Should be noted here that Netflix has LOWERED the net price for both services when you get 4 at a time out or more. This is aimed at those who game the system by only getting 1 or 2 out at a tine and then watching streaming movies heavily. Those who were gaing their system are going to scream their heads off, but as a current 7-at- a time member, I’m a bit happy over the savings per month.

John-

A fair and important point to be sure, however I don’t know that I would label those who will feel the increase as people who were “gaming” the system, especially since it was an option Netflix designed, offered and actually promoted. Of course I have no data on this, but I wonder what % of members fall into “your” category (of 7-at-a-time) vs. those whose rates will now increase.

~Christopher

Personally I have no problems with this and kinda expected it. I just coincidentally changed my plan to streaming only a couple of months ago.

I do hope netflix increases their streaming library and puts more content in hd. I’ve saved well over $800 a year by using netflix and OTA HDTV vs. having cable. I have a whole bunch of DVDs that I haven’t put in the dvd player for some time. I suspect that I’m not alone.

Marco-

That appears to be the rallying cry of the protesters- add more instant play! I personally would be willing to pay a premium to get everything on-demand, and I believe eventually we will see that. It’s just a question of when. Movie studios are still making a killing off of the dying industry of tangible media.

Thanks for the comment!

~Christopher

Niot everyone who only got ot 1 or 2 at a time gamed the system, either. I’m kinda speaking about those who abused the system. Yes, Netflix promoted their streaming capability – their core business was still DVD rentals, though. That core became threatened as more and more reduced their plans for DVD rentals, and increased their streaming use, forcing Netflix to spend cash to increase their streaming capabilities with new hardware. That costs money – and Netflix wasn’t recouping all their expenses from DVD rentals alone due to those who only got 1 DVD a week (say – myown turnaround with the local distribution center is 3-4 days) – and spent the night watching streams.

TL;DR – the costs of offering streaming were not being offset by the lower-end packages – so in effect the rate got raised on the lower-end ones, with a alternative offered at roughly the same price for those who were only streaming. It actually works, if you think about it – and avoid knee-jerk headlines like the one this article has.

John,

With all due respect, I’m still not quite certain by what you mean when you say “abused the system”. Can you give an example? I have no doubts that Netflix’s model was no longer the ideal and they needed to adapt, but given the public response, I dare say it may not have been the wisest, regardless of the fiscal logic it may have made when they crunched the numbers. It’s (for better or worse), a fairly proven fact that you can’t expect a public to pay more for something when it is unclear what the benefit of the added expense will be. I personally believe the public would be okay with a price increase if it was clear to them what the payoff would be on their end. Netflix, thus far, has not shown that, if it even exists.

As for the sensationalism of my headline, I must stand by it. It is, to be blunt, a fact. We can certainly debate the issue if there are other ways of dissecting the story, but in the end, mathematically, for many subscribers who wish to keep their current status, the percentage monetary increase is accurate. Is it uniform for everyone? No, but I make clear in my article this point.

I appreciate your feedback very much and I do think you make some very astute points.

~Christopher

Has the quality of the streaming titles improved since 2009? I was on the 2 or 3 at a time plan with a 2 day turnaround, but the prospect of streaming was really why I joined, and its selection of titles the reason I left. Most of the titles I wanted to see were only available in disc form, so while novel, unless I wanted to watch something that was relatively old, I had to wait for a physical copy. Hence my confusion that they’re now charging full fare for the service.

I use the streaming service currently, but it seems that you cannot find any recent movies that have come out on DVD or BluRay on the streaming service. The Starz contract expires in 2012, and other companies are going to get into the media streaming business, which is going to affect Netflix. I hope they can figure out what to do to keep their customers satisfied.

Okay, let’s break down what I’m saying:

(The exact percentages here are made-upm BTW, Netflix doesn’t release statistics on their subscribers and what plans they use, so I’m just making a example).

Netflix costs before they introduced streaming were very simple to break down. They only consisted of salaries, purchases of mass quantities of DvDs, and warehouse/storage facilities. Pretty simple – and the smaller percentages of people making use of the more-DVDs-out-at-a-time plans were easily covering the costs os those who had the 3-at-a-time or less plans. Especially in that those costs basically amounted to packaging/mailing costs only, companies being what they are.

Then, Netflix added streaming. Streaming movies takes quite a few seedboxes, new software to allow for connedtion to those seedboxes (the Netflix Player on computers, and equivalents developed for consoles, portables (3ds Player), and set-top boxes. That doesn’t come cheap – not to mention that the higher load that you put on a seedbox, the more it will need maintenance. Those extra costs were not being covered fully by the less-than-3 plans (remember, earlier the less-than-3 plans were covered by the ones that had 4-or-more, snce costs were minimal. They’ve now increased, so Netflix had to find a way to cover the new costs of seedboxes and datacenters – which are considerably MORE expensive than simple storage/shiipping centers.

Where the abuse comes in is people who wanted the best of both worlds – and where the headline’s a little misleading. There were people (I, personally, kow a few) who had the 1-or-2 plans, and streamed almost exclusively. The DVD was a bit of a waste for them – they only needed DVDs for things that weren’t streamed – and for them, Netflix has actually kept things the SAME. Pay the same fee, and either have all streaming OR 1 at a time. Or keep both and pay for both. That’s what people are really screaming about – not so much the fee, but that they “can’t have their cake (streaming) and eat it too (DVDs) ” in effect. Netflix also implemented, with their DVD rental rates, a sliding scale that hits relative equality with the 4-at-a-time plans, and winds up with minor savings on the higher DVD plans.

Sure, as PR this thing wasn’t handled very well – it’s also kinda hard to tell someomebody that what they’ve enjoyed for years is no longer going to be the way it was – and I’m not sure really how they could have handled this better.

You are just incorrect in calling the use of a paid service abuse. That’s like saying someone who pays for an unlimited cell phone plan who talks 20,000 minutes a month is abusing the system. They pay it, they can use it however they like. It was advertised and sold as unlimited, it isn’t like people are paying for part of the service and using more than their share. It was necessary to have a low price to establish their foothold. Now they can raise prices since people are now probably willing to pay more. They could have raised prices a little more gradually as expenses increased. But I think most people will be willing to pay the increase given that $10 a month was pretty darn low to begin with.