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Netflix To Lose 1 Million Subscribers
tekgoblin writes "In light of the recent price increase at Netflix, it made quite a few subscribers mad. Netflix expects to lose around 1 million total subscribers in the short term after the price changes (which split off separate subscription plans for streaming video and DVD rentals). On top of the price increase, Netflix will lose their contract with Starz in February, which will cost them around 1,000 total streaming titles from their collection."
Well really, what the heck did they expect? The e-mail they sent out about splitting up the streaming and dvd mailing services was ridiculously patronizing.
I mean, I would have been a lot more okay with things if they'd just been straightforward and said "look, the people we get our content from are raising the prices on us, we need to charge you more to cover it". That's fine, that I can understand.
Instead, those assholes decided to pitch it as some sort of super awesome deal, where instead of being forced to pay for streaming and dvd mailing together, you're now paying for them separately! It's great! So much better than the old deal! And you, the consumer, are such an idiot that you're not even going to notice that the price of your plan increased significantly, doubling in some cases! (if you're like me and you were on the 1 dvd + streaming plan).
Do they not have any sort of market demographics at all? Do they have no idea the kinds of people that subscribe to their service? We're more likely to be early adopters, for goodness' sakes; we're not going to appreciate being talked down to like we're children who can't do math.
And look, I do appreciate Netflix - as convenient as Redbox is, it doesn't quite have the selection. It's just, reading that goddamn e-mail about the new plans left such a bad taste in my mouth I couldn't stand giving them money any more.
Considering this myself, or at a minimum dropping to a disc only. Their streaming library has sucked of late. I've used it too infrequently to merit the price increase.
I believe this is the risk of being pioneers on something, they inventing this tv streaming service and the dvd rental... Then suddendly the market you invent changes, and as you are the pioner you do not have examples to follow on your way to avoid sotck price to drop in your segment as well as a complete study on how your consumers will behave before the options you give.
I wonder how many of the people who stayed just picked a cheaper subscription option that didn't include streaming?
1) Bait
2) Switch
3) ???
4) Profit!
While losing a million subscribers is generally a bad thing... I would think they will be doing fine with the other 24 million of us.
No kidding. You don't even have to do the math to find out that after the new price change the loss of 1 million subscribers will still result in them earning more money total than before. Also it's expected that they would have to charge more for an increasingly expensive service to host.
Also, the prices for Streaming AND DVDs have gone up. If you do one or the other, you actually save money now.
"Our country is not nearly so overrun with the bigoted as it is overrun with the broadminded." -Archbishop Fulton Sheen
Perhaps if they had a client for linux, there would be some amount of offset due to incoming subscribers. If there were a player, I would be fine with paying their new price for service on linux. The only computers I have run either linux or FreeBSD, so there are no options for netflix for me at the moment.
Starz makes up a big portion of the GOOD options on netflix. I'm probably dropping my service for the blockbuster equivalent if I can get more choice.
The price increase would be fine if I got more in streaming... instead I just get more useless strange crap made in backyards.
I dropped the streaming service. The selection is so bad, it's really not worth even $8 a month to me. I'd gladly pay significantly more if the selection was significantly better. I hope they can get their licensing issues worked out!
I don't respond to AC's.
I ditched them for Blockbuster and I'm happy with the service. I'm paying a bit more because I hadn't been getting Blurays, but for the money I'm getting Blurays and games as well. Seems to take the same amount of time to return discs as I was with Netflix.
I have to admit that I get a lot of satisfaction out of their share price dropping by fully half since they announced the price hike. It's amazing to me that they thought that they could make that comment about it being the price of a couple lattes during a period where there's a lot of people who are really hurting for work. Especially without even bothering to roll out anything new to justify the price hike.
Worse still was the comment later that it wasn't to pay increased licensing demands.
The problem is that Netflix was the leader in the industry and had mostly run the competition out of business. This particular misstep was ill timed as Blockbuster isn't yet out of business and there are several other providers of streaming media that are needing customers to get started.
Driving a million customers into the hands of the competition at this stage is really bad for them. OTOH, it's really good for the consumers as there are still other options available.
I tried changing my bank account info and when I called to ask them to reverse a pending charge on the wrong/old account I was told that I would have to close/cancel my service with them, and then restart service at a new higher rate!
So I cancelled. Completely.
Now I have to play the "contest the charge on the credit card game" even though I cancelled on the 9th the charge still showed up on the 11th.
You'd think they would be doing anything to just maintain their current customers, but evidently not.
Say hello to RedBox !
Old age and treachery almost always overcome youth and skill.
I am more concerned about Netflix loosing streaming titles than the price hike. Out of about 50 titles in my instant queue only 5 or 6 are available for streaming and the number is in fact decreasing. If Netflix looses more streaming titles then I will probably switch to DVD-only plan or go to DirecTV/Blockbuster.
I am trying to stay. I like my streaming only subscription in spite of the limited selection. If they would license more stuff for that, and honestly push that I'd be willing to eat a price increase. Right now at $8/mo it's a bargain, let loose the first run movies and TV, and they could double my price. That would still beat the hell out of TWC or Uverse. Even figuring in part of my ISP fee (a higher speed connection because I knew I wasn't going to be getting a cable package) it's way better (for me) than cable. Oddly that net connection is thru TWC, their net service is good, their cable service sucks.
I don't want/need nor will I use the DVD plan. waiting on a single disc wtfever on that shit...
That's me. I dumped the streaming service. I very, very, very rarely used it to begin with. It was bad enough when they [i]raised[/i] my price the first time in order to cover other people streaming all of the content they wanted. Now I only pay for the number of discs I want, and it's about the same price I was paying years ago.
"He who can destroy a thing, controls a thing." --Paul Atreides, Dune
Streaming library does suck, but it isnt like Starz was putting out the latest in greatest. In fact they have not updated in a while.
Out of 1,000 movies, a good 70% of them are old black and whites, or westerns, crap I could care less about. Another 20% is kids movies, and out of the left over 10%, well... I watched all the good ones I wanted to.
But I do watch some of the series they have on there... Firefly (rewatch that alot), Scrubs (rewatch), Star Trek series (Watching Enterprise now), Law&Order CI (watching), etc.
That makes it kinda worth it. They have a few more months before I decide to drop them.
Where they really fell down was how they tried to sell it to the customers. It's pretty well established that during a down economy you don't raise prices if you can help it, you definitely don't raise prices by +60% and if you have to do that then you certainly don't make condescending comments about how it's only the cost of a couple lattes. Lattes are much less elite than they used to be, but they're still significantly more expensive than the alternatives are.
I might have gone along with it had they been honest about it rather than them making condescending remarks implying that they didn't need or want my business.
It's tough to be the middleman... Netflix stands between the consumers and the content providers, but streaming video is rapidly becoming a commodity, so no doubt the content providers will get greedy and decide they want to own the whole thing end to end. I'm sure they'll ignore the amazing feat Netflix has accomplished (namely getting people to pay for streaming content online) and attempt to set up their own sites with onerous terms (pay-per-view with 24 hours to start) and high monthly rates, then be all surprised when no one signs up and start claiming piracy is destroying their business.
I wonder how many of the people who stayed just picked a cheaper subscription option that didn't include streaming?
1) Bait 2) Switch 3) ??? 4) Profit!
I went streaming only; the physical media via mail doesn't really appeal to me anyway.
If they lose customers, but get more money per customer, it can work to Netflix's advantage big time. Their costs are mostly on bandwidth, and if they lose 1 million customers, that's 1 million fewer people to feed data to. That amounts to major cost cutting, so even if revenues drop a little but are offset by lower costs then they win.
You can lead a horse to water, but you can't make it dissolve.
This comment hits the mark right on the head.
It was bad enough before how much content was actually available to stream versus by mail, especially compared to (not really competing, I guess alternative is more apropos) services e.g. XBL. Now that service is losing even more titles due to licensing issues with Starz. What terrible timing to try and spin a price increase as something consumers actually want, when the service you're charging more for is actually LOSING VALUE. This makes no sense on the face of it, especially in today's atmosphere of belt tightening and budget trimming.
I spent 10 minutes looking for my old login information just to see if I had mod points to promote this comment, alas I had none.
--Ks9
If they expect to lose this many customers, they must also expect to gain enough of a profit margin from the price hike that they can afford to lose this many customers. It's not like they're standing under a bridge and expecting it to fall on them - they are electively changing the prices. This is assuming that a rabid monkey hasn't taken over the management of Netflix, which is not an unreasonable hypothesis given their bizarre adherence to their horrendous new interface despite an overwhelming sentiment of repulsion from their user base.
The idea of even offering plans that are essentially equivalent to cutting a video store in half arbitrarily is so viscerally unappealing - it is just a setup for competitors to step in. The sooner the better - good riddance netflix.
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I've tried repeatedly to restart my subscription, since the DVD-only option is very appealing. But they don't even offer it. (No lie.) I don't see streaming as a viable option for many years, so it's back to the public library for me.
Odd because my plan dropped significantly, enough that I switched to the 5 out at a time plan, which BB doesn't even offer. How the blockbuster streaming working for you btw?
For streaming you might also want to check out Crackle. It's ad supported, but the ads seem to be infrequent enough as to make it a reasonable proposition. Also, Amazon Prime is worth a look, but they have a small catalog IIRC.
I'm not impressed with the streaming movies, but the documentary/history selection keeps me entertained.
Do you even lift?
These aren't the 'roids you're looking for.
So they increased their prices by 60% and didn't lose even 10% of their subscribers? They win. Maybe they should raise the rates again.
Sorry, but gray text on gray background is making my eyes bleed.
I'm sure they didn't want to hike their prices. But the studios that provide the movies and TV shows demanded huge (like, order of magnitude) increases in their cuts. Netflix had a choice: close up shop, or raise prices. In the end, they may go under either way. That is the studios' goal, after all. They want to control distribution.
Also went to Blockbuster. We only use Blu-Ray and DVDs (no games or streaming). Netflix took so long to send us new releases (spent 2-3 weeks in the "Long Wait" queue) that my wife would usually rent from BB. We have a BB store within 10 minutes and now that they've gone to unlimited envelope exchanges in store, we are MUCH happier than we ever were with Netflix. Plus, BB gets new releases a week or two before Netflix.
Netflix is not saying that they will be losing 1M of their existing customers. Rather, they're altering their guidance for the next quarter by 1M subscribers, which is an important distinction, since it more or less halves the impact from what most people here seem to be thinking. Previously, they had been expecting a decent growth of 400K in the upcoming quarter, but now they are projecting a net loss of 600K in the quarter, hence the 1M number. Yes, it's bad, but it's not as bad as losing 1M of your current customers in addition to however many potential customers you'd lose as well.
The article and most of the other blogs are glossing over this detail, but numbers are always important.
http://www.latimes.com/business/la-fi-ct-netflix-20110916,0,5009354.story
Considering that it seems like at least 20 million people were swearing up and down they'd cancel when this rate change took effect, 1 million doesn't seem so bad. OK, it does seem pretty bad. However, I think the much bigger problem is their loss of content (Sony, Starz and whoever else is next) and the soaring licensing fees for the content they do have.
That's really not true. According to Netflix, the reason for the price hike has nothing to do with licensing fees. Which makes me wonder what precisely it is that they're needing the money for.
Let's assume 25M subscribers at the standard DVD + Streaming plan, which I believe was $11/mo. We can chop off a few zeros and still get the same effect, so let's do that and keep our math simple.
25 * 11 = 275
I think the cheapest is now $16 for both, so let's figure out what they'd be making if everyone who stayed kept the same plan at the higher rate.
24 * 16 = 384
Let's derive a quick formula.
(24 - x) * 16 + x * 8, where x is the number of people who choose DVD /or/ streaming.
24 * 16 = 384 = (24 - 0) * 16 + 0 * 8
Now, let's solve for 275, to assume they'd be making the same amount.
275 = (24 - x) * 16 + x * 8
I put this into my handy equation solver because I'm too lazy to work it out in my head and can't find paper/pen...
x = 109/8, or 13.625.
Netflix could go down to 10.375M users of the DVD+streaming, and have 13.625M users of one or the other and still make the same amount of money.
Methinks Netflix did their math beforehand. They're going to be making bank, and savvy shareholders are buying now on this dip on bad news. Happens every time. Netflix is here to stay, for as long as the content owners will allow it to exist.
Colin Dean Go a year without DRM
Netflix doesn't have a streaming plan. At least not one that can accurately be called one. I rarely if ever used it as the selection was so poor. It was overpriced at $2 a month and it's even more overpriced at $8. For that I can get hulu or rent a couple movies online from Blockbuster.
I find it quite interesting in the netflix prediction:
Prior to model change:
Streaming only: 10,0m customers
Streaming+DVD: 12.0m customers
DVD Only: 3.0m customers
Post-implementation of the new pricing model, Netflix expects the customer base break-out to be:
Streaming only: 9.8m customers
Streaming+DVD: 12.0m customers
DVD only: 2.2m customers
So let me get this straight - the price for streaming+dvd is at least doubling - and Netflix is not expecting that customer count to go down at all. Instead, they are expecting a net loss on the two plans they are creating to make things better - instead of a net loss on on the plan that is going up 100% for many customers.
Hurting for work but able to waste money on lattes and netflix.
I think they made that comment before they lost their sweet heart deal with Starz.
I switched to their competitor who has more content and better prices!
We also went streaming only. If Netflix doesn't have something I want to see, I can usually find it on a different service like Vudu.
I'm wondering if 1 million lost customers might ultimately help Netflix when negotiating for streaming rights. The copyright owners have an unrealistic (IMHO) idea of what their movies are worth and now Netflix has hard data to show that a significant number of customers will not pay more.
Netflix did better than I thought they would. They only lost 4% of their subscribers over this, and it looks like their revenue is going to go up. Pretending that everyone was on the cheapest plan, they used to have 25 million subscribers paying $10 a month for $250 million/month. Now they have 21.8 million paying for streaming and another 14.2 million paying for DVD, each at $8 a month for a total of $288 million/month. Since the price of the larger plans didn't change as much as the cheapest one, I think it is safe to say that they will be making more money when this is done than they did before.
Suppose they had given a $2 discount for people on both plans, like I thought they should. They would have increased revenue further by doing that if everyone stayed, and 2.6 million more people decided to go with both plans, or alternately if the same number left but 4 million decided to have both plans. Of course, that doesn't consider increased costs of both plans.
No kidding. That email was a spin-fest from the beginning and the executive team should be roasted about it at the next shareholders' meeting. It insulted the hell out of customers. If they had said something like "yes, streaming has gotten a lot more expensive for us to do, if you want to do it you're going to have to pay more - a lot more," then customers would not have been happy - but they wouldn't have been condescended to like a group of fourth graders. (Hint to fourth-graders: they're treating you badly because you're too young to be able to fight back. They're bullies. Remember that when you grow up - people who bully kids are, without exception, assholes. As a corollary, be kind to the teachers who treat you like a young, unwise, but nonetheless real and valuable person, because they're actually looking out for you.)
Blockbuster could be free and I still wouldn't do business with them. Watching all the Blockbuster stores in my area close over time has been pretty satisfying.
You're right that there are lots of other great options though. Other than Netflix, in the past year I've rented from RedBox a few times (including some games), from Directv, and from Vudu.
I agree with you there. The Netflix recommendation system has to be one of the most confounding things about the service. For example, I generally dislike George Clooney and his films, so I consistently rate them low - as in 1 or 2 stars. Every time I do, the recommendation system whirs and clicks and comes to the conclusion that I didn't like that film because I HAVEN'T SEEN ENOUGH Clooney films and proceeds to start recommending a stream of Clooney films! And it's not just Clooney - it seems like a great deal of the time when I rate a movie, I'm liable to get recommendations for either similar titles to something I rated poorly, or something wildly unrelated -- like "You enjoyed Terminator so here's a recommendation for Spongebob Squarepants". WTF???
Don't be too hard on Netflix; It seems they are caught between a rock and a hard place. The studios let them get by on table scraps before because they didn't see them as a serious revenue source, and saw them as just an opportunity to pick up minor bits of revenue which they wouldn't otherwise collect. Now Netflix has everyone's attention, and the studios are going to want the full slice of the pie. Analysts predict that Netflix licensing is going to increase from $180M to 1.98B in the next few years. With that looming over Netflix, they must be desperate to find a strategy to cope. If the studios get their way and Netflix goes down or concedes to their desired licensing, then we all lose and we end up paying $60 to $120 per month like we pay for cable instead of $8 / month. Personally I just have the Netflix streaming service and no DVD. I don't care about the DVDs, but I wish they streamed more videos. It would be nice to have Netflix under Linux though, so I wouldn't have other options than my console.
So according to TFA, Netflix had 12 million people paying $10/month for streaming+DVD. Those 12 million people will now pay $16/month. That's an extra $72m/month.
10 million (like me) are streaming only at $8/month. They're losing 200,000 of those, or $1.6 million/month.
3 million get the DVD only plan. They're losing 800,000 of those. I don't know what the average DVD only customer pays, but let's be generous and say it's $20/month. This'll cost Netflix $16m/month. They're still $55 million/month in the black.
So you're all saying Netflix has done something really stupid because they're...making more money?
Netflix has pissed people off simply because people don't want to pay more, not because the service isn't worth it. I get TONS of value for my $8/month. I may get around to adding the DVD bit for those shows I can't stream because another $8/month is peanuts. I spend more than that for one movie ticket. I spent more than that on lunch today. But somehow I'm supposed to be all outraged that a service I actually like wants me to pay that much to watch movies all month long. I just don't see it. Sorry.
And let us not forget the role of Silverlight in tanking the Netflix experience. It's the direct cause of our recent cancellation.
OK, so they lost 1,000,000 of 25,000,000 that are ditching NetFlix. But what I want to know is how many that were paying $9.95 before said "screw it" and just reduced their payment to $7.99, taking only one of the two services, hopefully DVDs by mail. And overall how did this price increase affect their gross and net income.
I'm an American. I love this country and the freedoms that we used to have.
You certainly made the "short list" of features that led to me giving up my Linux install and my wonderfully uber-compatible XBMC installation. In fact, you were the most important factor leading to the change. The fact that XBMC and MythTV work together as well as the Bundys when it comes to broadcast televison, well, now that I think of it, that's the only other reason. Rest assured, you were the reason for the switch.
Now, Microsoft made $50 on the transition; I'm a student. And Windows Media Center is pretty damn good, once sufficiently beaten into submission. I have it now as compatible with videos as XBMC, with metadata collection and display almost as good. However, you guys were nice enough to build an add-in to WMC, cool. $8 a month is pretty awesome for HD movies to just be THERE. Schweet.
However, that just ain't the case. Even though I'm a lucky bastard and can pull down about 3MB/s (and yes, I mean a little over two 1.44MB floppy disks, or maybe 0.0001 Libraries of Congress), "HD Video" just won't play. I don't use quotes for effect, I use them because that's what you call it, I can't get your player to cough up any information about what the hell resolution, frame rate, color profile, or codec. It skips and sputters, surely because Silverlight 4 isn't hardware-accelerated - but Silverlight 5 just isn't there either.
Now, I can: 1. Minimize WMC. 2. Start Firefox. 3. Go to your website. 4. Log in (WMC is logged in separately). 5. Go to My Account. 6. Click Video Steaming Settings (or whatever the hell it is) 7. Change the rate to 1GB/hr. and 8. Click Next. This gives me a 404 error, but it's been changed. 9. Return to WMC, completely stop the movie, and restart. Then we have video. I can't change that shit in the WMC client. That's cool, but it's not HD. Can I get a discount?
Now, I'd be cool with the fact that my HTPC (which is otherwise quite capable of 1080p, thankyouverymuch) isn't getting HD content, because I could at least have that thing playing and use another device, like my iPhone. Now, I was paying for the ability to stream HD to one device, and I wasn't getting that. I can't give you numbers for sure because your client is so locked down. However, I'm pretty sure that the SD-only stream my HTPC receives plus the mobile video on my iPhone still isn't the resolution I was paying for, but that's now blocked.
Can I have my money (and time) back?
(P.S. Dear Slashdot: You owe me karma back from the Google+ post. How the HELL did that end up there?)
Are getting screwed. I like the option of getting a DVD for a show that wasn't available via streaming. But when the price changes came, I decided I used streaming more than the real video service, so I opted for the streaming only at 8 bucks a month. Now they are losing stars, which means I am not essentially paying the same for a greatly reduced service.
I have seen the value acquired for the dollar spent on netflix rapidly diminish over the past several months. I'll probably end up canceling entirely and go back to waiting for a service to come along that does streaming right.
( note: I'm not entirely blaming netflix here, they're the middle man and have to play games with the content holders, who we all know are bastards. Doesn't change the end result however. )
Mod me down with all of your hatred and your journey towards the dark side will be complete!
They are loosing rather than gaining streaming content (decent stuff over 1 star that is) with their failure to keep starz. They better do some damage control and fire a few executives.
(If at first you don't succeed, do it different next time!)
The funny thing is Netflix turned a lot of pirates into legitimate customers. Some pirates I know dramatically dropped the amount of piracy they did after they bought a Netflix account. Stunts like this might actually reverse things. Content creators need to realize that a lot of people are willing to pay. They just want the content when and how they want it. A smart content creator would be trying to nuture and shape services like Netflix and make a model that make both sides happy. Also, I am so tired of running Netflix in a VM.
How is that anonymity working out for you?
Thank you for pointing out that I was tired while posting and made a mistake or two.
actual example:
The Natural History of the Chicken (a documentary on the history of the chicken)
Because you enjoyed: We Jam Econo: The Story of the Minutemen
WTF Netflix?
Hand of the free market at work. X customers willing to buy at Y price equals Z total revenue. You maximize profit often leaving many customers out of the equations. Its just that simple for Netflix as it is for food, water, safety, legal representation and healthcare.
Its capitalism just what our founding fathers, Washington, Jefferson, Lincoln and Rand had in mind.
Comment removed based on user account deletion
Unless something's changed in the last week or two, they've already lost Starz (The Washington Post, CNN Money).
--Ks9
My wife (who is homebound due to a workers comp issue) watches Netflix streaming. A lot.
She complains continuously that they do not have the latest releases available to stream, but then she finds herself a new (to her) TV series and watches that.
And when I say "watches," I mean "vigorously consumes". She starts from episode 1, and goes until she reaches the end.
She uses up to about 450 gigabytes per month of bandwidth doing this, by my measurement.
So, as saddened as I am that Netflix's new pricing scheme has finally come to shove, I am moreover disheartened that I have allowed such a travesty to fester to such an extent that it affects all of us.
I would like to take this opportunity to apologize. I am unreservedly sorry for my wife's behavior and any impact that it may have upon you and your family.
-adolf, #21054
Kid-proof tablet..
They're losing a million customers, but only 200k would be streamers. Now, 800k seems like a lot, but the disc-only crowd also has high expenses because of mailing costs.
It's the 200k streamers who they won't have that I'd worry about. Netflix is changing their business model and the company is screwed if they can't increase the number of streaming customers.
Heck, the linked article even includes a set of charts showing where Netflix plans to lose customers. Yes, Netflix will lose 200K streaming only customers and 800K DVD only customers. On the other hand it expects to have roughly the same amount of users that use both services (12 million). The difference, of course, is that now these 12 million customers (roughly half of Netflix's users) will be paying twice as much as they were previously.
And somehow the idiots on Wall Street think that this is a *bad* sign. Netflix just doubled the revenue that it extracts from nearly half of its userbase. The cost to the company was less than 5% its userbase, and 8 out of 10 of the customers Netflix lost were the DVD-only customers that are more expensive to service anyhow.
It almost makes me want to rush out and buy stock in Netflix tomorrow. Eventually the boneheads that do financial reporting are going to do the the math, and realize that the folks running Netflix are *much* smarter than they are.
If I do, it will be for the streaming only service. If there is something only offered by them on DVD, then I'll just download the bitch elsewhere.
He was fairly obviously joking with that last sentence.
Well, it's only a 60% increase for those 12million. But I agree. Netflix would certainly have done their calculations. The other factor to consider is that the DVD rental service has a cost (postage, lost DVDs, cost of tied up inventory (i.e. the total value of DVDs that are currently rented)). It's possible that this was costing Netflix more than the $2 they were getting or at least close.
The bad PR they suffered from the price hike seems to have been fairly minor, and will be forgotten about soon enough. "My video rental costs have gone up" really is a first world problem. Very hard to feel a lot of sympathy and it's still a pretty good deal.
Does the Blockbuster service offer streaming, or is it strictly disc/games? Would consider switching myself if I can find a comparable service.
Relax. It's something called sarcasm. I'm sure this guy watches The Colbert Report.
"No matter where you go, there you are." -- Buckaroo Banzai
Are they talking about the 1 Million who left immediately when the price hike was announced, the 1 Million who left the day it took effect, or the 1 Million they expect to leave within a short time after it took effect?
With all of the patronizing that Netflix did, what they haven't focused on is the group of people who are probably going to be cancelling one to two months out. People don't generally cancel upon the announcement, but once they start to realize how much they're NOW paying, the impact gets felt, and then they start to cancel. I've loved Netflix from day one, but that announcement left a really bad taste in my mouth (like when they tried to raise prices before and received a backlash from customers who cut down on their service). They literally acted like they were so brilliant in their decisions that ANY RESPONSE from customers was irrelevant. I felt the impact this month when my fees went up for the same service I've received since day one with no added benefit. Sure, it's still cheaper than other stuff out there, but it's never been a necessity for me, and I was one of the early adopters because you always, until now, felt Netflix was at least on your side. Instead, it's just another business that feels customers are necessary evils in order to get insane profits. I've been watching a series on streaming that has me in the 5th of 7 seasons right now. When the 7th season finishes streaming, I will cancel Netflix forever. You see, they thought that people would jump over to one of their two choices (streaming or DVDs) once forced to pay for both, so they accounted for that. What they've not prepared for are the people who will jump ship completely and NEVER COME BACK. Those are lost customers that they can't win back through empty promises, special deals or whatever. A lost opportunity is a lost revenue stream, no matter how you look at it. If they profit because of the rest of the sheep who stay, great. If they fail, it was their own greedy fault.
Sarbonn's blog: http://www.sarbonn.com/blog
Bandwidth is negligible compared to DVDs. Postage costs far more on a per movie basis. If anything, it's new royalty demands for streaming content, as bandwidth and postage have remained relatively unchanged or have only had slight increases. Royalties, on the other hand, are catching up to streaming content in a big big way.
I sympathize... sorta, and not really. I've been vocal in flipping Netflix the bird on this one. If they think streaming OLD movies is worth $8 a month, they're dreaming. And rather than pay another $8 for DVDs, I can go to RedBox for $1 DVDs or $1.50 Blu-Rays, and they are mostly NEW movies.
Now, RedBox has a delivery system and logistics that truly impresses me. They also have physical locations just about everywhere. The fact that they beat Netflix on price, and I can fluctuate my viewing habits (1 this month, 20 next month, none the following month) is huge. Why Netflix never went to a "Only pay for how many discs you receive per month" absolutely boggles my mind. It would have been a better direction to go here, have taken care of the people who really cost them money (people who get more than 6 per month), brought their prices more in line with local retailers, and might have justified the price hike on streaming.
But they haven't, and now their services are overpriced. So, in my oh so humble opinion, they can go take a flying fucking leap into a cold fucking pond... with all due respect and sincerity.
I8-D
Ah. Mr. Stock Market. So nice to see you again.
May the Maths Be with you!
I agree about the TV series; they're probably what I use the streaming for 80% of the time. I've watched through Arrested Development, Doctor Who, (some of) Star Trek, Battlestar Galactica, and a few others. I rarely even look for recent releases (either I watch them in the theater or they'll show up eventually), so I'm rarely annoyed by long waits. I guess I'm one of those few that feels that the raised price is still totally reasonable, and the prior price felt like highway robbery (but not in a bad way, of course).
I currently put my sub on hold until December to see what they might have to offer in the future but if you are losing contracts then I don't know how that bodes well for them...
fees from one company and less to another for the sheer purpose of destroying competition?
If they are getting an extra $6 per month from the 12 M subscribers who do streaming + DVDs, that's $72M.
Losing 1M subscribers (it's from the DVD only and Streaming only categories) is a loss of $8M.
4/5 of the lost customers were from the DVD only side, the more expensive business they are trying to sideline.
I don't want them to go streaming only. Netflix killed the mom and pop video store in my town that carried a giant library of obscure films for 20 years. Netflix streams a tiny percentage of the movies on my 'to see' list.
But I don't think is a good way to persuade them to reverse course.
and go the way of blockbuster.... to bad so sad... oh well.
Which makes me wonder what precisely it is that they're needing the money for.
Obviously they need the price hike to balance out the loss of customers they were planning to get from the price hike. What... what??
Same here, we dropped to streaming only. We rarely ever got DVD's anyways. I'm happy in the long run since im saving money.
I knee-jerked when they upped the rates, dropping DVD. After all it was the beginning of Summer. No time for a 2 hour flick. Time to be out side. Now that the weather is cooling and the sun drops sooner, I'll add DVD's back,...until next summer. THAT is MY business model. BTW Dish content sucks much worse than Netflix and cost $40 more a month.
Please mod me 1 or troll. It's where the truth is these days, even on Slashdot. Beware the power of moderators everywh
I went streaming only; the physical media via mail doesn't really appeal to me anyway.
Same. I've got Redbox or BB kiosks close that will fill any disc or current movie needs.
And with DVD rental going via postage there's always the fact that the USPS wants to decrease the number of days mail is delivered. That's only going to hurt the DVD side as people aren't getting DVDs as soon as they want.
"Lack of speed can be overcome. In the worst case by patience." --Znork
I'm going to say no offense, cause I mean it but it'll
still sound offensive.
Blockbuster could be free and I still wouldn't do business with them. Watching all the Blockbuster stores in my area close over time has been pretty satisfying.
This kind of idiocy, kills free market and allows prices
to be driven up. Why herald the death of Blockbuster?
Because they were late to market? Had high prices?
Aren't we mad at Netflix for changing prices? Wouldn't
it make more sense to support the competition so it
can stay around and help keep prices down?
Shouldn't we be mad at Netflix now? Not the 'underdog'?
-AI
For me, it is far better to grasp the Universe as it really is than to persist in delusion
I actually like their streaming plan - they have lots of documentaries, classic & foreign films, and enough kids' stuff to keep the rugrats happy.I just switched from the $9.99 1 DVD at a time to the $7.99 streaming only plan; if something new comes out on DVD I can always get it from Redbox or something. The loss of Starz may make me rethink things though, it's nice to have those newer things available. With kids I don't have time to watch a whole lot of stuff anyway, and I find that my tolerance for ads has gone way down after years of DVRs & no-ad streaming, so I don't really see Hulu as an alternative. Maybe I'll check out Blockbuster at some point, but my ingrained dislike of them still hasn't faded enough.
So your plan is to go to the store that was so behind the curve, they went bankrupt, were bought by MAFIAA studios, and now aim to shut out competition by pulling releases? I'd like to see how satisfied you are when Netfilx shutters, and BB raises prices with no benefits to users.
Absolute power corrupts absolutely. indymedia
Why herald the death of Blockbuster?
Two words: late fees.
It isn't offensive and unless you know the backstory it does sound idiotic. Way back in the '90s, Blockbuster was very powerful and dominated my local market. They treated customers very poorly back then. They screwed me with bogus fees a couple of times and I finally vowed to never do business with them again.
These days I have an unbelievable number of options for entertainment, so the loss of Blockbuster doesn't worry me at all and in fact I'm happy to see them go.
I'm aware of their correlation strategy, and within genres I think it does a pretty good job. For example, being a fan of 70's & 80's exploitation films, I'm more interested in how other fans of the same genre feel about a given film and less interested in the general public's rating. It's the cross-genre recommendations that seem to flub up. Taking the Terminator/SpongeBob example, I suspect the cause of this is probably along the lines of: Mom and Dad get Terminator, watch it, enjoy it and rate it high; next in queue is SpongeBob for lil' Timmy, he watches it, enjoys it and thus Mom & Dad rate it high. Thus the correlation alogrithms think people (as opposed to accounts, I suppose) who like the Terminator will also like SpongeBob.
So is it a perfect system? Nope, never will be. Do I expect a perfect system? Absolutely not. Is it useful? Sure - in certain specific, yet common, situations. Can it be improved? Yep - one quick idea off the top of my head is to allow sub-accounts at least for the purpose of rating films (not touching the idea of sub-queues). That way Mom, Dad, lil' Timmy and I can all get recommendations based on our individual tastes.
Thanks for the tip on Vudu - that might be enough for me to drop the Netflix disk. The only bad thing would be if I was to rent a season of a show - trying to watch that in 2 days and all. Then again, I guess I could pony up a couple more bucks...
I'm a streaming-only customer with no intention of subscribing to Netflix's DVD service. My prices have not changed, yet because of the small percentage of whining customers who will need to incur a $6 per month price hike, I get screwed because investors now see all this whining and media hype as a major problem. But it's the wrong problem that the media and all these whining customers have been focusing on.
Prices go up, and as DVD subscribers goes down, costs to manage the remaining DVD subscribers will go up. Postal rates will go up. Studios charge more for DVDs. It's how things work. But that's NOT the problem.
The real problem is that Netflix used to have a great deal going, then the studios finally realized that they should get their cut, and they aren't happy with a small cut. So they in turn screw Netflix by either hiking their rates, or not renewing contracts because they can go elsewhere. Meanwhile, the media and "oh so pained" customers get the attention, but this real issue gets brushed aside.
My mom always said, "Jim, you're 1 in a million." Given the current population, there are 7000 of me. God help us all!
just what our founding fathers, Washington, Jefferson, Lincoln and Rand had in mind.
I think you were too subtle there, there haven't been any "don't you know Ayn Rand wasn't one of the founding fathers" posts yet.
To have a right to do a thing is not at all the same as to be right in doing it
If blockbuster were smart, they closed down their stores, but are keeping their online presence...so my thoughts are for them to become relevant again,
let them try to setup pricing to go get those 1 million unsatisfied customers.
With the U.S. Postal service planning to increase delivery time to save costs, that could gum up things for Netflix pretty badly.
"Who controls the past controls the future. Who controls the present controls the past." -- George Orwell
I have to take two one-hour long train rides each day during my commute. Nextflix + Verizon 4GLTE == catching up on my documentaries on the way in and out... okay, well more like catching up on Lie to Me this week, but I have a bunch of documentaries on my Q that I'll get to eventually. L:D
-GiH
When I read comments from people talking about ditching Netflix in exchange for Blockbuster, because they have better prices, I always assume that you are all under the age of 25 or so, maybe younger. Anyone who was ever a Blockbuster customer prior to them having any kind of competition, knows what kind of epic overcharging assholes they were.
I watch documentaries and foreign films. I did a comparison (searching for favorite titles) and could not find what I wanted on Blockbuster but they were available on Netflix.
If Blockbuster would carry long-tail title, they might get my business. In the meantime, Netflix is the only way for me to see the films I want to see. No brick and mortar store rents them in my area (read: anywhere in Iowa) and Blockbuster doesn't even have them with the shipped disk method.
I dropped the streaming service. The selection is so bad, it's really not worth even $8 a month to me. I'd gladly pay significantly more if the selection was significantly better. I hope they can get their licensing issues worked out!
Because of this reminder-story I managed to downgrade my account to 1-dvd-only before the super-fantastic-screw-the-customer plan got billed to my account. Made the cutoff by 3 days. Have to agree, the streaming selection is pitiful at best. None of the past 10 things I've searched for were streamable and some are 10-year-old TV shows. Really? Can't stream Freaks And Geeks? Bah.
I just crunched the numbers. While Netflix stands to lose about 1m subscribers, they will have markedly higher revenue. Using the numbers from their July 25th guidance, they anticipated 25m customers with monthly revenue of $223.75 million. The revised numbers show 24m customers with revenue of $287.64 million per month. And that last number is a conservative estimated assuming that all of their DVD subscribers are on the cheapest 1 DVD at a time plan. So, to recap: Netflix has increased revenue per customer by 33.85% at a cost of 4% of their customer base. That's good business, folks.
while i understand it, I don't support it. I will cancel my subscription once this goes into effect and already signed up for amazon prime streaming. Been using netflix since before the dot com bubble popped and it was sad to see them have no care for the people that have supported them and made them who they are.
..just because you can, doens't mean you should...
I didn't subscribe to Netflix because I wanted the latest content. I wanted something decent to watch, when I wanted to watch something, and I wanted it cheap. The $18 a month I pay for Netflix is still way cheaper then the $60 I was paying to Comcast for shows I didn't want to see and that were loaded down with commercials I didn't want to watch. When I did the math and realized I was paying $720 a year for that privilege, it was time for a change. It's not that I can't afford it, it's just not worth that amount of money to me.
20 years ago, blockbuster tried to bill me over 100$ in late fees, plus the 'cost' of the VHS which they claimed was 49.99.
This was after I called them the day I rented the movie and informed them that I was sorry but my pet damaged the VHS tape. 2 months later I got the bill for almost 200$ in the mail, I called their manager, basically told them they were fucking dreaming if they were ever going to even see me again, let alone pay this invoice, if they wanted me to pay the standard 24.99 retail of the fucking movie THAT THEY WERE SELLING FOR THAT PRICE, I would, but until I got a correct invoice, as well as a written apology from a blockbuster executive, they would not receive a single cent from me, and I would tell everyone I know this story whenever blockbuster was brought up.
I kept my word for 20 years and single handedly stopped hundreds of people from patronizing blockbuster. I am proud to think I helped play a part in that company's downfall.
I'm guessing you're not old enough to have seen the mass overcharges that blockbuster tried to pull in the 90's when they had a near monopoly. I haven't forgotten, nor will I.
I remember how they would open a store across the street from an established, successful, large catalog independent video store and try to drive them out of business. If that didn't work, they would offer increasingly outrageous sums to buy them out. Once that was done they would operate the store long enough to sell all the movies and then board it up.
It made me sad to see so many good stores with personality driven bankrupt to feed the blockbuster machine. I took great pleasure in watching blockbuster go bust.
Man, you really need that seminar!
A HTML5 Chrome plugin was just released. You may be able to use that in whatever Linux you use, or boot to Chromium OS.
Man, you really need that seminar!
They were bought by Dish Network - how is that MAFIAA studios?
//m
Sigh, it is just TV/Movies, and Netflix has a decent price, and so far enough content that we find enough stuff to watch, and it works at work and at home, which was why I started when they finally added a streaming service. Heck, we did have the 1 DVD + Streaming and after about 5 DVDs in we had one DVD sit for several months, was glad to finally have a reason to send it back. If Netflix gets too expensive, then fine, there is enough other things to do. There is still hulu and youtube which are supposedly legit and then maybe not watching is a reasonable idea. Netflix is hardly comparable to the cable, electric, cellphone and internet costs...
I have to admit that I get a lot of satisfaction out of their share price dropping by fully half since they announced the price hike. It's amazing to me that they thought that they could make that comment about it being the price of a couple lattes during a period where there's a lot of people who are really hurting for work.
then maybe they can get a job instead of watching Netflix!
or just transition to streaming only and get over it.
I mean seriously for the level of entertainment they provide, it's a wonder they're not charging at least $30. Their internal studies have shown most of their subscriber base would be content paying that much. It's certainly worth it.
Because people want "all you can eat" services. I do, even though I realize I ended up paying a lot per DVD with netflix. (When I used it, I used it a lot, but disks did/do sit around for a while.)
BTW, they originally were 4 discs/month for $16... Which was still as cheap if not cheaper than brick & mortar stores, and of course they mailed the discs to you. Then I think they started rolling over unused rentals to the next month.. then they went unlimited.
I've dumped Dish primarily because I only wanted 2 cable channels. SyFi & Comedy Central. For the latter, All I wanted was South Park, and they publish the eps the day after on their own website. Syfy use to publish their good shows the day after too, then a month after, now only when the season is finished and they're cancelling the shows I watch for their wrestling and Reality Ghost shows drek. It seems that off-the-air networks have no problem publishing on HULU. I suppose it's because they don't really have to worry about distribution via cable because they own their own transmission towers. Anyway, I was interested in Blockbuster and Netflix online content, but I'd like to know what they have available *BEFORE* I sign the dotted line or set my eMail up for permanent spam by asking for a peek. They don't make any list available. That's a disservice to everyone. It's like telling someone there's a tasty apple in this box if you'll buy it before you see it. There are other web-sites that publish their list, but *REALLY* !!!! Netflix should make this available before submitting your name for harrassment. Entertainment in general is going down the tubes because greed is out-weighing art. Always seems to have been the case. Think it always will........
See, I just don't get this. I use the streaming every day. What exactly are all of you people who have this opinion trying to watch?
"We live as though the world were as it should be, to show it what it can be." - Joss Whedon via Angel
my brother uses netflix all the time but only uses streaming because the mail takes a lot more time. it's my thought that most people either use streaming exclusively because the mail is slow or mail in/out DVDs because their internet connection is too slow. if this is the case, people are actually save $2 by sacrificing something they dont use.
yes, i know a bunch of people will be duped into the package deal of both streaming and DVDs (in the same way they do with cable TV/internet/VoIP package) but anyone that actually cares about saving money will probably save $2 with this new pricing scheme.
i understand the kneejerk reaction of anger to losing the ability to have both mail and streaming services but do many netflix users actually use both? (yes, i know some people do and you feel the need to express that you do in an angry reply.)
Anons need not reply. Questions end with a question mark.
We are in the same boat. I'm thinking about dropping the CD service, since we stream the large majority of our content from Netflix.
Starz going away isn't a killer, but it hurts. Better Watch Toy Story III while we still can!
I wish Netflix would go to a Streaming/2DVD per month package for like $12/month. We only use the mailers to get the most obscure content that Netflix only seems to carry (we have "The Mask of Zorro" with Errol Flynn right now).
Usually takes two weeks to get the family together to watch a DVD, especially during a school year. A package that limited the number of 90 postage charges Netflix got per month to two might hold subscribers and preserve their bottom line.
Fundamentalism is a crime against humanity
Compare this to Netflix. Call them up and tell them you have a damaged DVD. They will ask for your account details, look you up to confirm that this isn't something that happens often (I presume), then apologize and offer to send out another copy immediately.
s/???/Switch Again/
Shhhhh. Don't tell. :)