An Open Letter to Netflix

Dear Netflix,

Did you hear something?  If you think you heard some cheering off in the distance, that was the sound of Blockbuster employees and independent video store owners everywhere cheering with delight when you announced your outright stupid new pricing plans today.

But those are probably the only people rejoicing at this news.  By far, the overwhelming consensus I’ve seen from customers has been, “What the *#@! do you think you’re doing?”  I’d say that’s a legitimate question.  Are you trying to help Blockbuster make a comeback?  Did you think you were becoming too successful and thought you would be better off with a few thousand fewer customers?  If any of those were your goals, then congratulations.  Because another common reaction I’ve seen has been, “I got along without Netflix before and I would be willing to do it again.”

But there are a few other pressing questions at hand here.  First of all, what was the line of thought that made you think you could raise the price of an unlimited streaming plus one physical disc at a time package by 60% and not get an overwhelmingly negative response?  And most importantly, where do you get off charging the exact same amount for access to a limited amount of streaming titles as you do for access to a much greater amount of titles on physical DVD?  That’s like going to a restaurant and being told that you can have all the soup you can eat for the same price of a meal that includes soup, salad, an entrée, a side dish, and dessert.  I suppose you might argue that you’re paying for the convenience of being able watch things instantly, but the convenience of being able to watch a limited amount of titles with a degradation in picture quality that comes with streaming video isn’t worth that much.  The only way this idea would be fair would be to make every single title you have on physical DVD also available for streaming.  And I know that won’t be happening.

I’d also really like to know why you think it’s appropriate to charge people who want to keep their unlimited streaming plus one physical disc at a time plan $15.98 per month.  You explain that you arrived at this price by adding $7.99 for an unlimited streaming account and $7.99 for a one disc at a time, unlimited discs per month account.  No.  Just no.  This is outrageous and let me explain why since apparently you don’t get it.  You do realize, don’t you, that there’s overlap between movies that are available for streaming and movies that you have available on DVD.  Are that many people really getting a physical DVD and then watching the exact same movie through Watch Instantly that same month that you can honestly justify charging them twice for access to the same movie?  I doubt it.

Your blatantly idiotic pricing plans particularly hurts the dedicated cinephiles who depend on Netflix for access to classic, foreign, art house, and generally offbeat movies that they just can’t find at their local Blockbuster (if they even have a local Blockbuster anymore) or library.  There’s always Turner Classic Movies, but as wonderful as that is, they can’t possibly show everything.  And what about the people who don’t have cable and therefore aren’t able to watch Turner Classic Movies?  Netflix was by far the best mainstream rental service for those types of movies and now many of them are considering cancelling your service.  Are you trying to encourage people to sign up for Classic Flix or resort to Internet piracy?  Again, if this was your intent, congratulations.

Clearly, all the reports I’ve heard recently about people dropping cable and using only your streaming services have gone to your head and you think you can get away with this.  Which raises one more vital question — just how stupid do you think people are?  If you sincerely thought that there wouldn’t be a lot of outrage over this, you are clearly delusional.  I have a feeling you’re about to realize that you’re not as great as you think you are.

Sincerely,

Angela from The Hollywood Revue

Advertisements

22 comments

  1. I always kinda thought netflix was too good to be true. This along with the news that parts of Canada is changing from flat fee internet billing to usage based billing (http://arstechnica.com/tech-policy/news/2011/01/canada-gets-first-bitter-dose-of-metered-internet-billing.ars) is terrifying. If they ever changed to usage based billing for internet in the US I’m not sure what I’d do. I’d really have to change my habits, I don’t think i’d be able to afford cable OR internet streaming at all.

  2. Different perspective. I think it’s great. I don’t want mobile and internet access for videos because of the kids. (Which they do already have, but I don’t need one more layer to monitor.) So limiting to disks is great. Obviously there is a market for such. However, for current subscribers (which I am not for above reasons) it is understood that they’ll be paying more for the for the same service that they now receive. A price increase is never welcome.

    1. Except people aren’t mad that there’s a disc only plan available now. People probably wouldn’t even be this mad if they had only raised the price of a streaming plus one disc at a time plan by a couple bucks a month. But a 60% price hike isn’t a couple of bucks and it’s the gall Netflix has to raise the price that much that has people outraged.

      1. You’ve hit the nail right on the head Angela. I’m also annoyed at the fact that I found out about this through a 3rd party and not directly from Netflix (they just sent me an e-mail about it an hour ago, six hours AFTER I found out from someone else -_-).

        1. When I mentioned this on Facebook, one of my friends commented that she called Netflix and she was told that they’ve been planning this since January, but the news wasn’t supposed to be released on the Internet this soon. Which makes me wonder just when were they planning to announce this. Were they going to wait until August 31st and hope nobody would notice? The fact that the official e-mails didn’t go out until so many hours after the news was all over the Internet definitely made me think that people at Netflix were saying, “Uh-oh, we better get some e-mails out fast.”

  3. Same thing that happened to Raquel happened to me. I heard about the price increase via a third party on Twitter. I JUST received my email. I immediately lowered my plan to streaming only. And if the selection doesn’t improve, I will cancel altogether. A 60% increase is absolutely unacceptable and completely disrespectful to the consumer.

    Angela, you hit the nail on the head with this one. Ridiculous!

    1. It’s unbelievable how badly this was handled. I can’t believe it took them this long to get e-mail notices out to customers, that is so unprofessional.

      Even though $16 a month for the one disc plus streaming plan doesn’t sound ridiculous on the surface, that difference adds up to more than $70 extra a year. And if you want two or three discs out at a time, then it’s even worse. This would have been so different if they had only raised it a dollar or two a month, but this is nuts.

  4. It’s not really Netflix’s fault. Movie and television licensing fees for streaming content are going up because the studios have realized that it’s so popular and that they CAN demand more–so what Netflix pays for streaming content will pretty much double between this year and next. Clearly they have to make up the difference somewhere. It’s a complicated cycle because increased internet piracy leads to the studios trying to make more money elsewhere, which leads to higher licensing fees, which leads to people not wanting to pay those licensing fees and looking for other sources for their TV and movies, which leads to increased internet piracy . . .

    Still, though, Netflix probably should have included that little fact in their letter; I think it would have deflected a lot of the anger and annoyance that is currently aimed in their direction. But I think it’s important to note that this move wasn’t out of sheer greed or cockiness, and the extra money you pay won’t end up in Netflix’s pocket–it’ll end up in the studios’.

    1. I’d say that would make sense if they raised the price of a streaming only plan, since they’re the ones creating the demand for such high licensing fees, but they already had a streaming only plan and the price of that didn’t change. It seems to me that most people are outraged at the cost of continuing to get both services. Say someone mostly watches streaming content, but occasionally wants to watch something that isn’t available through streaming, getting maybe one disc a month. Charging them an extra $7.99 for the privilege of being able to get that disc every now and then is simply highway robbery. I’d say that extra little benefit is worth at most an extra $2-$3 a month.

      1. I think it’s important to realize that postage has gone up enough in recent years that Netflix has been making next to nothing off people who actually use their disc accounts regularly. For “power users” (those who immediately watch a film once it arrives in their mailbox, immediately send it back, etc), they just barely break even. Netflix was willing to cover that because it could make so much in pure profit off streaming-only (and of course, off of users like me who still have Christmas in Connecticut hanging around from December), and the more videos they made available for streaming, the fewer actual discs people used. Now that they need to pay more for streaming, they’re not making enough off of those accounts to float the disc-users anymore. Disc users should be paying more (and I say this as somebody who inexplicably still has a three-disc account even though most of what I watch these days is recorded off of TCM)–no one seems to be able to put a finger on the exact amount of money Netflix pays to ship each disc, but almost everybody agrees that there’s no way it could be less than sixty cents round-trip.

        1. I’m aware that postage has gone up in recent years, but you also have to account for the fact that I’m sure Netflix gets some sort of break in pricing for how much stuff they send out. How much that is exactly, I don’t know. But let’s take “power users” out of the equation, because I don’t think they represent the average user. What about the people who occasionally use the disc service for the things not available on streaming and they’re averaging one or two discs a month. Are they seriously spending that much on postage that they need to charge $8 a month to cover the postage for people who get one or two DVDs a month?

          And it still doesn’t justify the cost of charging the full price of two packages for people who want both services. As I said, there’s a great deal of overlap between what’s available for streaming and what’s available on DVD. Charging full price for both means you are being charged twice to be able to watch some of the same movies. Someone who gets a DVD of All About Eve isn’t going to turn around and watch it through Watch Instantly and it makes no sense to charge them like they would. A bundled plan of around $12 a month would be a lot fairer.

  5. Netflix was already working my last nerve by removing user reviews, letting disks run out and never restocking them, bad quality on their streaming about 25% of the time, lack of streaming films in the genres I want to watch, etc. I think you are spot on in your analysis here, and I agree Netflix really screwed up with this.

    I’m also getting the “Netflix is great and savvy and brilliant” comments on my blog in response to my dislike of this enormous price hike for the service. Isn’t that odd? Most people I know are irritated, yet half the commenters at SBBN are praising Netflix. I saw the exact same thing last week when some tech blogs announced the new Google toolbar at the top of blogs. Dozens of comments saying “Google is great and savvy and brilliant,” yet on Google Help there were hundreds of complaints. It just makes me wonder.

    1. I think this news was really the straw that broke the camel’s back for a lot of people. I know a lot of people who have been unhappy with Netflix lately because of their removal of user reviews, poor customer service, lack of streaming content, and constantly being sent scratched and damaged discs. Raising prices this much on top of all that has made it an easy choice for a lot of people to say farewell to Netflix.

      And unless Netflix is planning to step up their streaming content big time by either offering significantly more content, captioning, or bonus features, I don’t see what is so savvy about this move. Unless they think Netflix was savvy by virtually eliminating brick-and-mortar video stores, creating a service that could work as a viable alternative to cable, then being able to hike prices by 60% and get away with it knowing that a lot of people will stay because they have no other place to rent movies or will figure it’s still cheaper than cable. I really think they’ve not only left the door wide open for a competitor to step in, they’ve practically sent out an invitation. With so many disenfranchised Netflix customers right now, this might be a good time for another service like Hulu Plus to step up their game.

  6. Brava! I was pretty pissed receiving that email this week about my plan price going up yet again since I do the one disc at a time and watch instantly. They recently raised that plan’s price by a couple dollars already. I’m glad I have until September to decide what to do but Netflix really needs to take another look. Essentially there is no plan now that combines streaming and discs. You have to pay for two plans. Thanks for writing this up. I hope Netflix reads it and gets their heads on straight.

    1. On the plus side, at least you got an e-mail. It’s appalling that they didn’t send out e-mail notices until several hours after it was all over the Internet. I’ve heard some people say they still haven’t gotten an e-mail from them.

  7. I think we all made the mistake of confusing Netflix with a force of positive change. They have shown themselves to just be another company.

    I’m sure plenty would love to have just an unlimited streaming option if even 80%-90% of the content on DVDs were available. I’m sure the hearing imparied and British accent imparied would love just an unlimited streaming option if the subtitle availability matched the DVDs and actually worked. I would love just unlimited streaming, but my ISP tells me that bits are a scarce resource so I can’t exceed 250 GB in a month. That’s something easy to exceed with just an unlimited streaming plan.

    This is a lousy push off the working roads to force us down one that is still under construction.

    1. “This is a lousy push off the working roads to force us down one that is still under construction.”

      You really hit the nail on the head with that one sentence.

Comments are closed.