The Netflix backlash

Netflix Disc

Earlier today Netflix announced it is discontinuing their $9.99 a month membership plan for unlimited streaming and unlimited DVDs, and will begin offering 2 distinct plans. The first plan offers unlimited streaming for $7.99 a month, and the second plan offers unlimited DVDs (one out at-a-time) for $7.99 a month. For those that want to continue using both options, you’ll have to play $15.98 a month, which amounts to a 60% price hike.

As soon as the news was released, a social media protest soon began where users profoundly voiced their displeasure with the new membership plans. Within six hours, more than 9,000 comments were posted to the Netflix Facebook page, and “Dear Netflix” is now an popular trending topic on Twitter.

“Dear Netflix, I apologize for being a loyal customer. My mistake,” said Twitter user Ramses Barden.

“So now I need to pay more to keep getting the same service. What a sucky plan. You do realize many of us will just choose one or the other and you’ll lose revenue on those customers?” asks Facebook user Brock Lee.

However, some customers are able to look past the fact that plan rates are being raised. Twitter user Kyle Prohaska said, “These angry “Dear Netflix” posts are irrational. Be thankful Netflix only costs that much! Think about renting 5 plus years ago.”

It’s understandable that customers would be upset when a services price gets increased; however, it seems most people are simply looking at the 60% figure and immediately begin pouting. If a cable or dish company decided to raise their basic membership rates by 60%, you bet these customers would have something to be upset about, as current rates for basic subscriptions average around $90 a month. But, the reality of this situation is that current subscribers will have to spend an additional $6 per month, or approximately 20 cents per day, to keep both options.

Some customer complain that the Netflix streaming catalog doesn’t have a rich enough library to constitute a $7.99 per month charge. While I respect their opinion, I flat out disagree. If I were to look at my Instant Queue at this very moment, I’d have enough movies and TV shows to keep me entertained for several months.

Netflix on the iPhone

Hulu Plus also offers a streaming iPhone app, but who wants to stream commercials?

Netflix currently has first-run rights to films from Paramount Pictures, MGM, Lions Gate Entertainment, Sony Pictures and Walt Disney Motion Pictures Group. In addition, Netflix hold rights to back-catalog titles to films from Time Warner, Universal Pictures, Paramount Pictures, MGM, Lions Gate Entertainment and 20th Century Fox. Recently, Netflix required rights to stream Miramax films, such as Clerks, Pulp Fiction and From Dusk Till Dawn, and soon will stream the first 91 episodes of the hit series Mad Men.

I rarely rent actual discs, so I’ll drop the DVD plan and save myself $2 a month. However, I would have zero problems paying up to $14.99 for Netflix’s streaming service as it stands today. There are competitors available, such as Hulu Plus and Amazon Instant Video, but when it comes to a bigger bang for my buck, neither competitor even compares to Netflix. Perhaps I’m too loyal, or maybe I understand when it’s necessary for a company to increase rates so they can make the service even better.

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About Jesse Virgil

I'm a late 20's guy who enjoys tech, music, design, movies, video games and bunch of other interesting things.

Posted on July 12, 2011, in Movies, Uncategorized and tagged , , , . Bookmark the permalink. 7 Comments.

  1. I half wonder if this is a ploy to get more people to move to streaming. When it’s a 2 dollar difference it’s not a big deal to keep both the disks and the streaming; when it’s a 7 dollar difference (although it’s STILL not that much), people may be compelled to switch to streaming only.

    My guess is that Netflix would like to be more into the streaming game and less into the shipping / sorting / cataloging of DVDs.

  2. I’ll be dropping the discs. As rarely as I get the discs, I’ll gladly reduce my monthly fee and just rent from the Redbox at the grocery on the rare occasion that I need to.

    Mathematically, it’s genius. If they can reduce the demand on discs by mail, they’ll reduce their costs by millions. Distribution is not cheap, this I know. All the while, increasing the revenue generated by streaming. This allows them to make bigger and better deals for streaming.

    I feel like the trend is moving towards streaming anyways… Netflix, unlike it’s competitors, is embracing the changes it faces (or creates) and being rewarded for it’s adaptability.

    Hopefully, it’s not all a house of cards. I would be heartbroken if the streaming market suddenly collapsed.

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