Tuesday, July 12, 2011

Netflix Subscription Changes

I had already heard that Netflix was going to drop add a DVD-only plan and charge $7.99 a month. Today, though, I found out that Netflix is doing some major restructuring of their subscription plans. Starting September 1, the plan that I currently use (1 DVD out with streaming for $9.99 a month) will end. I can choose between a $7.99 DVD-only plan, a $7.99 streaming only plan, or I can pay $15.98 for my current plan.

Not surprisingly, Netflix has some annoyed customers. The blog entry announcing this change has 5000 comments, mostly from people complaining about what amounts to a 60% price hike, despite the fact that Netflix is presenting it as "offering [their] lowest prices ever." (As a side note, while a lot of people may indeed end up paying less for Netflix now, saying that it's a price drop is just as much of a logic fail as when AT&T and Verizon got rid of unlimited internet packages and offered less data for a lower price. The fact that you're offering a more bare bones option that means that some customers will save money by paying less money for less product doesn't mean that you've actually dropped prices.)

Personally, I don't care. I joined Netflix about five years ago with the 3 DVD out plan and barely used it until streaming came to the Xbox 360. Now I use it pretty much daily and I have a streaming device on every television I own. I still rarely get DVDs. I've had The Godfather since last June and I still haven't watched it. I should have dropped down to streaming when the option came out, but I've essentially been paying $2 a month for a DVD option. I would have probably continued to do this, but I'm not going to pay $8 a month for that option. If I subscribed to a separate DVD plan, I would have to really get some use out of it and I'm obviously not that big on renting DVDs from Netflix. If Netflix has a significant number of customers like me, then this seems like a really stupid decision because they're basically collecting $2 from me because I want the option of DVD rental, but I'm too lazy to actually rent them.

Of course, I'm probably not a typical Netflix customer and the people complaining the loudest about this change and threatening to quit also might not represent the majority of customers. It's entirely possible that a lot of customers don't use streaming and are annoyed that there's a cheap streaming only alternative, but no DVD only plan.

I seldom rent DVDs, so I'll probably try Redbox or Blockbuster (are they going to be around?) or even outright buy the DVD. The only difference is that I'll be paying less per month. That said, it would have been nice if Netflix offered a bundled plan ($13.98, for instance) or grandfathered older subscribers in. Of course, if they plan to use the money they're making to get a better selection of streaming titles, I'll be a happy camper, price hike or no.

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