Netflix raises prices by 60%.

The price hike is too much. Adding $6 per month is adding $72 per year. I think that people are going to change to the DVD by mail only plan because of the selection you have - unless you use Netflix primarily for TV shows. That $72 pays for Xbox Live twice over, it pays for an Amazon Prime membership (which gets you into Amazon's 6000 title streaming library AND free 2 day shipping on everything sold by Amazon), or it could pay for a a few months of TV or internet, or a month of cell phone service. It's as if Verizon said at the end of the year "oh yeah guys, we're gonna just bill you twice for December, but don't worry, we won't do it if you take either texting or calling off your plan for the next whole year."

I think it's a really bad move by Netflix, and they're going to lose a bunch of customers over it. There's also something about me that just hates everything turning into streaming...it's takes away something physical from watching films, but I'm not sure what it is. It still feels so much better to me to have the DVD and put it in the player. Popcorn and surround sound feel so much better. I think maybe it's that streaming is too much like watching TV? Can't be sure. But it's not the same.
 
I guess it just depends on what people want the most. For the average user, that $6 should be easy to find somewhere in their budget. If they don't want Netflix nobody said they had to use it. If there's better options they're more than willing to give those a try (and so am I), but I like Netflix and it works well with my AppleTV.

I too prefer physical discs, but Netflix Streaming has been great for the days when watching a movie wasn't expected and we want to watch something.
 
The outcry over the price increase is a little irrational, to say the least. I actually tip my hat to Netflix for having kept their costs so low for so long. If you have been keeping up with the evolution of their business, everybody realizes that Netflix's popularity took a lot of the Hollywood studios by surprise and Netflix was able to negotiate some very nice sweetheart deals with them, especially with the streamed content. As long as these sweetheart deals continued, Netflix did not raise their prices just to benefit their bottom line. NOW, the studios have woke up to the power, and opportunity of streamed content and THEY are forcing Netflix to pay much, much higher prices for access to their content. I have seen the price increase coming for a while now, and, to be honest, I am shocked at how modest the changes are. Even with that, I believe that Hollywood will continue to push for higher and higher prices, and expect the cost of streamed content to continue to grow. While you will rarely hear me stand up for a multi-billion dollar corporation, I do think that Netflix, as it exists today, is pretty well aware of which side their bread is buttered, and will try to contain the inevitable rise in costs, as it impacts their subscribers, the best they can. If that does not turn out to be the case, well... then all bets are off. However, so far so good.
 
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I got the email today and bumped my subscription down to 1 DVD at a time + streaming.
Thumbs up if you're so busy you always have the red envelopes sitting unopened on your kitchen counter for like 2 weeks.

I'll be straight-up honest: all I really watch on Netflix these days are the streaming "le naughty" softcore French films. tres bon! :grin::grin::grin::grin::grin::grin::grin:
 
Thanks David, glad to see somebody who agrees with me or at least understands. I'm getting blown up on Twitter right now LOL.
 
It's not a lack of understanding. We (filmmakers) are looking at Netflix in a totally different way than your typical consumer. It's all in the valuation of content. A few years ago, before Netflix was big and Blockbuster was still around, people had no issues paying 4 dollars to rent a DVD for a few nights. I happily did it all the time. We didn't really complain about the price of movies. Then the piracy wave hit and hit hard. Content could be found for free. No longer did you have to spend 4 dollars to watch a DVD. To counter, Hollywood jacked up prices at the theaters, added DRM, and things like Hulu and Netflix launched. Netflix was an indie company. Hulu was a conglomerate operation.

Netflix made content cheap. And with streaming they made it cheaper. Those who didn't know (or want to) torrent had an option. Hulu made things free. The inherent value of content was reduced to a dollar or so per film. People are used to the service for cheap. With a 60% increase, people no longer think the price is indicative of the inherent value of the content. Thus the dissent. It's a valuation question. One that Netflix caused just by being netflix.

So it's not people being irrational. It's a service increasing it's fees on content that has been conditioned to not be worth that much money. Maybe they'll retrain people. Who knows. I cancelled netflix a long time ago since I wasn't using it enough. Too many unopened red envelopes.
 
David G. Smith said:
The outcry over the price increase is a little irrational, to say the least. I actually tip my hat to Netflix for having kept their costs so low for so long. If you have been keeping up with the evolution of their business, everybody realizes that Netflix's popularity took a lot of the Hollywood studios by surprise and Netflix was able to negotiate some very nice sweetheart deals with them, especially with the streamed content. As long as these sweetheart deals continued, Netflix did not raise their prices just to benefit their bottom line. NOW, the studios have woke up to the power, and opportunity of streamed content and THEY are forcing Netflix to pay much, much higher prices for access to their content. I have seen the price increase coming for a while now, and, to be honest, I am shocked at how modest the changes are. Even with that, I believe that Hollywood will continue to push for higher and higher prices, and expect the cost of streamed content to continue to grow. While you will rarely hear me stand up for a multi-billion dollar corporation, I do think that Netflix, as it exists today, is pretty well aware of which side their bread is buttered, and will try to contain the inevitable rise in costs, as it impacts their subscribers, the best they can. If that does not turn out to be the case, well... then all bets are off. However, so far so good.
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"Modest changes" made me laugh. Say the rate hike averages $3 per person. At 22.8mil subscribers, that's $800mil/year, which is double what Netflix spent on licensing rights for streaming content last year. I get your point, but I don't think raising the most common plan by 60% is exactly a modest change. I guess it's now or never, though. People got pissed when they had to pay an extra buck, why not make them pay an extra two or six.

I'm sorry, but blaming studios for wanting to make money on what THEY created vs. what Netflix simply rents and licenses... it seems "a little irrational, to say the least." The only benefit Netflix has given viewers is the same benefit that Amazon gave readers - temporarily cheap prices at a loss to the company in order to build a market, and then price increases that everyone gets pissy about.

I don't really care what Netflix does. I know that they need to make money, and I think this was a necessary increase in order for them to continue doing so. I just also think they're stupid to do so without offering a "plus." You need to give people a reason to stay with you at the same time that you announce you're charging more. If Netflix announced that they'd licensed streaming rights to every film released before 1975, then I don't think people would be as pissed. There would be a reason for them to jack your prices and it would seem like an honest thing to do - at this point, only people who understand the industry like all (most) of us here really get the politics behind the price hike.
 
netflix needs to move to a streaming only model to cut shipping and handling costs. but they don't have the money to pay the studios for this. very few of the popular movies are available for streaming.

cable companies hate losing tv subscribers to netflix and are chomping at the bit to get rid of a competitor that eats up so much bandwidth.

it's only a matter of time before it all comes crashing down. :(
 
Mattykins said:
It's not a lack of understanding. We (filmmakers) are looking at Netflix in a totally different way than your typical consumer. It's all in the valuation of content. A few years ago, before Netflix was big and Blockbuster was still around, people had no issues paying 4 dollars to rent a DVD for a few nights. I happily did it all the time. We didn't really complain about the price of movies. Then the piracy wave hit and hit hard. Content could be found for free. No longer did you have to spend 4 dollars to watch a DVD. To counter, Hollywood jacked up prices at the theaters, added DRM, and things like Hulu and Netflix launched. Netflix was an indie company. Hulu was a conglomerate operation.

Netflix made content cheap. And with streaming they made it cheaper. Those who didn't know (or want to) torrent had an option. Hulu made things free. The inherent value of content was reduced to a dollar or so per film. People are used to the service for cheap. With a 60% increase, people no longer think the price is indicative of the inherent value of the content. Thus the dissent. It's a valuation question. One that Netflix caused just by being netflix.

So it's not people being irrational. It's a service increasing it's fees on content that has been conditioned to not be worth that much money. Maybe they'll retrain people. Who knows. I cancelled netflix a long time ago since I wasn't using it enough. Too many unopened red envelopes.
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DAMN, that's a good post.:beer:
 
BTW, David, I didn't mean that you are/were irrational, but I do think that blaming studios for this is silly, since Netflix is the one that picked a fight with studios, not vice-versa. You don't expect studios to want to let everyone watch anything they want for $8/month, but that's what Netflix claims it wants to do and thus asserting themselves as the heroic middle-man, they've got a lot to live up to.

Just want to be clear that I didn't mean that as a personal attack. :)
 
Michael Traven said:
BTW, David, I didn't mean that you are/were irrational, but I do think that blaming studios for this is silly, since Netflix is the one that picked a fight with studios, not vice-versa. You don't expect studios to want to let everyone watch anything they want for $8/month, but that's what Netflix claims it wants to do and thus asserting themselves as the heroic middle-man, they've got a lot to live up to.

Just want to be clear that I didn't mean that as a personal attack. :)
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Oh, I understand. However, the studios were stupid enough to enter into the original Netflix sweetheart deals. Of course Netflix took advantage of that to build a subscriber base. The thing is, now that the studios have come to their senses and are trying to negotiate the value of their content, Netflix is a big player, and, even with the modest changes (I stand by that), are able to offer a great value to their subscribers. I am hoping that their economies of scale, and the negotiating power of their large subscriber base will continue to be the 800 pound gorilla in Hollywood and they will be able to offer their service at a value. So far Netflix is still a great value, for MY money. If anyone does not think that it is a value for their money, then they can cancel their subscription at anytime.
 
I for one do both DVD and Streaming. With this new price hike, I'm going to do Streaming only. The problem with Streaming like some mentioned is the selection, it's no secret that it sucks(for the average audience). But me personally I like the stuff that's on Streaming, I watch lots of foreign and unknown indie films which is what Streaming mostly consist of. But the average consumer don't care about indie films and foreign films, they Want the latest blockbuster. There's the problem, the price increase with the selection isn't justify to the average consumer.

David brought up some good history. I've been watching this develop for years. About a year ago when the price was raised to $1, I knew it wouldn't be long till another increase, but $6, I did not see that coming, not this early at least. But the funny thing is, don't think this is the last increase, I predict another one should be coming soon within two years or so.

Basically it's the Studios fault, basically Netflix has become tOo big for them and by keeping Netflix in pocket, they are charging a lot for their licensing fees. I guess you can't blame the Studios nor Netflix, but they will lose subscribers for sure, maybe not enough to bring them under, but unless they can update their streaming with more current content I feel the inevitable may happen. Long as Netflix stays cheaper then Cable then I will always be a subscriber, this new increase is just forcing me to give away my DVD by mail.

But the days of this incredible deal for unlimited movies for $9.99 a month are over my friend. It was cool while it lasted. THOSE DAMN STUDIOS!!!!
 
We have streaming and one DVD at a time.

Netflix needs to step up the offerings and make them more current on streaming.
 
Mike McNeese said:
+1

Really, who is gonna cancel their NF subscription over $6/month? Some might, but...it's $6. I pay more than double that to watch a few episodes of Dexter a month.
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Once the price increase takes effect in September, I probably will. I'll probably just start using redbox more.

It's funny that this is very similar to what Blockbuster did in the 90's. It would undercut all of the local video rental places, and once they were all out of business they jacked up the prices. Now that Netflix has way less competition (Blockbuster is as good as done), they jack up the prices...
 
I've only used it a couple of times, because I currently have Netflix, but whenever I am in the mood to watch a film right away and don't want to wait the couple of days for Netflix, I grab a bluray from Redbox, and they have always had what I want. I just reserve it online first, go over to to one of the kiosks minutes later, swipe my credit card and I am good to go.
 
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