Let’s all admit it … as customers of Netflix, we have been spoiled.
First, for $8.99 and then later $9.99 a month, we received unlimited streaming (limited to their catalog of offerings obviously) and if we really worked it 6-8 DVD rentals … all delivered to our homes … sweet! How they make any money (and obviously they do) is beyond me. Between my family’s streaming activity and the DVD rentals, my per viewing Netflix cost has to be less than ten cents.
Now if you can agree with me that we have indeed been spoiled by Netflix … then I have another question: ‘What do spoiled kids do when they don’t get their way?’
I guess with the price of milk experiencing a comparable increase of 60% (at least here in Atlanta) over the last six months or so, you are choosing to start having your Captain Crunch and Frosted Flakes with water, kool-aid or tea instead of milk.
And let’s not even talk about gasoline prices … I’ve seen no mass move to alternative forms of transportation that don’t require gasoline … and believe me the price increases at the pump sure do warrant such a move.
Just in case you haven’t heard, that $9.99 a month Netflix fee that includes unlimited streaming and 1 DVD out at a time via mail is about to change to two monthly fees … $7.99 for unlimited streaming (same as Hulu Plus) and then $7.99 for DVD rental for a total of $15.98. Obviously, the choice of what to do falls with you and me as consumers.
A lot of folks are saying, ‘So long Netflix … hello redbox.’ I love redbox and still use it for new releases from time to time … love their online reservation system and the fact you can return to any redbox machine. But $8 a month at redbox gets me eight rentals (barring any special promo code deals they may have going) and don’t forget the late fees when you don’t return by 9pm the following day, the gas costs, wear and tear on the vehicle and my time and energy to leave the house to go pickup the movie and then return the movie. Also don’t forget the occasional line you encounter … behind people who don’t realize you can browse, make your selections and reserve online … oh my, I feel a rant coming on. (Oh yes, and redbox has a very limited DVD/blu-ray offering … but do now offer game rentals).
Or maybe from a streaming perspective you want to check out Amazon.com streaming offering per movie or episode … and that is an alternative for the streaming buff. Yes, there are specials from time to time for 99 cents per but even TV episodes usually start at $1.99 per and movies go up from there. Love Amazon when I’m impatient and just can’t wait but instead of my Netflix … probably not.
We all need to understand a few things.
First, the DVD is on its way out … following its predecessor the VHS tape along with their pals vinyl albums, 8-tracks, cassette tapes and CDs to the grave (or recycle bin). Netflix knows that. As long as that market does exists, the streaming library of Netflix and most everyone else will be limited because the studios make more money on the sale and rental subsidies of a CD than they currently do on streaming. So your refusal to rent DVDs may, in fact, serve to increase the offerings in the streaming library.
Second, the studios were caught off guard by the explosion of the streaming market and the deals they cut with Netflix in the past regarding streaming content were under-priced. Many of those contracts are coming up for renewal in 2012. As the DVD offerings die away and the streaming content demand increases so will the studio’s expectations for compensation. Netflix has to position themselves for that to remain a market leader.
Finally, if they don’t prepare for the inevitable studio contract renegotiation and DVD decline, one or all of the big three (Microsoft, Apple and Google) are just waiting with their overflowing coffers of cash to acquire Netflix or simply take over the streaming market. That may happen anyway … but I don’t want it to happen because Netflix made a bad decision or because I as a consumer making a somewhat irrational decision caused it to happen.
The challenge for us all is not to let the price increase blind us to the service that Netflix has provide us and no doubt will continue to provide us. Their innovations in delivery of video into our homes has eliminated many an agonizing visit to the local Blockbuster store and those repeated walks up and down the aisles … did I say repeated? Their customer service is phenomenal when things don’t go as planned … a rare thing indeed. Who doesn’t get carried away building their DVD and Instant Ques? And how many recommendations have they made based on your viewing history that revealed a movie gem? Perhaps … and of course that’s your decision … they just might be due a bit of customer loyalty.
So it looks like as Netflix consumers we have a decision to make before September 1 … may we all choose wisely.
(Note: We have no network TV, cable TV or satellite TV broadcasting into our home. Our television viewing experience wraps around whatever content we view streaming through our Roku player or whatever we view through our DVD player of owned and rented DVD content.)