Netflix Cashes In

A few years ago my daughter bought me a Netflix subscription for Father's Day. I kept the subscription and have enjoyed getting DVDs in the mail and occasionally view streaming videos - I watched the latest Star Trek video there a few weeks ago.

Yesterday Jessie Becker, Netflix's vice president of marketing, announced that rates are going up again at that juggernaut of all things video. They are splitting their DVD and streaming services and each will cost you $7.99 per month - a total of $15.98 if you have both plans. I read a few of the over one thousand (and counting) comment reactions on Mr Baker's blog post and found this one to be interesting:
Yes, be a good service long enough to run Mom and Pop video stores (and even Blockbuster) into bankruptcy, then once things are looking up, the gloves are off and aimed at the customers.
I had not thought about that aspect of this announcement. I have to admit that the end result here seems to agree with that comment. I know that I have not used my Blockbuster account since I joined Netflix. I guess I am wondering if the new rates have been in the mind of Netflix strategists all along or if they have simply found themselves in a place where they can cash in big time. As for me, I doubt that I will keep the streaming services but I may stay with the DVDs as we generally watch a DVD or two a week.

Do you have a Netflix account? How will you react to this announcement?

13 comments:

  1. I'm undecided. I've been a Netflix fan for several years now. It started off as a cheap service and it's still excellent. I want the DVDs as the selection on streaming is limited and the quality is not as good as Blu-Ray. I rarely stream a movie. But, we are finding ourselves streaming old television programs that we missed like Eli Stone and Drop Dead Diva.

    This coupled with cable companies talking about charging us per gigabyte is going to change the economic dynamics of streaming content. The $7.99 a month Netflix is charging might pale in comparison to data charges from your cable company if you switch from watching broadcast programming to streaming programming.

    A couple of years ago, they jacked up the price to their Blu-Ray customers and I did nothing. This time I'll probably drop my commitment back from 3 discs at a time to 2 discs at a time.

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  2. I just changed my plan to (2) discs at a time instead of three. It drops my price $1.00 a month from what I am paying now.

    Take that Netflix! ;-)

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  3. Just checked and the comments at the NF blog is at 5,000. I suspect that they reached the limit and Blogger shut the comments off.

    A lot of irate folks out there.

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  4. For me, the price has almost doubled since I started with Netflix. The additional fee for Blu-Ray irritated me because they did the same thing they did with streaming. It was free at first. Then, they added a fee. Now I really don't believe it costs them that much more to provide Blu-Ray movies as opposed to standard def movies. I did up my number of discs from 2 at a time to 3 at a time. But, as I said, I just dropped it back down. With streaming costing $7.99 now I will look at alternatives like Hulu which I hadn't thought of looking at before.

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  5. We had a streaming account and gave it up. They didn't offer enough choices.

    The quote you gave--That seems to me to be a common strategy in many industries. Lower the prices to run the locally-run competition out, then raise the prices however much you want.

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  6. @Brian - Might also want to look at www.Boxee.tv also for streaming alternatives to your computer. I also hear that Roku is an option.

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  7. This is from my blog yesterday.
    I love the idea of getting rid of physical DVD's. I think they are as relevant as a CD is today. Unfortunately, Netflix's race to eliminate physical inventory is outpacing the speed with which they add new content to their streaming library. In fact, I have seen very little progress in adding content that has come out in the last 2 to 5 years, and their content for 5-20 years is not much better. I believe that this may be the move that busts Netflix's current hold on movie content. People will look to get their physical media from other sources and stream from yet another. It becomes more easy for the consumer to look at movies that way since the current giant is pricing it such. This misstep can only be undone by an even bigger announce of some sort of new studio offerings online

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  8. I agree with what jrchaard said. I know, for me, I was with Netflix for years and never even considered another alternative, ignoring RedBox, Amazon streaming, Hulu, etc. as Netflix was satisfying all my needs at a reasonable price. But, within the last 48 hours I've been looking at Amazon Prime, Hulu and re-thinking RedBox. If Netflix had just continued the gradual progression to streaming (which is the way of the future), they would have done quite well. But, this is a giant overreaching too soon trying to force people to a technology that is not ready for prime time.

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  9. I agree Brian. NF went too far too soon. Their streaming services just do not have content that warrants the inflated price tag.

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  10. My DVD player has several streaming options- which I've ignored up until this point. Apple TV also offers a couple of alternatives, I think. I'm going to look into Amazon Prime. The $75 a year wasn't worth it just to get expedited shipping for me. But, what I didn't realize is it also includes streaming TV shows and movies.

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  11. I will be cutting back to streaming only. And if they raise THOSE prices, I will be cutting back to No Netflix At All only.

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  12. Bad news for Netflix:

    "Starz Entertainment has ended contract renewal negotiations with Netflix. When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform."

    I have already cancelled my streaming option. Glad I did.

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