The Netflix Debate

[Hatake Kakashi]

Alright, so, for those of you who may not already be subscribers, or simply not in the know, Netflix recently announced a rate hike of 60% over their current pricing plan. (http://www.nytimes.com/2011/07/13/technology/netflix-raises-price-of-dvd-and-online-movies-package.html) This business move has largely been viewed as a blatant cashgrab (http://news.yahoo.com/netflix-raises-rates-irks-subscribers-040622824.html) by a rather substantial (http://mashable.com/2011/07/13/netflix-nbc-revolt/) portion (http://venturebeat.com/2011/07/12/netflix-raises-plan-prices-by-60-with-4100-negative-comments-and-counting/) of their customer base, many of whom are either threatening to cancel, or as I've done myself, already cancelled their subscription.

The backlash from the customer base has prompted several people, including several executives from Netflix, to release straw-man arguments (http://www.huffingtonpost.com/2011/07/28/netflix-despite-the-price_n_912542.html) that state simply that it's still "the best deal around" at "only six dollars more per month." Further, a certain washed-up so-called comic (http://digitallife.today.com/_news/2011/07/29/7197034-please-give-to-the-netflix-relief-fund) decided that now was a perfect moment to make fun of the customers in the whole mess, and maybe toss in a few racist comments while he was at it. Yeah... that sure showed us. We'll be certain to change our minds now.

Now, don't get me wrong. I get it. Six dollars a month is not a terrible amount of money in this day and age. And of course, I see that Netflix is really attempting to encourage everyone to go to streaming-only plans so they can cut their costs... the problem with that is that they do not seem to be able to acquire substantial amounts of streaming rights for a lot of their content, which can only be found on DVD. But, for me, it's the whole principle of the thing. We're currently in the middle of one of the worst financial crunches we've seen in decades, and Netflix decided it was time to give themselves a 60% raise. I don't know about the rest of us on these forums, but I'm fairly certain I won't be seeing a 60% pay increase from anyone anytime soon. Come to think of it, the only kind of overnight (or seemingly so) hikes that even approach that are being found within the oil industry and trading, and in the salaries of politicians.

So let's have a civil discussion about it. Are the customers overreacting in regard to the rate hikes, or should they be more accepting of 60% rate hikes, and if so, where should the line be drawn?

[Professor Smarmiarty]

There is quite a differnece between giving yourself a 60% raise and increasing your prices by 60%. The price they charge you indirectly affects their profits otherwise they could just raise their pries 100,000% and get a 100,000% raise.
Aside from that, they are a company and they are trying to make as much money as possible. They are not providing an essential or public service. If they think price hike will raise their profits I don't see why anyone can really complain. You can always cancel.

[Amake]

Well, you could dictate your own terms of payment. Just cut your subscription down to, let's say, every other month instead of every month. Though you may need to take up piracy to get movies at the same rate as before, it allows you to pay exactly as much as you feel the movies are worth, rather than having the movie industry (or Netflix) take you for as much as they think they can get away with.

Me, I never had any use for Netflix as I prefer to buy movies. Mostly.

[Nique]

No one collectively throws this big of a fit over Comcast, Direct TV or whoever about their constant price hikes. And Netflix is providing a service that a lot of people really really want as opposed to a general blah Cable tv model that's on it's way out anyway.

[Krylo]

No one collectively throws this big of a fit over Comcast, Direct TV or whoever about their constant price hikes. And Netflix is providing a service that a lot of people really really want as opposed to a general blah Cable tv model that's on it's way out anyway.

That's because those companies usually hike 5-10% and then another 5-10% etc. etc. instead of just doing a full sixty in one shot.

It's like that old anecdote about boiling frogs. You put a frog in boiling water and it'll hop right out. Put a frog in cool water, and slowly heat it to boiling over time, however, and the frog will remain in it, always thinking it's 'just a little hotter'.

Same principle. Netflix just dropped a lot of people right into the pot of boiling water and so they are jumping out.

As for whether people have the right to complain: Of course they do. Just like they have the right to cancel.

And lots of people are doing both of those things. Not really seeing where there's a debate to be had here.

Company does unpopular thing -> Company receives complaints and cancellations. Ipso facto meenie moe and other latin words.

[Doc ock rokc]

I had to get a streaming account for one of my English classes a
Last year. Literally they only have about 1000 to 3000 streams and half are documentaries which was the point( and of those I still had to go to block buster/the library to get half of my curriculum) Honestly I have been going to blockbuster I recent years after my brothers near constant compaints about their DVD service.

[EVILNess]

The main reason they are doing this is to 1) combat the rising costs of postage, 2) force people to switch from the DVD mailing plan so they can reap more profit, because as it stands the more you use the dvd mailing service the more it cuts into their profits.

What with them paying 44 cents, assuming the don't get a discount which I don't know for sure, for every dvd they ship out. Not to mention the cost of envelopes, manpower to check returns, and other misc costs.

Theoretically, it is possible for you to exceed the value of a 9.99 subscription just by watching a lot of movies on disc, as opposed to streaming which they only pay for the rights and then all the heavy lifting is done by the ISPs in terms of delivery and overhead.

I personally canceled my netflix because ATT instituted a bandwidth cap of 150 gigs on their internet.

For DVD mailing alternatives you could try Blockbuster's. They let you return them in the stores and then if you want pick out a movie right then.

[Nikose Tyris]

...It's $6 more for the combined package. It's still only $8 a month for streaming only.

And I was under the impression this would assist their licensing costs for new material.

So, this literally affects me not at all. Good to know!

[Fenris]

Philip DeFranco's take on it, which I happen to agree with:

http://www.youtube.com/watch?v=XhecBpd7uOo

1:09 for Netflix.

[Loyal]

In all the history of the world, or at least this year, does any disaster really compare to the tragedy unleashed on millions of innocent Netflix subscribers with the recent news of price hikes and having to make a choice between streaming and DVDs?This is an excellent way to open an article in wake of recent events.

Eight bucks a month doesn't seem all that terrible, really, though I dunno the reliability of Netflix's services.

[Nikose Tyris]

This month they had a short period of wobbly service.

They emailed out a 3% discount code to make up for the service, to anyone regardless of whether they were using their account at the time.

I like Netflix.

[Kerensky287]

I like the idea of Netflix, but the Canadian selection is absolute shit and if they raise prices higher than they are now, I'm jumping ship. There's just not enough there to make it worthwhile.

Also,

I personally canceled my netflix because ATT instituted a bandwidth cap of 150 gigs on their internet.

Holy shit, you cancelled netflix because your bandwidth cap is 150 GIGS?! We're paying like 40 bucks a month for a 60-gig cap, and they still charge something like 4 bucks/gig over that. I honestly don't know how you could use up 150 in a month without downloading something like a game a day. Netflix hasn't really put a dent in our bandwidth usage, that much I know.

[Jagos]

The main reason they are doing this is to 1) combat the rising costs of postage, 2) force people to switch from the DVD mailing plan so they can reap more profit, because as it stands the more you use the dvd mailing service the more it cuts into their profits.



Uhm... This isn't about postage because Netflix gets a special rate. And they don't want people to switch from the DVD plan. It's a streaming vs DVD choice, effectively splitting the customer base down the middle.

There's more here behind the scenes. Did you know how much it costs to license movies to stream is actually more expensive than it does to get a DVD to throw in the mail? It's actually a licensing issue that is causing Netflix to need more money. Hollywood is known for crippling business that compete with their offerings. Nowadays, with just Netflix as the main competitor, Hollywood is going to make their shit more expensive for Netflix to cripple it and make themselves more money.

Philip DeFranco's take on it, which I happen to agree with:

*snicker*

HAHAHAAAA!

Link (http://www.techdirt.com/articles/20110713/03253615077/killing-golden-goose-is-hollywood-to-blame-netflixs-poorly-thought-out-massive-price-hike.shtml)

[Marc v4.0]

I would easily spend 30-50 dollars a month renting movies at a local store, even more if I had to buy the ones no longer carried.

Any decent TV package is going to run you over 35 dollars for the bare bones stuff, that doesn't include any of the movie channels, those are premium purchases a month as well. Want DVR or OnDemand? 10-25 more dollars depending on your provider. Wanna go the regular cable route? Just go ahead and get out the KY now.

This is barely anything to get out of my chair over.

[Nikose Tyris]

Holy shit, you cancelled netflix because your bandwidth cap is 150 GIGS?! We're paying like 40 bucks a month for a 60-gig cap, and they still charge something like 4 bucks/gig over that. I honestly don't know how you could use up 150 in a month without downloading something like a game a day. Netflix hasn't really put a dent in our bandwidth usage, that much I know.

Kerensky, we're in Canada. Third World Countries have better internet then us, at more reasonable pricing figures.

Also, switch to TekSavvy and have unlimited Bandwidth in a service that only gets shaky around 7PM-8PM breifly. :P

Really, fuck usage caps and per gig pricing.

[Fenris]

*snicker*

HAHAHAAAA!

Link (http://www.techdirt.com/articles/20110713/03253615077/killing-golden-goose-is-hollywood-to-blame-netflixs-poorly-thought-out-massive-price-hike.shtml)

Your link literally has nothing to do with what I or Phil said. :/

[Marc v4.0]

*snicker*

HAHAHAAAA!

Link (http://www.techdirt.com/articles/20110713/03253615077/killing-golden-goose-is-hollywood-to-blame-netflixs-poorly-thought-out-massive-price-hike.shtml)

That article is adorable. You can clearly tell by the usage of "Massive price hike" this person either makes enough money that he doesn't give a shit and is evoking imagery because he can, or has yet to pay a real bill as an adult.

How cute.

[Jagos]

If both of you aren't looking at the other articles, explaining how Disney is overpricing its content to Netflix, along with taking movies away from Netflix based on contract disputes, then you're not paying attention to how this affects Netflix service. Phil is mainly rambling. He really believes the price was too low? And it was unsustainable?

Does he go into detail about why the content is more expensive (http://www.techdirt.com/articles/20101206/10223012145/netflixs-move-dvds-to-streaming-shows-massive-value-first-sale-doctrine.shtml)? That's a licensing issue. Same as Hulu (http://articles.latimes.com/2011/apr/12/business/la-fi-ct-hulu-20110412) having corporate masters, that cripple Hulu in order to make broadcast TV more attractive.

In effect, Hollywood is squeezing them dry, (http://www.hollywoodreporter.com/news/hollywood-execs-privately-netflix-71957) and the consumers have to eat that cost difference.

[Menarker]

On a more personal note, I'd feel that they don't deserve the right to increase their prices until they improve their quality of service.

In particular is their shameful policy toward subtitles for the support of the deaf and the hard of hearing which their bottom line is "screw you, you're not our target demographic". (For those not in the know, subtitles are not available at all even if the DVDs of the movies have them.)

Basically, they should at least improve how their business runs before they even think of justifying such a hike.

Also, I second an earlier comment about their Canadian selection being pretty worthless.

[Nique]

For those not in the know, subtitles are not available at all even if the DVDs of the movies have them

This is false. While it's true that not all streaming movies have them available, some of them do. I imagine Netflix is working to add this feature to all titles.

[Menarker]

Their website pretty much stated otherwise when I looked pretty damn hard when I had a membership in the past (Around last christmas). Ragequitted in disgust after.

[Marc v4.0]

There has been a very clear and noticable "Subtitles" button on the player bar on about 60% of the movies and TV shows I have watched recently.

It might depend on the film itself, how readily available subtitles are. Don't really know.

[EVILNess]

Uhm... This isn't about postage because Netflix gets a special rate. And they don't want people to switch from the DVD plan. It's a streaming vs DVD choice, effectively splitting the customer base down the middle.


But it is about postage, to a degree. Because of them viewing their streaming capabilities as "good enough" they no longer see postage as a fixed cost. They see it as a cost that needs to get the fuck out.

It costs Netflix about a dollar for every disk they mail out (And 5 cents for every video streamed.) with them sending out in excess of 2 million DVDs a day, that "special rate" adds up. (To over 700 million.) So congratulations, if you get 10 DVDs in the mail, you just exceeded the cost of your membership.

Now, granted the main reason that they want people to ditch the DVDs is because of the rising licensing fees.

[Magus]

Netflix always screwed people around by delaying DVDs if you took out too many, though, as a cost-cutting measure. Really to me their 3-DVD a month plan for around 17 dollars was pretty much exactly how much I would have paid to just rent them at a nearby store, or sometimes more (depended on if they would all be new releases), and it always took forever to get the damn things anyway. Obviously this was somewhat offset by the convenience of getting them in the mail, but basically it's not really a money-saving deal the way they "throttle" their customers.

I cancelled my Netflix account a while ago, so this doesn't effect me. Personally if I still had one, though, and I didn't have one of the most horrific bandwidth caps in America (Hughes Net), I'd probably just go with the streaming account, since most of the movies I remember renting were older movies, anyway.

It is true that the satellite and cable companies are just as bad, really. I recently got an ad from Dish Network, and on their basic package (which now costs 40 dollars instead of 32 or whatever like it used to, and before that it was 28, etc.) it literally had only 12 channels I would watch, and literally 17 that were actually "real" channels, and at least a third of the channels listed were just those shitty shop-at-home channels they put on there to get the number up to "America's Top 60" or whatever, basically just total shit, plus public access channels one would get anyway with just the damn receiver. Oh, and get this: their list for the Top 120 had two of the channels re-listed despite it being redundant (as it said "also includes all of Top 60 channels!"), just to make it look bigger. And to get channels I personally consider just straight up "basic" channels (AMC, FX, etc.), you have to get their most expensive package.

Personally, for Dish Network? I never upgraded from their 15 dollar "Welcome Package", because it quite literally has the same quality selection as their 25-dollar-for-one-year-and-then-it's-40-dollars plan, arguably better for me (since it has AMC, Comedy Central, History, Bloomberg, MSNBC, TBS, HUB, Boomerang, etc., like several channels that I'd otherwise have to pay 70 dollars for. It's kind of annoying to not get TNT or USA or Spike but I'd trade all three for AMC, really. And thus I have).

Basically, until cable companies and satellite companies start allowing you to get "al a carte" packages where you pick your 60 channels, they will still be shittier than Netflix + Hulu + Crackle + whatever.

Is a price hike annoying? Well, yeah. They probably should have made it hurt less by raising the price more slowly like the cable companies. But they're not any worse than Comcast or Dish Network or DirectTV or Verizon FiOs, whatever you have, you should also dump, technically.

[Jagos]

Damn, I was wrong...

Netflix wants to shift everything to streaming (http://www.niemanlab.org/2011/07/the-newsonomics-of-netflix-and-the-digital-shift/)

So yes, the profit margins on the DVDs was probably hitting them, so they're looking to go all digital.

[Nikose Tyris]

Actually Videotron had an A la carte deal where you just picked your channels when I had them in Montreal. That was pretty sweet.

[Karrrrrrrrrrrresche]

Can't really say that I blame them. Especially since they've seen first hand what can happen to a formerly successful business model that fails to keep up with the times properly.
I mean, when you beat down Blockbuster because their business model didn't change quickly enough it probably gives you a good perspective on how to avoid becoming like them.

[Jagos]

There's still business in DVDs... It's just really really small and niche.

[rpgdemon]

I'd be ecstatic if Netflix moved to only digital, or if they had it so that all options were licensed for digital distribution. It's my preferred method of viewing, and I'm always unhappy to have to wait when there's a dvd only movie.

[Fifthfiend]

Netflix dvd + streaming is pretty much worth the 16 dollars a month to me still, I would say.

I feel like a lot of people cancelling are gonna end up going hmmmmmm oh hey that's right Netflix owns, and then resubscribing.

[Magus]

Actually Videotron had an A la carte deal where you just picked your channels when I had them in Montreal. That was pretty sweet.

Man, if I spoke Quebecois that'd be like the best place to live.

[Nikose Tyris]

Man, if I spoke Quebecois that'd be like the best place to live.

I don't know any moonspeak yet I got along fine there, except on the public transit.