing me, I don't want to pay more...
... no matter what that increase might be, or why, or if the service is still a good value. This is a pretty transparently knee-jerk reaction, and easily dismissed. Plenty of people are discovering that once they stop and think about the options they actually want and use, and adjust their plan, they end up paying LESS. Indeed, everything's amazing, nobody's happy.

2. Ha ha, who cares, I just download torrents for free!
Now MHVF policy obviously prevents endorsement of that sentiment, but what kind of short-sighted entitled idiot thinks this way? Thousands of Tweeters, apparently, bragging under their real names that they steal digital media. Now moral issues aside (hey, it's the 21st Century! I can just say "moral issues aside" and they go away like THAT!), I'm baffled that these people I) are so blinkered they don't acknowledge "downloading for free" as stealing, and II) don't understand that when you steal from a business it has to raise prices, increase loss prevention measures and/or eventually close shop. i.e. if everyone steals all their entertainment content, entertainment producers and distributors will go out of business and won't make movies/music/games/comics to steal. I know you guys grasp this, but for God's sake...

3. Netflix, for $7 you best make EVERY MOVIE available streaming!
Yes, I'm sure they would like to, but that is not up to them. As we've noted above, coping with studio streaming licenses is a major chunk of Netflix's operating costs. I do seriously doubt that Netflix will try to explain this or attribute the price hike to licensing fees. Surely this is the case, but it might sound like finger pointing and blame-dodging, since so many consumers clearly do not understand this factor.

4. Screw Netflix, they just sent me into the arms of Redbox.

Seriously, soooo many people are indicating that Redbox is a MORE than adequate substitute for Netflix. Now folks, there's the fully stocked BevMo! and wine cellar over here, and on the other side of the street a Coke machine with nothing but TaB and Fanta in it. I dunno how other customers are using Netflix, but that people can even find something in a Redbox that vaguely interests them is baffling.

John W McKelvey - July 15, 2011 04:03 PM (GMT)
QUOTE
Plenty of people are discovering that once they stop and think about the options they actually want and use, and adjust their plan, they end up paying LESS


Oh? Certainly not me. It's actually 60% MORE to my bill, basically forcing me to choose between them and give up streaming, which sucks because I was enjoying both services. Not so hillarious to me. :/

And people saying they that if Netflix is going to make such a dramatic price increase, they expect to see it yield dramatically better selection sounds like they do have at least a reasonable idea of licensing fees. They want a large chunk of the increased revenue to go towards those fees... makes sense to me. Though, as you say, I doubt that will actually wind up happening.

As for customers switching to Redbox, I agree except I'm sure many people (though none of us here!) have no interest in renting films beyond just picking up the few most mainstream new releases anyway, so Redbox wouldn't be any kind of absurd step down for them but a reasonable decision.

Chris Stangl - July 16, 2011 12:50 AM (GMT)
Pardon me, I was slightly intoxicated while posting. What I meant was that based on what I'm hearing a lot of customers are realizing that all they really use or want is the streaming service — Roger Ebert pointed out that by dropping the disc option, he ended up paying less, and he's not the only one. Personally, until the price hike, I was only paying for streaming because it was so cheap that I was too lazy to go click the button to turn it off, even though I wasn't using it. None of that is universal, of course, but I do wonder if either/or use is prevalent enough that it factored into the newly separated service plans.

Anyway - If Redbox invented something like a Blackbox that rented films noir, a Quietbox that rented silent pictures, a Kaijubox filled with rubber suit operas, or a Yellowbox loaded with gialli, well hey, that'd be different.

Lisa Larkin - July 16, 2011 04:36 AM (GMT)
The trouble is, Red Box is the only meatspace option since the implosion of Blockbuster and Hollywood Video, at least in these parts. Blockbuster ran all the mom & pops out of business decades ago and now there's a video vacuum filled only by those kiosks.

I just did a search to see if any new video stores have emerged in my neighborhood since Blockbuster's bankruptcy. The only hit within 10 miles appears to specialize in Tagalog movies, though I'm pretty sure the little Indian market on San Marcos Blvd rents Hindi movies. There is one really great video shop in San Diego but it's way down in Kensington, more than 30 miles from where I live in north county. I used to rent Hong Kong movies from a karaoke shop in Kearny Mesa when I lived in La Jolla, but that's too far away from me now too.

Bob Lindstrom - July 16, 2011 03:53 PM (GMT)
For me the real issue is the hefty 60 percent (!) increase which comes on the heels of a price increase last winter. A more reasoned and gradual increase might have gone down better. Suppose gasoline prices went to over $6 per gallon overnight? We'd hear wailing and gnashing of teeth. Yet, it's the same percentage of increase.

And while I still think NF is good, if not great, value, the arrogance of the Netflix exec who described the increase as "the price of a couple of lattes for most people" really rubbed me the wrong way. I don't pay $3 or more for a cup of coffee because A.) I can't afford it, B.) I won't afford it because it's appallingly poor value. This "Let them eat cake" mentality can't be good for the Netflix brand image.

Marty McKee - July 16, 2011 04:14 PM (GMT)
I just decided to switch from my current 3-discs-plus-streaming account to a 2-discs-plus-streaming account, and I will pay one dollar less than I have been paying. Sure, I get one fewer DVD at a time, but I got plenty around here to watch anyway. It's not much of a hardship.

I have naturally assumed the reason Netflix is doing this is to encourage people to drop all their DVDs and go all-streaming. Judging from their actions the last year or so, I'm sure Netflix now hates DVDs and wants to get rid of them. And when they do totally abolish DVDs, I bet the company will enjoy firing thousands of workers.

James Cheney - July 16, 2011 04:26 PM (GMT)
The "latte exchange rate" is used with amazing frequency these days to justify all sorts of imprudent spending for stuff you don't really need. Inside sources tell me that even Pentagon officials have been trying it on for size when proposing troop surges lately!

I agree with Bob in every respect. It's like saying that your upped rates are no more expensive than weekly groceries at Whole Foods, or a brunch for a family of five at Balthazar's in NYC followed by a trip to a multiplex plus gas (which costs no more than a couple Lattes these days too).

John W McKelvey - July 17, 2011 01:49 AM (GMT)
QUOTE (Marty McKee @ Jul 16 2011, 10:14 AM)
I just decided to switch from my current 3-discs-plus-streaming account to a 2-discs-plus-streaming account, and I will pay one dollar less than I have been paying. Sure, I get one fewer DVD at a time, but I got plenty around here to watch anyway. It's not much of a hardship.

I have naturally assumed the reason Netflix is doing this is to encourage people to drop all their DVDs and go all-streaming. Judging from their actions the last year or so, I'm sure Netflix now hates DVDs and wants to get rid of them. And when they do totally abolish DVDs, I bet the company will enjoy firing thousands of workers.

Agree completely. This push to go all streaming wouldn't be as bad if they could muster a fraction of the selection. Netflix DVD is awesome (hopefully not about to be "was"), but I'm not so interested in Hulu2.

And unfortunately, I'd already jumped down to 2-discs before this increase, so no savings there.

Bob Lindstrom - July 17, 2011 03:56 PM (GMT)
QUOTE
Agree completely. This push to go all streaming wouldn't be as bad if they could muster a fraction of the selection. Netflix DVD is awesome (hopefully not about to be "was"), but I'm not so interested in Hulu2.


Me too. Prompted by the price increase, I looked at Hulu Plus and found myself underwhelmed. It's already stuff I can get with my cable and TiVo. Even though I may pay more for it there, I find it more convenient.

However, another (blue sky) alternative occurred to me. I'd pay up to $20 a month if Vudu would offer a monthly subscription rate. Excellent 1080p resolution and multichannel sound. It's what video streaming ought to be.

Further, with this price increase, Netflix also needs to stop cutting exclusive distribution deals, such as the backroom bargaining that exclusively gave the Sony PS3 surround sound access and a superior interface. When customers are specifically paying for streaming, Netflix owes them the best possible interface and streaming quality that their access device will allow. (But perhaps they'll roll out improvements between now and Sept.)

By the way, James, I LIKE "latte exchange rate" :)

Bill Picard - September 3, 2011 11:15 PM (GMT)
On the day Netflix's price increase went into effect, the company announced they would not be renewing their contract with Starz, which they'd held since 2008. Besides losing the streaming rights to Starz content like Party Down, Netflix has also lost the streaming rights to Disney and Sony movies, which Starz controls. HBO, which has the streaming rights to new Fox, Universal and WB movies, has always refused to sign with Netflix, so streaming subscribers are down to choosing between MGM, Paramount and Lionsgate releases, all courtesy of the Epix channel, and outfits like Relativity Media.

Upon Friday's news of the non-renewal of their contract, Netflix stock fell 9%, prompting the company to quickly respond with a statement claiming Starz' content was only 4% of their streaming titles (and 8% of streaming hours) and declining and that they'd use the $30 million they'd be saving per year towards other things like improving performance and licensing from elsewhere. (By contrast, they currently pay Epix $200 million a year.)

I suspect most mobians utilize the streaming feature for its rare titles, but my friends with Xbox who like new movies have been generally annoyed by what they perceive (rightly or wrongly) as the decreasing availability of recent titles. Sony movies like The Social Network were pulled two months ago, and one of my friends claims Netflix is turning into Redbox--one or two recent good movies and the rest a lot of filler no one wants to see. In the long run this perception, to which the loss of Starz contributes, may be much more important than the loss of Starz' properties themselves, especially with competitors like amazon building strength in streaming. I don't have streaming anymore, nor do I watch many new movies, but I do find this interesting because which movies get distributed and how has always been a major determinant in how movie culture is shaped moving forward.

John W McKelvey - September 3, 2011 11:21 PM (GMT)
Maybe they'll take this opportunity to revitalize their DVD service and get some more backstock and rare titles?


...Yeah, probably not. But it's nice to hope.

James Cheney - September 3, 2011 11:44 PM (GMT)
Starz dropped out because they figured partnership with Netflix would undermine profitability of their cable franchise, which costs more to access than either Netflix plan and doesn't afford the freedom to pick and choose what content of theirs you watch. Screw them and cable generally! Netflix may seem expensive but it looks good compared to cable with all its tiers and old junk dressed up as premium content stuck behind a paywall -what an extortion racket!

Lenny Moore - September 4, 2011 02:13 AM (GMT)

Lenny Moore - September 15, 2011 06:14 PM (GMT)

James Cheney - September 15, 2011 09:55 PM (GMT)
Here's an interesting and possibly ominous bit:

QUOTE
In July, the company said it expected that it would end the third quarter with 22 million subscribers to the streaming service, 12 million of whom would also opt for the DVD-by-mail service. It expected back then that 3 million would opt only for the DVD service. Now, it's expecting that just 2.2 million will opt only for DVDs, a drop of 800,000.


They never give you enough numbers in these news stories. Did the 12 million streaming-plus-DVD estimate hold, for example. Oh, here's the answer sort of:

QUOTE
It still expects 12 million of those streaming subscribers to also pay for DVD-by-mail, helping it to generate more revenue overall.


What exactly leads them to continue expecting the 12 million while revising downward expectations for the 3 million? Based on cancellations to date or what?

Methodology aside, it appears dvd-s are continuing to fade, and that fewer people than expected are opting for dvd-only. I've been dithering on my decision and remain in the probably large group who still gets both streaming and discs for the simple reason we just haven't gotten around yet to opting out of one, the other, or both. I'm pretty sure that streaming's what I'll stick with along with cable stripped down to basic, and high speed internet. The home entertainment profile's looking rather spartan in this household. I notice I haven't bought a new dvd in over a year and that we watch way more PD stuff over the net than I'd have ever expected to. Book reading via the library is way up as well. How does this snapshot compare to what you all are doing entertainment-wise?

Marc McCloud - September 15, 2011 10:56 PM (GMT)
QUOTE (James Cheney @ Sep 15 2011, 03:55 PM)
How does this snapshot compare to what you all are doing entertainment-wise?

I have seen people returning to my stores that I haven't seen in YEARS. This has been bittersweet for me though. While I appreciate the uptick in business, I'm a little upset that it took Netflix's price increase to make them come back... despite my time spent trying to differentiate ourselves from them. I live in a town that prides themselves in supporting small business, but in the end, it's all about the convenience and money.

Unless I'm mistaken, the physical dvd customers are the money makers for Netflix and the streaming is hitting them for a loss. I'm sure they are biting their nails watching the drama at the Postal Service. What will happen when Saturday deliveries are cut out, postage rates increased or at worst, no mail service at all?

Still, I see this as a small window of opportunity. We are going ahead with Video Store Day on October 15th. Hopefully people will eventually realize our worth in their communities.

Lisa Larkin - September 16, 2011 02:04 AM (GMT)
One of Lenny's links led me to the following obnoxious bit of news:

Fox pulls free shows from Fox.com, Hulu

:angry: I love how they blame the tv providers for their own extortionate actions:

QUOTE
Fox is using its pay wall to encourage viewers to push their local cable provider to reach agreements with the network to give them access to the site. Viewers who subscribe to Dish Network will see this message when they attempt to access full-length episodes: "Frustrated? Join your fellow subscribers and let your TV provider know that you want access to all full episodes on FOX.com. We will send an email when your provider's status changes."

Marc McCloud - September 16, 2011 02:22 AM (GMT)
QUOTE (Lisa Larkin @ Sep 15 2011, 08:04 PM)
One of Lenny's links led me to the following obnoxious bit of news:

Fox pulls free shows from Fox.com, Hulu

:angry: I love how they blame the tv providers for their own extortionate actions:


Didn't Fox create Hulu?

James Cheney - September 16, 2011 06:01 AM (GMT)
I like the possibility of video stores making a comeback as the pay walls spring up and undo the inexpensive convenience. It does seem that the anything you want at a price you can afford allure of the web is fading just a bit lately. Owner-publishers of goodies have shared them pretty freely till now and having hooked us would like to reel us in. Cable TV-like packages with entertainment tiers, etc. may eventually result as the old analog model gets retooled for digital...or so I fantasize.

John W McKelvey - September 16, 2011 01:01 PM (GMT)
Streaming... big price increase, dwindling of supply and reports suggest it's going to get a lot worse with loss of deals. I'm surprised the results aren't worse, although I guess most people aren't as concerned with a a large selection because they don't watch nearly as much as we mobians do. ;)

My movie watching habits (buying DVDs of my faves, renting most of the rest from Netflix - DVDs, not streaming - and the occasional download of something that isn't otherwise available) actually haven't changed at all. I do miss the free Netflix streaming, but it was never a staple.

Marc McCloud - September 16, 2011 05:49 PM (GMT)
QUOTE (John W McKelvey @ Sep 16 2011, 07:01 AM)
Streaming... big price increase, dwindling of supply and reports suggest it's going to get a lot worse with loss of deals. I'm surprised the results aren't worse, although I guess most people aren't as concerned with a a large selection because they don't watch nearly as much as we mobians do. ;)

My movie watching habits (buying DVDs of my faves, renting most of the rest from Netflix - DVDs, not streaming - and the occasional download of something that isn't otherwise available) actually haven't changed at all. I do miss the free Netflix streaming, but it was never a staple.

For millions it is, and what I always see is eventually they burn through what they want to watch fairly quickly. The question is will there be stores around to meet that demand when they want to watch something specific.

Wade Sowers - September 16, 2011 11:01 PM (GMT)
QUOTE (James Cheney @ Sep 15 2011, 03:55 PM)
I'm pretty sure that streaming's what I'll stick with along with cable stripped down to basic, and high speed internet. The home entertainment profile's looking rather spartan in this household. I notice I haven't bought a new dvd in over a year and that we watch way more PD stuff over the net than I'd have ever expected to. Book reading via the library is way up as well. How does this snapshot compare to what you all are doing entertainment-wise?

. . . well, in the words of the old song, we live in two different worlds - we do enjoy high speed internet service, but we get HBO, SHOWTIME, Expanded Basic, all of the HD channels, still buy lots of books at a local store (although we do get some stuff from Amazon now and then), have no library card, never watch any streaming movies, do not belong to Netflix, actually we never did rent DVDs, always bought, now we probably buy more DVDs then ever what with all of the MOD programs finally digging into the studio vaults and bringing out the more interesting, less well known stuff . . . typical compulsive/collector/owner personality, I suppose . . . perhaps one of these days we will evolve into the brave new world, but I suspect the only way they will take our Blus/DVDs/books away is to pry them out of our cold dead fingers . . .

Marc McCloud - September 19, 2011 11:30 AM (GMT)
Ah man... I'm speechless. Actually, I'm not. I had to comment.


http://blog.netflix.com/2011/09/explanatio...ment#f29518d838

William S. Wilson - September 19, 2011 01:16 PM (GMT)
QUOTE (Marc McCloud @ Sep 19 2011, 05:30 AM)
Ah man... I'm speechless.  Actually, I'm not.  I had to comment.


http://blog.netflix.com/2011/09/explanatio...ment#f29518d838

I for one welcome our new Qwikster overlords. Seriously, Qwikster? I loved drinking it as a kid, I guess.

James Cheney - September 19, 2011 02:26 PM (GMT)
You allude to this

So he's sorry. So there's a new company with a funny name. What does this mean for us?

Bill Picard - September 19, 2011 02:42 PM (GMT)
My guess is that this is his unofficial way of putting the mail-delivery part of their business on the market.

Brian Camp - September 19, 2011 03:08 PM (GMT)
QUOTE (Marc McCloud @ Sep 19 2011, 05:30 AM)
Ah man... I'm speechless.  Actually, I'm not.  I had to comment.


http://blog.netflix.com/2011/09/explanatio...ment#f29518d838

Interesting quote from Mr. Hastings:

QUOTE
Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD, plus lots of TV series.


Even he understands how untrue that statement is. If he had said, "nearly every movie being made will be published on DVD..." that might be somewhat less untrue.




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