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Why Netflix Had To Raise Its Prices
sperlingreich writes "Last week, after movie streaming service Netflix raised its prices by 60%, the company's customers took to blogs and social networks in revolt, threatening to cancel their subscriptions. However, between the cost of mailing DVDs and paying increased licensing fees for content, a Netflix rate hike was inevitable. Is it still a great movie bargain? What alternative services are there?"
The Pirate Bay.
Every time a new DVD becomes available on streaming, Netflix has to pay a higher licensing fee. When does it stop? What good does it do me if Netflix has 1,000,000 movies on instant streaming, but because of all the licensing fees, the service costs $100/month?
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
It's not even the all at once, IMHO.
It's the "you're getting better value with us raising the prices and nothing additional being added" spin they tried to put on it.
When their licensing costs from the studios went from 180Million to 1.8Billion over the course of two years... what did you really expect? How much more gradual could it be?
There are 10 types of people in the world. Those that understand this sig, and those that beat up people who do.
My "cable" company (if you consider AT&T U-verse cable; it's close enough) wanted $120+ a month to watch what I wanted and DVR it. Corrupt video? Schedule get screwed up? Local network happen to be out? I'd be screwed. This was on top of $50-$60/mo just for internet. So now it's $50-60/mo on internet plus $16/mo for Netflix, $8/mo for Hulu Plus, and I can still buy $96 worth of TV off Amazon or iTMS and still break even!
Of course I'm sure the internet providers (who also provide TV) will start getting bitchy when people start dropping their service for cheaper options over their existing network connection. But their service is crappy and their prices are outrageous.
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
$16/mo would be fair for being able to watch what you want, when you want...but that's not what you get with Netflix streaming. You get to watch what the studios approve of, for as long as they think you should be allowed to. Content trickles into the streaming library at a snails pace, and movies are frequently pulled after a few weeks. It's not all HD either, even newer movies which should be. Just because other options are also similarly overpriced does not make it right. The studios need to adjust to the new normal where they make less profit, have to deliver a higher quality of service, and give consumers the choices they want. The alternative is to keep taking massive hits from Bittorrent and non-sanctioned streaming sites. Until they realize that their stranglehold on content has ended and they need to compete with free (and that's possible, it really is), they're going to keep making mistakes like this.
Instead of raising prices and locking down selections and distribution channels they should be lowering prices, making things more reasonable, enticing people who haven't been paying to go back to legitimate channels. Release movies on Netflix and DVD at the same time, open up their entire back catalogue, make it available wherever and whenever the user wants.
But of course they won't do that. Some executive thinks their bottom line is better served by giving people less choices, charging more, suing people, and generally making the legal services the worst option.
If you build it, nerds will come. Soylentnews.org
It's misleading to say that they raised their rates by 60%. They did I suppose if you only have the unlimited 1 DVD plan + streaming. Going by the outcry I suppose there's a lot of people who have it. However, my family has the 4 DVDs + streaming plan and the price will be going from $27.99 to $29.98 a month. That's less than a small latte from Starbucks.
Instead of screaming at Netflix and throwing tantrums comparing the price increases to rape (google it, it's really sad) I wish these people would start screaming at the media companies to get some sort of reasonable pricing and access to streaming media. This whole sending me physical pieces of plastic through the mail is getting old! It's 2011 for crying out loud! Not only is there a terribly small amount of things I can stream through Netflix, but things disappear, almost always with little warning. My streaming queue has over 200 titles that are in the saved section because they were available once but are now not.
I understand what's going on behind the scenes, but that doesn't mean I have to like it.
This a thousand times. If they had said, "Our licensing fees are going through the roof, and this new pricing scheme will help us build an even better collection of streaming content," I would have been happy to pay a little more. Instead they told me how great it was that I was going to pay more for the same service, with no suggestion that an increase in available movies might accompany the hike.
Fuck 'em.
If what is currently "dvd only" content was made available for streaming at the same time the price was hiked, then I believe most people would have been okay with it.
You can all but guarantee the studios behind the licensing wrote in something to keep them from doing just that, no way they can appear to be the bad guys.
I have had the opposite experience. Our anecdotes therefore cancel out.
Hell, when I had cable I would have given up ESPN if it saved me $0.25/month.
Simple fact; I and many like me will not pay for entertainment and watch advertising. One or the other.
Did you really think $9.99/mo for 1 DVD at a time + all the streaming content you can eat was going to last forever? Those are *startup* prices. They do that to grow the business, then they jack up the prices when they need to be profitable.
And they're never going to include new releases in the all-you-can-eat streaming at that price.
I do wish they would stop changing the streaming / not streaming status of movies, however. It's frustrating when a movie that has been out for ten years, and was streamable last week, suddenly is not streamable. Can't say I understand the reasoning behind that, other than that their licensing just makes no damn sense.
Compared to digital cable that would still be a cost savings. How warped is that?
I, however, am highly entertained by paradoxes.
Humans are terrible replicators of Godly things.
I know people paying much more for much less.
Take any major cable provider. They charge per digital box, which is why you can't just hook up any TV anymore and get the premium channels, and then each box has its own charge for the premium packages.
So you get:
1) Advertisements. Way too many, way too frequent, and even channel surfing exposes you to the infection that is advertisements.
2) In-media Advertisements. Saw The Matrix for about 5 minutes on AMC a few days ago at a friends place. Was absolutely fascinated that people put up with that shit. There was an upper left advertisement for something. Breaking Bad logo and next play time in the lower right. AMC logo prominently displayed in the lower left. At least 10% of the entire movie taken up with NOT THE MOVIE.
3) High charges for channel packages including shit you don't ever want to watch.
4) Per box charges.
5) Hidden regulatory fees.
6) Pay per view and movie rentals where I get the * privileged* status of paying over $5 to rent a movie for the next 24 hours.
Riiiiigggggghhhhtttt
Netflix.
1) Still only $20.
2) Unlimited 2 DVDs as many times as I can get it.
3) Streaming options that are fairly good and getting better.
4) NO ADVERTISEMENTS.
5) NO ADVERTISEMENTS.
6) They just added Star Trek TNG, Voyager, and Enterprise. Check again. They are adding a ton of TV shows.
7) Starz play. That gets you access to some interesting movies streaming only available via shipping otherwise.
On the whole, Netflix is a great deal. Even if it goes to $40 bucks a month, you still have to pay far more than that for all the aforementioned bullshit in addition to the Internet charges from your ISP.
Competition?
Blockbuster. BWAHAHAHAHAHAHHAAHAHAHAHAHAHHAHAHAH!!!!!!!!!!!!!!!!!!!
Anybody even look at it yet? Those executives must be on crack. They are still trying to charge $3 and over for streaming movies and will "sell" you protected movie content that you "own". Seriously? Who is left that is still falling for that bullshit? If you have a DRMd file on some device it is only owned by you as long as the authentication servers stay up in their data centers and are still operating. How many have gone down and fucked all the customers?
Redbox is not out with its service yet.
Websites for the actual content producers are full of advertisements and bullshit too. Not much better.
The Big Media ISP cooperatives? They are trying to offer streaming and purchase services, but again, at $5 per movie.
Look at Dish Network. Sure, I can see a movie still in theaters, but they all cost more than $5 for 24 hours.
There is NO competition to Netflix at all and they know it.
$20 bucks? Wow. There are some really entitled and bitchy people out there that cannot see the big picture.
Of that list, I think the only one I'd consider watching is True Grit, and perhaps Black Swan. In fact, they should combine the two movies, for a perfect /. Meme movie .. "Natalie Portman in Hot (True) Grits.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.