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Wednesday, July 13th, 2011So people who not so long ago were willing to pay $5 to rent a single movie on a low-quality VHS tape are now howling mad because if they’d like to continue to stream hi-def movies anywhere, at any time, they’ll have to pay an additional $6/month on top of the $10/month they’re now paying for unlimited hi-def DVD rentals.
This seems appropriate:
Part of the problem is that the content industries are trying to strangle Netflix by demanding crazy rates for their content, now that Netflix has gotten huge.
Yeah, that’s a point that I think is getting lost in all of this.
I agree it is all pretty awesome.
But I am now looking seriously at Amazon Prime, which I hadn’t really considered until Netflix made the price change.
I am an Amazon Prime member and a Netflix Member and the Netflix streaming service is better. I will keep the DVD & streaming service from Netflix even though the price is going up. Very few recent films are available for streaming, but Netflix has a great selection of streaming TV shows available, and unlimited streaming plus any number of DVDs a month for $22.99 still seems like a heck of a deal to me, since it keeps me from having to screw with DVD rental kiosks or video stores. Hopefully, they can use the increased streaming revenue to expand the movie catalog and I can drop disc service altogether.
Why do you lump everyone together and assume they were willing to “pay $5 to rent a single movie on a low-quality VHS” ? I wasn’t. I know a lot of people who weren’t.
Netflix used to be great value. Now it’s not, so a lot of people (including me) are disappointed, and I cancelled my subscription yesterday. The streaming selection was pretty awful – it was pretty much impossible to find anything watchable, though occasitionalluy
/Jay
oops .. occasionally there’d be a decent TV-show.
I live in Canada, where all we get is the 7.99 unlimited streaming. The options for the mail delivery DVD type of service are really pricey up here, so after moving in 2005 I missed Netflix so much, even though I was paying about the same price for 3 or so dvds a month. This is blissful. I personally don’t care about recent releases (that’s what theaters are for, and when I can buy dvds for under $10 for something I’ll watch a couple of times and loan out) and I love the huge selection of stuff to watch that gets bigger every time I log on. And Canada’s selection is way worse than in the states. So I’m grateful for what I get.
I do have to wonder how much of this is about getting the rights for things – a few people have suggested it’s to get better numbers for who is using the streaming so as not to scare off Sony and others. Or maybe to use as a bargaining tool.
Well, at least you don’t have Canadian content laws!!! Which aren’t so terrible if it’s US programing with a percentage of Canadian, but when you have movies from all over the darn world, there just isn’t enough stuff from Canada, period.
My hope is that this is part of a diabolic plan on Netflix’s part to start strangling the media companies in return. I know a lot of people are complaining, but my perception is that most of them will cancel dvd and keep streaming. This will not only result in less demand for dvds, which they buy from the media companies, but reinforce the the reality that the studios need to stop sitting on the good stuff. I’m still willing to pay more for streaming if the studios will cough up a greater percentage, or all, of the premium content. I think Netflix knows this and and created this scenario as a “oh you don’t think we have the stones set fire to the entire dvd marketplace” bit of brilliant game theory.
My mind will be further blown when we find out that Netflix has slowly been staging a covert hostile takeover of Redbox (I mean, they’re already red for pete’s sake). Fast forward 5 years and you get all your streaming at home, via Netflix, and you get your hot and fresh new releases and blue rays and games you want to play for a day or two max from Netbox. Everybody goes to the grocery store, and it’s just a buck or two. No more postage. Everything in its right place.
I fully agree that Netflix is fantastic and that it is a value at $15 per month. And I fully agree that the freak out by some is overblown. And I love that Louis CK clip and often find myself marveling at the efficiency and cheapness of modern technology.
But with all that said, I am still annoyed at the Netflix increase. An alternative way of looking at it is that a service that cost $10 on Monday suddenly cost $16 on Tuesday, with no increase in quality or quantity. And Netflix announced it by sending an e-mail that essentially said “we did you a favor and split up these offerings into $8 and $8, so if you only want half as much service you can save money ($2 per month).” That’s a disingenuous message.
I would have found it more respectable if they just came at it directly and said “our service has become so popular that costs for postage, processing, bandwidth, and digital rights have gone up substantially. As a result, to stay competitive and offer the best selection in an increasingly tight market we need to raise our prices. We still think that $15 for all of this is a good value.” To act like it is somehow a positive move is what annoyed me.
To act like it is somehow a positive move is what annoyed me.
That’s a fair point. And the fact that so many people are pissed off even though it’s still a great deal means Netflix handled it poorly.
But I do think it’s still worth reminding people that it’s still a pretty great value. And kind of amazing, when you consider how fast we’ve gotten here.
“And kind of amazing, when you consider how fast we’ve gotten here.”
And all made possible by the internet, which wouldn’t have ever been created without government involvement. Such an ironic thing coming from a libertarian.
It’s only a great value if you watch the shit out of movies. If not you end up paying $15 to watch one or two movies.
I’m a happy Netflix customer. When I got the email, my general response was “meh, had to happen sometime.” I’m still paying $20/month for as many movies as I can bear to watch. Considering that I watch a couple a week, that’s a screamin’ deal.
As for all the people bitching? They’re all free to cancel their accounts. I wonder how many of them will…
“It’s only a great value if you watch the shit out of movies. If not you end up paying $15 to watch one or two movies.”
That on it’s own is still a great value, not even to take into account that it is 15$ to watch two movies whenever I want without any of the associated hassle of planning or driving somewhere.
It beams into my frikking home. When I was a kid I had to cajol my parents to drive me, or ride my bike in Houston weather, to a store to look for an hour, through badly sorted movies. They were generally out of anything good, and I had to pay the equivalent of eight dollars for one crappy movie on a crappy VHS tape. Quit your bitching:)
Netflix Instant is not HD, or “Hi Def,” it is 480p, or DVD-quality.
@EH That’s not true. It depends on the limitations of the device you are using to watch the streaming video (e.g., a wii is limited to 480p no matter what), but Netflix is capable of streaming 1080p (if network conditions allow).
According to my calculations my monthly price won’t go up by more than a cup of coffee a month. I think I can manage.
This is still a great deal and like AMB I knew it was coming eventually. They have raised their prices maybe twice since I joined back in 04. It was bound to happen. At at $16 a month I am paying about a tenth of what I paid 10 years ago when I had premium cable and two video rental memberships. (You had to have two because the big chains never had independent movies and the independent stores only had 2-3 copies of the hits) Add to that I don’t need to leave my house, pay late fees, wait for some asscrack to come to my house to turn on/service the cable, pay a deposit, or continue to pay even when the service goes down. (And as someone who is currently in a precarious employment situation, I love the fact I can put my membership on hold with no penalty. Let’s see the cable companies do THAT without charging a fee.)
And Juice. If you only watch one or two movies a month, there will still be low turnover plan you can get for $5 a month.
And did I mention I can stream Netflix through my iPhone into the exercise machines at the gym. Jeebus that’s awesome. It ain’t a jet pack of a flying car, but it’s a start.
And all made possible by the internet, which wouldn’t have ever been created without government involvement. Such an ironic thing coming from a libertarian.
C+ trolling.
I have no problem conceding that DoD research laid the early foundation for the Internet. Given that it has unlimited power and virtually unlimited resources, I’d hope the federal government would occasionally do something useful.
But you oversell your point just a wee bit with the Internet “wouldn’t have ever been created” without government involvement. I mean, unless you have access to the infinite alternate universes in which DoD never funded ARPANET, and can report back to us that, in every instance, civil society was unable to produce anything resembling today’s Internet.
So here’s how it works:
I have 2.5T of external RAIDed storage. I stay on the mail plan for 2 months until i fill up my storage with BD images. Then i switch to streaming only until i finish watching what’s on storage.
Been a Netflix customer since 2003. I just have to remember to cancel my streaming now while i am on mailers.
People should stop whining. I bet it’s the same ones that still have cable like in the 90s.
Louis C.K. also has a great bit on White People Problems here: http://www.maniacworld.com/we-have-white-people-problems.html
Given that networked devices go back to the telegraph, it’s not really difficult to believe that the internet as we know it would have been invented anyway, absent ARPA involvement. People look at the internet and think it sprung from nothing and only the government could have done it. Google George Stibitz to see primitive networking 18 years before ARPA was formed (and 32 years before it changed its name to DARPA). People understood the value of networked computing and were working toward it. The fact that DARPA gets the credit doesn’t really mean anything.
Eh.
Same product, much higher price. Seems like a no-brainer that people would be pissed off.
Part of the problem is that the movies and shows available on streaming are severely limited making streaming only pretty unviable.
Another problem is that this announcement came just after a whole bunch of shows and movies that i had queued up for streaming got removed a few days ago – limiting the selection of what I’m interested in even more.
A.) It was $8.99 before.
B.) That means with the new “8 and 8″ price plan, it’s a 78% increase in the price. I mean, I get it. I know the economy sucks and the prices of things have to go up, and the media companies are festering syphilitic elephant cock biting whores, but a 78% jump all at once is a huge bloody increase. Yes, it’s better than $5 per VHS tape rental, but the point is we’re used to prices for tech things dropping, ultimately, and so an increase is going to net complaints, and a near doubling in price is going to net you a WTF?
That Louis C.K. clip was funny.
As far as netflix goes, I’m fine with the new prices. I think I will actually save a dollar or two. All I ever use it for is streaming… The same dvd has been sitting in the envelope for a week now. I keep forgetting to return it and downgrade my membership.
Radley? People don’t value virtual stuff in the same way they do physical stuff. Especially for subscriptions.
I’m currently applying to do a PhD studying just that, actually…
Some years ago the Wall Street Journal raised their prices and explained the reason was that costs had gone up. Fortune Magazine then took them to task for ignoring one of their basic principles of capitalism: firms raise their prices because they can and only if the market will bear it. Customers don’t care a thing about costs.
I don’t care about Netflix’s costs. If they provide good value I’ll buy their service; if not, I won’t. Whether they can make a profit at the current prices (or whether they are maximizing profit at present prices) is their problem, not mine.
I’ve been a member since the first of the year when I got the 1-DVD+streaming plan as a Christmas gift. Netflix’s records show I’ve gotten some 30 or so DVDs, Only 16 were movies I had not seen before; the balance were movies I wanted to see again. I returned 6 unwatched.
I’ve watched a lot of streaming programs. Most were originally TV shows, BBC mostly but a few were PBS. I don’t think any were US network shows.
My current DVD queue has two movies I haven’t seen before (including the Adjustment Bureau which won’t be available for another week). My instant queue has 15-20 shows, but most of them have been on the list for a couple of months so I’m not all that hot on most of them. I’ve watched maybe 15 instant movies I hadn’t seen before and perhaps that many reruns.
Eventually I’ll work my way through the rest of the Top Gear episodes and then there won’t be much of anything worth spending money for on watch-it-now.
A friend told me last week that Netflix had the old James Burke “Connections” programs. This excited me since I loved those shows. I checked tonight, and they are on DVD only (15 DVDs so I guess one episode per DVD). I’ll have to decide if it’s worth watching one episode every five days to the exclusion of all other DVD movies.
I don’t know what I’ll do when this gift runs out.
Sorry, Radley, but you lost me with this one. A service I currently pay for is going to cost 60% more in a couple months. I don’t think it should cost 60% more. I’ll bitch about it. Others won’t. In a few months, Netflix will check out their bottom line and determine whether or not it’s a good call. Isn’t that how capitalism works? So long as nobody’s asking Congress to investigate Netflix for price-gouging, I don’t see why you’d have a problem with it.
Right now, there are two unwatched netflix discs on my entertainment center. They’ve just been sitting there for the past three weeks, because I’m somewhat of a lazy movie watcher. With the current pricing structure, it’s not that big of a deal how long they sit there; contrary to what others have stated, there’s a HUGE selection of streaming titles. I could very easily blow an evening just trying to decide what to watch.
But with this price increase, it no longer makes sense to have those discs sitting there, or possibly even coming at all. I was already seriously contemplating going from the two-at-a-time plan to just the one. Now with the price increase, it might just make more sense to go with the streaming only plan.
I’m not complaining. Netflix can charge whatever they want, and people can decide that maybe they can spend their money a little more wisely.
Personally I like the idea of a streaming service but found the lack of recent movies annoying. So the price seemed about right to me. Now if they they added say all of even the year before lasts movies, I’d gladly pay the 60% increase. But I wouldn’t pay for that in advance.
For me the $5 at blockbuster was about equivalant value. I only watch 1-3 movies a month anyway.
I think the people above make a lot of good points, but what really gets me is that there is now no discount for bundling. I mean, that’s just weird, and like someone noted, Netflix is actually billing this as a “convenience.” Which makes no sense at all. Streaming-only is not really viable considering how many things are still not available via streaming, but streaming is my main method of watching and the DVD plan is not worth the same amount to me per month. Maybe they had to up the price, maybe they even had to up the price substantially, but by making them equal and giving me no discount for bundling it’s hard for me not to drop the DVD part of the plan entirely, even though that too would leave me less than satisfied.
We just signed up for streaming only a couple weeks ago. The price for that isn’t changing for us and we’re not interested in discs. The last time we had Netflix discs, we kept the same ones for a year.
As for no bundling, I would imagine that the content ‘owners’ aren’t giving them any sort of bundling discount going forward (even if they should), and Netflix has decided to discontinue a loss leader program. It always seemed to me that the Streaming got added on to the 1 disc program for almost no cost at all. So now they’re changing that. I don’t know if there’s any way to announce it that wouldn’t make people upset.
It’s probably true that life in a modern US prison is, in most ways, better than life on a 19th Century slave plantation. It doesn’t follow that US prison conditions aren’t worth complaining about. You can always find or imagine some worse condition than what someone is objecting to; so what?
Isn’t it like $6 or $8 a month for ONE DVD? (More if you want Blu-Ray.)
You can pay about that by just using Red Box.
Anyway, it doesn’t matter if it’s good, bad, or indifferent. As long as the government’s not involved, the market will decide. I think the issue here is that Netflix WANTS everyone to cancel the mail-in service, which is what people can’t understand.
Today’s internet derives largely from the Commercial Internet Exchanges (CIX) which displaced DARPAnet. If it hadn’t been for the CIX, the Internet would be a college/military toy cost many times more than it costs now.
jcalton – Except, bluntly, their streaming service is badly sub-standard, including but not only in their catalogue.
Yeah, back in the day we had to pay $5.00 to rent a VHS movie. And it was 20 below zero and windy and uphill 2 miles to school both ways. These young whippersnappers don’t know how good they have it these days.
The problem is that for all that Netflix pioneered their entire market, after this price increase they’re not actually providing a particularly competitive service. Their streaming is all over the place quality-wise, and has a catalogue that’s both small and constantly, unpredictably shifting. Their mail-delivery selection is comprehensive but now it’s also significantly more expensive than their main competitor in that arena (Redbox), even if you watch a decent number of movies every month.
I just don’t watch enough DVD mailer movies to make it worth it. I like the streaming part of Netflix and will continue to use this part of the service. However, I’m of the mind set that the streaming portion of Netflix, can’t be as expensive as the mailer portion, so I’m with some of the others, if they would have split the difference for bundling I would’ve been happier. It seems to me that they are betting that more people will keep both services and not go one way or the other like I just did.
Jerry, I think you touch on a point that is a misconception. “The streaming portion of Netflix can’t be as expensive as the mailer portion.” Why not? This isn’t a case like buying a CD vs downloading the songs (where either everyone has a disc or doesn’t). Essentially, because the disc gets passed back and forth, the cost of the disc is minimized, and the cost of the mailer portion is instead in the warehousing, labor, and mailing. Those things are pretty cheap now also.
And the mail is pretty much the limit on how many interactions Netflix has to have with you. I have a buddy who can generally turn around Netflix discs in a day, so for one of his disc slots, he can get a throughput of 6-7 discs a month.
But with streaming, the storage and bandwidth is cheap, certainly, but because of the sheer volume that people can watch, the content licensing becomes a far larger part of the cost. Say in that same month you watch one thing on streaming every other day. You’ve now viewed twice the content that’s even possible by the disc service, and that only goes up the more you use it. The cost of licensing that content now becomes far more important, because they have to license it for many more views, and they have to budget much more of that monthly fee for licensing.
If they’re pricing each service based on what they believe the costs of providing the service are, then they’re probably agnostic about what people do. They just want customers.
#38 Ron,
You left out that we had to rewind the goddamn things! Kids today and their fancy 0′s and 1′s.
Highway, my bitch with streaming vs discs and pricing is, quite simply, that they don’t provide the same selection. I’d pay *more* per month than $16 if I could stream the entire catalogue even with the consistently dicked up audio sync issues, not being able to get HD because they won’t let you preload a movie, and plenty of other interface items that are mostly just nagging pains that don’t matter terribly much. The primary problem is the selection and always has been. I was ready to cancel Netflix when they expanded their selection and it suddenly became a useful service to me…with the current increase in price to access the entire catalogue I’m going to streaming only, then ditching the whole thing once I’ve watched what I’ve got saved in my instant queue. It’s a cost-benefit analysis that Netflix has put itself on the negative side of and it’s going to kill them if they don’t figure out another way to package/present it.
I was paying ~10$ for unlimited streaming and 1 DVD out. A great deal since I use the streaming a lot and the DVDs about 6 times a year. I am/was annoyed when I found out it would be ~ 16$ starting in September. And for the exact same product with maybe even less choices due to content contracts running out.
So, I looked around for alternatives to get my DVDs and streaming and realized that while there’s some interesting free and paid supplements to my diet (Hulu, Crunchyroll, Amazon, iTunes) Netflix still carries the most wide, eclectic, and interesting selection of both streaming and DVDs. Essentially, they make much of the content I want to watch easily available; I’m not aiming to see the latest releases.
I’ll stick with them but I’m still annoyed. At 1) Netflix for how they announced the price increase and defended it through corp speak justifications; but more importantly at 2) some of the content producers.
These guys blindly just don’t seem to get it. If the alternative is free don’t make the paid experience worse. Sony is a good example of content producers thinking they can squeeze the lemon rinds and get another gallon of juice. Piracy is still alive and healthy but they seem to arrogantly discount it, only because so many of us have chosen (key word here, CHOICE) to use the paid services. Sony thinks squeezing Netflix and the like will maximize their profits. But in the end it can only impact their bottom line.
I sure can’t imagine the major networks playing nice with Netflix, when they’re in direct competition with their own joint venture in Hulu.
I don’t see the market fragmentation really ending. Netflix will continue to be the Long Tail of rental, Amazon the long tail of retail, and Hulu will probably use its prime position to keep all the current TV shows to itself (of which there is less and less quality to watch).
I cancelled the mail-in service awhile ago. I like the streaming serivce and use it mostly for TV shows, especially the HBO and Showtime series. If I want a DVD and it is not offered on the streaming service, I will use Redbox. I think this is a move for Netflix to move more towards mainly being a streaming service.
I understand that people are not happy they raised their prices. So if you are, cancel your service and stop whining. There are plenty of other options available. I do agree that could have handled it better.
I have Amazon Prime. It means I get free 2-day shipping on Amazon purchases. What does that have to do with dvd/movies? Someone please enlighten me.
While I agree with the premise of the post, I have never paid more than $2 to rent a movie, especially not a VHS. I guess I could assume we are adjusting for inflation here, but I don’t want to just make that assumption. I am 32. I have never really rented movies as an adult ( I had a short-lived Blockbuster membership when I was 18 but barely used it). When I was a kid we had local video stores that all charged $1-2 a night per movie. Each place had a $1 night, and some had deals like if you rented a movie on Saturday you could keep it until Monday.
As an adult with children, I also have less time to watch movies. I just watched a netflix dvd last night that had arrived on July 5th. Since i didn’t get to the post office today, it might go out on Monday. I might get my next dvd on Weds. Even with great turnaround times, I probably can manage 2-3 dvds per month, 4-5 if I have absolutely nothing else to do but watch a DVD the day it arrives and mail it back the next day. I have the 9.99 plan now. I haven’t made my decision, but it looks like I will go streaming-only or suck it up and pay 6 bucks more for a couple DVDs a month.
This year Amazon added video streaming as a benefit of Prime membership. They should have sent you an email about this.
If people don’t like it, cancel. How hard is that? This is just more entitlement. Give someone a deal and suddenly they think they’ve earned it. Fuck that.
It is pretty impressive that people simultaneously lament the poor quality of the streaming and insist that they are frustrated over having to give up the DVD service.
If you think Netflix sucks and isn’t worth it, cancel and move on. Why complain about a service you don’t like being too expensive? Sounds like the solution is simple.
BSK – I’m seeing most of the annoyance over HOW they’re doing it, presenting it as some kind of advance.
And it’s hardly a free market, given the refusal to licence many services, and the major limitations on the catalogue of those they do, etc.
Leon-
Well, if I understand it correctly, it is an advance in that they are decoupling the streaming and DVDs, an option previously not allowed. If a user only used one of the services but was ultimately paying for both because they were lumped in together, they might save money. Additionally, I would venture to guess that this might allow them to get a better handle of what their customers prefer, which might allow them to adjust their approach (if tons of people opt out of DVDs in favor of streaming-only, they may more aggressively push for better streaming content and move towards providing all content in solely this manner).
How is it hardly a free market? Free market doesn’t mean “I get whatever I want”. Groups that own the licenses are under no obligation to release them. Netflix is under no obligation to increase their catalogue. It makes great business sense to offer different content via the different delivery systems; for Netflix, they would prefer to have people sign up for both. What isn’t free market about their approach?
I love Louis C. K., but he’s a comedian and his job is to make jokes about our condition; humor doesn’t need to explain it and often obfuscates it (which is fine in so far as it goes). As an explanation, I really like how Ran Prieur responds to his point:
49,
Thanks. I wasn’t aware of that. Turns out my Prime shipping is free, so I don’t get that service. Which is fine, since I don’t pay anything.
I just freeloaded a Netflix trial period yesterday and holy frak the video quality sucks donkey balls. I consider myself worse off for watching Iron Man 2 in “HD” quality because now I’m going to have to watch the Blu-ray to enjoy the visuals but I will miss out on the pleasure of surprise while the fireworks are going off. And the selection sucks too.
Why can’t I just own rights to files floating in the Cloud and pay a license fee to the authors and a fee to the interwebs delivery companies?
As someone a “bit” older than Louis CK, I remember when I first got cable in 1970 and had more than 3 channels (ABC, CBS, NBC) for the first time. VHS is what? 1981? In 2011 I expect streaming, at .01 a movie, much less $6.00 a month?!? I don’t watch THAT many movies! And I don’t feel responsible for what anyone else abuses? Watch your system!
Like someone said, that many would cancel DVD and keep streaming…That’s exactly what we did. We prefer to look up something on the fly. Like many people, we like things on an immediate basis, not a per mail basis. Good luck with the DVD portion, media companies. Why should we bother? The streaming quality we get is very good, and occasionally only drops if our Comcast connection does. So if your streaming sucks, it’s your internet for the most part. I do also agree though that the selection seems to be worse now. I’d rather drive to the local movie store to rent something on the off chance that I might want to rent a DVD once every couple of months (how we were using the DVD portion) than pay monthly for that service from Netflix.