One of my favorite companies is under siege this week as their new pricing structure took effect yesterday. Many are expecting a wave of cancelled memberships in the coming days, but I for one will remain loyal. The fact is that Netflix’s only mistake was spoiling us too much. First, let’s look at some of the new prices:
Unlimited Streaming: $7.99 per month
3 DVDs at a time per month: $15.99
3 DVDs+Streaming: $23.99
Right now, the Orbson family only has streaming. Our price increase? ZERO. We used to have 3 DVDs (at a time) and paid about $16.99 per month. Then, Netflix offered a new service absolutely free. Instant Streaming. That’s right; a business created a new and innovative product and gave it away for free. Over the years, Netflix has only raised the cost of their service by a couple of dollars. In the meantime, it costs me $12 to see a movie in the theater.
Clearly, online streaming is the future of entertainment. As Netflix’s contracts with the big studios began to expire, the studios have decided to demand much, much more money. We are not talking about millions of dollars we are talking about billions of dollars. Netflix cannot be expected to maintain and grow the current level of available streaming without raising prices. They simply cannot make that work. For those of you who do not watch streaming TV and movies, your price for 3 DVDs actually went down! For the rest of us, it’s time we start paying for that “free” service.
Yesterday, negotiations between Netflix and Starz broke down. Netflix’s stock took a major hit (down 8% after hours) It appears as though that relationship will come to an end. While I was not in the room, I can guarantee that the problem was that Starz wanted more money than Netflix was willing or able to spend. I’m glad they didn’t reach a deal. I had a free 6-month cable subscription to Starz. They show the same five movies over and over again. Kudos to Netflix for not caving in to their demands. However, they do need to pony up the big bucks to pay Sony and maybe even someday HBO in order to have quality streaming content. Those big bucks must come from us.
So, why should we pay more? The reason is that every other option costs ways too much. You may not remember Blockbuster, but I do. $4.95 rental fees for one movie! When we received DVDs we averaged at least 3 per week. That is 12 per month or almost $60 if we went to the video store. Cable and satellite? Well, they can cost $40 a month for just basic cable. $23.99 for everything Netflix offers is not a bad price. It may even be too low.
I really like Netflix. Whenever I receive DVDs they are almost always free of scratches, play perfectly and arrive one day after they are mailed out. The streaming is good quality and instantaneous. While I hate to have to pay more money for any service, I’ll gladly fork over a few bucks for a service I use and love.
Yo Asshole Said What?! – Michele Bachmann would not have a problem with drilling for oil in the Everglades. Seriously, when Satan himself steps up and says “whoa, too far” you know you have one evil Teabagger.
Oh Come On! – The White House released a statement saying that next Thursday’s Presidential address will not interfere with the NFL’s season opener. Come on, I love football but isn’t our nation’s stability is far more important than one football game.