Netflix Changing Plans

[taysteewonderbunny]

As mentioned in From the Business Desk

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month

Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month

Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don't need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

You can easily change or cancel your unlimited streaming plan, unlimited DVD plan, or both, by going to the Plan Change page in Your Account.

We realize you have many choices for home entertainment, and we thank you for your business. As always, if you have questions, please feel free to call us at 1-888-357-1516.

–The Netflix Team

In view of Raev's information that the costs associated with streaming are likely to skyrocket in the next few years, do you think this is a wise move? If you have Netflix, what are you going to do?

I, personally, am going to drop the DVD by mail option. We use the streaming more anyway. I think if Netflix is trying to get MORE money from their customers, they just blew it. I was paying $2 more a month for a feature I didn't hardly use. Seriously, I get one DVD by mail every 90 days on average. Now, I'm more likely to use Redbox or my public library. It's easier than waiting three days for the next disc.

A better move would have been to have increased my charge incrementally. It's not that I CAN'T pay $16 per month. Rather, it's that their marketing makes it seem that I'm losing value here. So, now they have a disgruntled customer who will pay them less for what she is already getting. BAD MOVE. Honestly, it's like the frog in boiling water thing and I probably would have agreed to $16 dollars per month if the fee went up in $2 increments over 18 months instead. They need a new marketing department.

Secondly, if what the CNN Money article that Raev quoted is true, then I think the studios are making a big mistake.

[Damn it! How can I get the code to stop including all the following text on the same line? That's annoying.]

Back to what I was saying: if licensed streaming costs are going to go up that much for the providers (ten times? really?) in the next year or two, those costs are definitely going to have to be reflected in the cost to the consumer which will, in turn, increase the impetus for the average consumer to pirate those films.

What do you think?

Edited July 13, 2011 by taysteewonderbunny

[deadcoldgothgirl]

In Tennessee they made it illegal to do any file sharing including using netflix. So if anyone but you uses your netflix password they can go to jail and get fined. Netflix Sharing can make you go to Jail Most of the people that signed this were in support for it even though they didn't know any of the fine print. They literally said if it stops file sharing they are for it. This is a brief over view. There are more web sites with more information.

[Simon Bar Sinister]

as one might imagine, the initial public feedback has not been positive:

http://technolog.msnbc.msn.com/_news/2011/07/12/7069809-thousands-threaten-to-quit-netflix?gt1=43001

[TitsMcGee]

Well what about the shows that they have half on instant stream and half on dvd? That's just stupid.

[TitsMcGee]

And I can tell you that Hulu Plus isn't all that great either, you pay for commercials..

[n0Mad]

I'm not happy with this decision, but I do want to give Netflix the benefit of the doubt. I don't know all the backstory behind this decision such as profit margins, licensing fees, costs, etc., but I do know enough about business to know that this decision probably did not come lightly for Netflix. They probably had a team discussing options for a long time before they came up with this plan. So, I support Netflix in their doing what they feel is best for the business. However, I do not like the way they handled things. As TWB mentioned, they definitely need a better PR rep and they should have handled things in stages so the consumer can more easily handle the transition. I bet if you gave me a couple free days to think it over, I could come up with a plan where the end result would be the same, yet I'd have you feeling okay about it instead of sour. Then again, PR and creative marketing strategies are my specialty. Hmm ... maybe I should apply at Netflix.

[~Tszura~]

It definitely feels like a move to just squeeze more money out of the consumer, rather than something they had to do to stay within their margins.

The e-mail Nightgaunt received made it sound like they were doing us a favor by charging us more. I absolutely hate when companies do that! It's like smacking someone around a little (that doesn't want it), and charging them ten bucks for the "pleasure" of being knocked around.

We definitely would have appreciated more time, along with some honesty as to why they are doing it.

[Destroit]

Looks like Redbox and Family Video are getting back a lot of business.

Netflix's streaming option confuses me. As many of us know, Trailer Park Boys is a show superior to most other similar comedy shows and we had a friend over at the house last week whom I wanted to show a few episodes, but Netflix changed out the whole series and so it isn't there anymore. I know WHY they do it, but it sucks. For something you're paying monthly for, they should at least keep shows up for more than two months before taking them down.

And don't get me started about their DVD-by-mail stuff. Timata is a Netflix subscriber and he watches a bunch of anime. They just sort of randomly send him stuff, like he'll get the first disc for the series...and then even though the second disc is the next in his queue, they'll send him something like the third disc.

I personally think this is going to kill their sales because in this economy, you would have to be either super lazy, so obese you can't drive to the store, or disabled to spend THAT much money for something you're going to get cheaper at Family Video and/or Redbox.

[pleasurekatzen]

And I can tell you that Hulu Plus isn't all that great either, you pay for commercials..

Agreed. I haven't had cable in about 4 years, and I don't miss it at all. Seemed like a colossal waste of money for how little I watched it and the absolute rubbish programming. My netflix unlimited streaming plan suits me just fine because it's convenient. I thought the same thing could be said for Hulu Plus, but it didn't even last a month. Again, with the crap programming AND i still have to sit through commercials? Seems a bit ridiculous, no? Out of all the friends who did try the Hulu Plus service, not one ended up keeping it.

[Epic_Fail_Guy]

I+canceled+my+subscription+with+netflix+for+the+same+reason+I+don't+have+cable,+what+they+provide+isn't+worth+the+price+they+ask.+I+mainly+used+streaming+and+rarely+used+their+delivery.+For+ten+bucks,+it+was+worth+it.+IMO,+their+live+stream+is+worth+5+bucks+a+month+at+most.+If+the+stream+quality+and+content+provided+better+shows+and+movies+than+most+the+shit+they+have+that+isn't+worth+watching,+I+would+have+stayed+a+customer.+For+how+often+i+ordered+a+dvd,+i+can+just+rent+from+a+video+store.++I'm+not+happy+over+this+but+Its+easier+knowing+i+dont+need+their+services.

[~Tszura~]

Saw this on the Yahoo feed.....Ha!

http://finance.yahoo.com/news/Why-Netflix-Raised-Its-nytimes-3842223211.html?x=0

I agree with the reporter.

[n0Mad]

Saw this on the Yahoo feed.....Ha!

http://finance.yahoo.com/news/Why-Netflix-Raised-Its-nytimes-3842223211.html?x=0

I agree with the reporter.

I agree with a lot of what the reporter is saying, yet I can also understand what the Netflix rep is saying. He's just saying it very poorly which reinforces TWB and my points that they need a better PR person. Perhaps they should have done something like this:

***************

We understand that some of our customers want DVDs only and do not want to take advantage of our streaming service. We also understand that some of our customers want streaming only and do not want delivery of our vast collection of DVDs. Many of our customers, however, wish to take advantage of both of these services. In order to better meet our customers' needs, we have decided to separate our services into a la carte bundles.

1 DVD/month - $7.99

2 DVDs/month - $13.99

3 DVDs/month - $17.99

Streaming only - $7.99/month

Or, bundle streaming with any DVD package for half off - only $3.99 extra!

1 DVD/month + streaming - $11.98

2 DVDs/month + streaming - $17.98

3 DVDs/month + streaming - $21.98

We understand that these new a la carte options do create a slight price increase for our customers. For example, 1 DVD + streaming has increased from $9.99/month to $11.98/month. Without our bundling discount though, that same package would be $15.98! So, for less than two dollars, you are saving more than twice as much!

***************

There. That's something I whipped together in less than 15 minutes. Give me more time to play with the wording and it'll sound great. If Netflix wanted to increase things even more then they can wait a while and do it incrementally. Any strategy is better than hitting us all at once.

[~Tszura~]

Awesome rewrite Spook!

[Troy Spiral (13)]

Having been an early adopter of Netflix (long before they had streaming), I actually used to suggest Netflix to people here on DGN regularly. Looking at the pricing, it seemed pretty much exactly what I remember for the DVD-by-Mail (or close to it) I stopped many years ago just due to not being able to afford any real recurring "entertainment" costs being in well, the situation I'm in.

Took me some digging to understand what the anger was about. I guess from an evolution-of-pricing standpoint, somewhere along the line the streaming portion was thrown in "for free/dirt cheap" and people got used to it, now that there is a HUGE demand for streaming, the price goes up.

I'm all for keeping prices down, just from the perspective that there is now a very large demand for bandwidth via streaming how could they maintain the "for free" (or dirt cheap) pricing forever? Also there is inflation, which makes prices go up regardless.

[Simon Bar Sinister]

2 million subscribers leaving?

http://technolog.msnbc.msn.com/_news/2011/07/25/7160773-report-2-million-subscribers-will-cancel-netflix?gt1=43001

[LittleMissLuckyCunt (1)]

I had Netflix.. Just canceled it this month, I seen pretty much everything I wanted to see on it, plus BlockBuster has a thing now where movies are only 1$ a day (even new ones)

[Rayne]

Having tons of options now with Xfinity On Demand and HBO Go... I really can't see paying for Netflix. That being said, I do have it, I just don't pay the bill.

It is really nice now that I can stream it on my DS. Trying to prop the iPad up in bed to watch something was dang near impossible.

[amalthea23]

Initially I was bummed about this, but really, the disks have become more of a pain in the ass than they're worth. I stream to my laptop, phone, apple tv and ipad, I don't really need to carry disks around. If they'd add more titles to streaming, I wouldn't ever make a peep.

[amalthea23]

Having tons of options now with Xfinity On Demand and HBO Go...

Man, I wish cablevision would let us use HBO Go, it's insane that we can't with the price I pay for cable.

[Troy Spiral (13)]

Initially I was bummed about this, but really, the disks have become more of a pain in the ass than they're worth. I stream to my laptop, phone, apple tv and ipad, I don't really need to carry disks around. If they'd add more titles to streaming, I wouldn't ever make a peep.

Man, I wish cablevision would let us use HBO Go, it's insane that we can't with the price I pay for cable.

I'm stuck with the DVDs (well actually i use a USB flash drive that plugs right into my DVD player) just because the TV is the only comfortable place I can watch things on, for "good" movies I need a better screen, and for longer stuff sitting at my computer = ugh. Not that I use netflix. I get my stuff via torrents for "free"... which no one should ever use becasue its bad! What I meant to say is I KNOW people that do that.

[Tyger]

That is why I like to download. No money, no commercials and it only takes a bit to get it.

[Lacilliyr]

In Tennessee they made it illegal to do any file sharing including using netflix. So if anyone but you uses your netflix password they can go to jail and get fined. Netflix Sharing can make you go to Jail Most of the people that signed this were in support for it even though they didn't know any of the fine print. They literally said if it stops file sharing they are for it. This is a brief over view. There are more web sites with more information.

Id certainly be in jail for a myriad of file sharing charges.

On topic, my biggest qualm about netflix is they limited time things are on instant queue. It irks me that they do this. They took all my CC Presents episodes off. It made me a sad Lace.

Concerning their new rates, I personally have the 2 DVD + Streaming bundle. I'm young and have no sense of money.

I'm very fiscally irresponsible.

I shouldn't have money.

I will never allow myself into another strip club evar.

Least with money or access to said money.

[Simon Bar Sinister]

update: http://money.msn.com/mutual-fund/article.aspx?post=b8bf80ab-5a05-45e8-8e75-778203d5f505&GT1=33016

[Troy Spiral (13)]

Id certainly be in jail for a myriad of file sharing charges.

On topic, my biggest qualm about netflix is they limited time things are on instant queue. It irks me that they do this. They took all my CC Presents episodes off. It made me a sad Lace.

Concerning their new rates, I personally have the 2 DVD + Streaming bundle. I'm young and have no sense of money.

I'm very fiscally irresponsible.

I shouldn't have money.

I will never allow myself into another strip club evar.

Least with money or access to said money.

hah. Didn't see that when you first posted it.

update: http://money.msn.com/mutual-fund/article.aspx?post=b8bf80ab-5a05-45e8-8e75-778203d5f505&GT1=33016

Interesting article. The point(s) it ends up making by the end is quite different than the impression one might get by just skimming it.

[Shaun]

Netflix Blog

Dear Shaun,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

Received this in my E-Mail today. Guess we know the real reason they split the plans now. I am most likely gonna cancel one or the other now. Probably the streaming since I mostly watch DVDs still. Having to log into separate websites to rate every thing twice and remove shit from one queue because I watched it on the other is just gonna annoy me.

Edited September 19, 2011 by Shaun