Wednesday, July 13, 2011

Not trying to be whiny, but some thoughts on the Netflix price increase.

All last night I kept seeing mentions about the Netflix price increase for Streaming plus DVD service. I won't say "I told you so," mainly because I didn't tell you so, but I think it was obvious.

Prior to this week, Netflix provided streaming and mail-order DVD rentals for roughly $10US. Frankly, I don't know how they handled the shipping. I seriously thought they were owned by the US Post Office, a belief I have not considered looking into. I can only imagine what their streaming costs them. Even if they have their own server farm, they are looking at high ISP rates. If their servers are owned by a third party, well they are getting charged a ton.

The increase is natural on two points. First, they were building a user base. You have to spend money to make money. They have enough customers now that they are literally driving video store chains out of business. Second, now that they are the best option for DVD rentals, they can turn up the heat. "You want what we don't stream? Pay me." Sure, there are still those DVD vending machines, but I can only assume they have a limited selection. Certainly my local Red Box does not have a copy of  Girl Slaves of Morgan Le Fay. Why would they?

The question for me, now, is how will they proceed? Will new movies still be primarily available through DVD, or will they expand their Instant selection? If they don't, why would I go to them for new DVDs? The Red Box and their ilk are perfectly fine for that, and I'd be lucky to get seven DVDs a month for the extra $7US which I could spend with Red Box for the same number.

Frankly, the only people getting hurt here are people with odd tastes, like me, and people without high speed internet access. Yes, there are people without broadband in this country. It is actually the majority. Now, I make a good living, and if I have to buy Chained Heat 2, then I guess I will. Also, the hurt to those without broadband will not be so great. A DVD only plan's cost does not change significantly from last week, and if you were not watching on Instant, then you won't miss it. Of course expansion of Instant movies will likely start replacing the availability of DVDs, and I can foresee DVD rentals becoming a thing of the past for Netflix. Good for me, bad for those without broadband.

The worst part about the whole thing is not related to the price change; not directly at least. Now the content wars are starting. Hulu+ is Netflix's main competitor, and recently made a streaming deal with Criterion. Criterion's catalog will start disappearing from Netflix, and if they are your cup of tea, you will have to go to Hulu. Say goodbye to another $15US. Eventually more distributors will follow suit. It will be the Coke and Pepsi of the internet.

Bottom line: this is a "white people problem." Yeah, I don't want to pay any more to Netflix, but I am just going to spend that $5-$7 on some other meaningless crap. If I don't like it, I'll drop Netflix. Maybe I'll do something productive, or read another book a month? When (according to the article cited above) an estimated 40% of the US population still has dial-up internet access, and another 30% have no in-home internet, it seems a tad petty to bitch about $7 a month. Privilege is not free. It wouldn't be privilege if it was.


Rick Bman said...

In the long run, the new price is still a pretty damn good deal.

I do wish they would offer the unlimited streaming plan with a limited DVD rental plan. I mostly use streaming but like having the option of getting a DVD and being able to only get 2 a month would be enough for me.

Darius Whiteplume said...

I concur on both. Remember paying $3 for a DVD at Blockbuster or Hollywood Video? That is just three rentals a month to match the Netflix price, and I tend to get a movie every three days. I would even consider paying, say, a buck for a single DVD rental if I chose the title, and chose when I wanted it.

dave said...

I couldn't use Netflix, I never find the time to watch movies.

Wings1295 said...

Like your post and the two comments here. Right now, I plan on dropping the DVD option, mainly because we have DVDs here my kids choose, and they sit around for a week before anyone watches them. Really not worth it, in my opinion. Maybe in the future when it is just me and my wife, we would create a higher turnover rate that would justify paying extra for the DVDs, but by then they may be history.

Anyway, will be just streaming, for us. If we miss it enough, we can always add it back in. Not going to freak out about it, at all.

Darius Whiteplume said...

@Dave - I have a movie sickness. Wait for this Thursday's Short Movie Reviews. I might need an intervention.

@CJ - If it were not for the stuff I really want to see that are DVD only, I would drop the DVD option in a moment. I try to get them out the next day. I likely would not miss it though.

Rick Bman said...

When I first got my Netflix account my turnaround time for DVDs was like 3 days so I was really getting my money's worth. Life has just gotten busy so I no longer have the time to see as many movies as I used to.

I will probably end up dropping my plan all together unfortunately. My fiancee has a streaming only plan and we live together so there is really no point in both of us having it anymore. I spent years rating all those movies on there though, so it is going to be hard to let it go.

Darius Whiteplume said...

That sucks. You can create other streaming profiles on accounts with their own queues. I wonder if they would consider binding your old to the new? You never know. A little good press might help them out these days.

The Kid In The Front Row said...

I loved this post, very fascinating, until the white privilege guilt at the end, haha!

Don't be ashamed of your privilege, it's not something you've DONE, you just are who you are and your problems are your problems. It's something to worry about when you're oppressing others with that privilege, but not when blogging about DVDs.

Darius Whiteplume said...

;-) I just meant that this is nothing to get up in arms about. The 30% of us who can even use Netflix Instant take the internet for granted. I have four computers in my house; granted one I built myself years ago and one is old, but I don't have to go to the library to check my email. I just used "white people problem" as that is a term going around for bitching about shit that doesn't matter just to have something to bitch about. Maybe should have gone with "First World problem" instead, but lets face it, white people make up a huge chunk of that 30% with broadband and we do complain a lot. If Tea Party members had to go to bed hungry or walk to work once in a while they wouldn't be complaining about taxes. :-D

Wings1295 said...

I agree with you, Darius. A couple of my relatives always complain about having to do the laundry, and I just laugh and say NO. The machines do the work, you put it in, move it once, fold it. Picture how it was 50 or more years ago, or even how it still is in other countries today. It is nothing to complain about it, at all.

But, I can see Kid's meaning, too. We know what we are used to, and some people have a hard time seeing past it.

I just always know how bad things can get, so I appreciate how good they are. Might be annoying to some people, but oh well. I have learned to give up worrying about what others think. Usually, they aren't thinking anything and when they are, what the hell does it matter in the end?

My little comment grew. Sorry to run on!

T. Roger Thomas said...

The only thing that was keeping the price down prior to this, was the threat of Blockbuster gaining market share. Now that Blockbuster has filed for bankruptcy, Netflix is free to charge a price that is more reflective of the costs of producing quality films and distributing them.

I was a customer of and on in the past. If I were to start a new subscription, I would just go with the streaming option.

Darius Whiteplume said...
This comment has been removed by the author.
Darius Whiteplume said...

@CJ - NP :-)

@TRT - I have a feeling that is the way they want us to go.

Lockwood said...

Darius Whiteplume said...

@Lockwood - That's pretty good.

Post a Comment