On Tuesday Netflix announced a new pricing scheme, and it sent its customers into an uproar. Netflix has decided to step away from their current blended service and set up two distinct services of streaming and physical discs by mail. Netflix is taking a lot of heat for this desicsion, one I am sure was well thought out by the streaming giant, but to keep both streaming and a dvd, you are going from a $10 a month plan to a $16 a month plan. Each individual service will be $8 a month, which is the same as their current streaming only option.
Now in our household we are avid Netflix users, we stream constantly, and although we pay for the DVDs by mail as well, I don’t think we have sent back our current DVD in the last 4 months, so for us it’s an easy choice of going to streaming only. Many people don’t think the choice is as easy, or that they should have to choose at all. When Netflix started, it was all DVD by mail, and they slowly added the streaming service, and as they have grown they have added more and more choices to the instant stream, although new releases still take a while to show up there. Instant streaming was an added bonus for being a member, not thought of as the main way to take in content. This has gained more and more popularity over time, much of this added by the convenience, Netflix has put itself on every gadget that connects to your TV, and at this point it has started coming on some TV’s, it has grown so much that it has become the number one source of Internet traffic in North America specially as many use a VPN service like Cubik. We were all spoiled by this, the amazing price and amount of content, between both streaming and DVD’s, was amazing, but now that we have had it at this price we don’t want to have to pay more or give up either service.
So why would Netflix do this to their millions of customers? Most people just immediately think it is out of greed, wanting to get more money from all those faithful viewers who have been taking the streaming service for granted. I don’t think that this is really the case, I think they actually want to push people away from the physical DVD’s. Mailing out all of those red envelops takes a lot of money to keep going, from postal fees to have having people working in physical locations all costs more money, but it also costs a lot of money to keep the streaming customers happy, and to get more and better movies. Right now the studios hold all the power with the license rights. So the less they can spend on mailing out DVD’s the more they can spend on getting rights to give users access to a larger selection of movies. Another reason is that some deals only allow a certain number of users to stream their content, this is actually the reason a number of Sony movies recently vanished from the stream, Netflix has a deal with Starz to get all of their content, but in Sony’s deal with Starz it gives only a certain number of people the ability to stream these movies. Now that Netflix is included in that number they went over their cap. So Netflix is pushing those customers that don’t even use the streaming service to choose only DVD’s so that the total number of users will drop and some of this content will make a return.
Honestly I kind of have to side with Netflix on this one, they honestly want to make their service better for everyone, but this will be a real test of how much their customers will stick with them. Everyone is making a big deal out of a 60% price increase, which although the figure is a true one, we are only talking about $6, which isn’t that much. Combine that figure with a mob mentality of Americans who want everything for nothing and you have a near revolt on your hands. The current Netflix pricing plan was an amazing deal, and we were all spoiled by it, but the new prices are still good deals, sure there are some competitors but none with the same reach and convenience that Netflix has given us. I really think they are heading in the right direction, but this is going to be the biggest test they face to make the transition, more sooner than later everything will be streaming, I just hope they live through this to see it become reality.
Let us know what you think, will you be leaving the service behind? Just streaming or sticking to DVD’s?
