A Simple Question (With Recap): Netflix Price Change

Twitter exploded a few times yesterday with some pretty big news events: Microsoft’s World Partner Conference, EA acquiring PopCap Games and Netflix changing their pricing structure.  I’ll focus this week on the last item.  I’ve always been in the relative minority that Netflix was pretty heavily underpriced for what they offer.  I’m all for a good deal, but I’ve been taught to be wary of things that seem too good to be true.  It seems this has come to fruition, as Netflix quietly changed their prices today.  You won’t see it anywhere on their front page, but if you do a little digging, and expand the FAQ on the questions “How much does it cost?” and “Can I get DVDs by mail from Netflix?” you will see that the former $9.99 bundle is now separate: $7.99 for streaming, $7.99 for unlimited (1 at a time) by mail.  This pricing change is in effect for new customers now, and will go in effect for current customers in September.  While there was an uproar from the public about this, I was left wondering if anyone out there felt this was actually an appropriate price hike.  It begs the question:

Do you agree with Netflix’s decision to effectively raise the price of their bundle?

(You may have to refresh the page to see the poll)

Note that I say “Do you agree..,” not “Do you like..”  No one likes it when a subscription they have jumps 60% in price, but do you feel you’re now paying fair market price for what you get? Allegedly, the increase has a lot to do with the cost of acquiring licensing for streaming movies, which is expected to jump in cost considerably in 2012 for Netflix.  Personally, I was never a huge fan of the selection of streaming movies on Netflix, so if I was a subscriber, I’d probably just stick with DVDs by mail. I do, however, think that this price change puts the offering in line with the value.  $15.98 is still cheaper than going to the movies.   But with rivals Blockbuster, Amazon and others in the marketplace, offering similar (if not better in some cases) selection for a lower price, this move may finally cause Netflix to cede the consistent growth they’ve shown over the years.

This is a recap week, where we visit some polls from weeks prior, and put the results up:

Platform Playing Habits [9 total votes] (Do you spend majority of your time (80%+) on one gaming platform?): 88.9% of respondents said Yes 

Gaming Related Charities [7 total votes] (Have you donated your time or money to a gaming related charity?): 57.1% said Both, 28.6% said Money, 14.3% said Neither

Online Purchases [7 total votes] (Will your online spending habits change as a result of the PSN fiasco?): 100% said No

Welcome Back [46 total votes] ( Do you feel that Sony’s compensation in the Welcome Back program is satisfactory?): 63% said Yes

E3 Stakes [127 votes] (Of the Big 3 gaming companies, which one most needs the best showing at E3?): 48.8% felt Sony needed it most, 41.7% said Nintendo, 9.4% said Microsoft.

Wii U [26 votes] (Will you be purchasing the Wii U?): 65.4% of you said Yes

Duke Nukem Forever – Revisited [31 votes] (Will you (or did you) buy Duke Nukem Forever at full price?): 61.3% said No

Keep an eye out in #PNASQ on Monday when I’ll pose next week’s question. Want to sound off? Vote above, and comment below!

A Simple Question (ASQ) is a weekly segment for Platform Nation. Each week on Monday, I’ll ask a question on Twitter at #PNASQ. Give a response and let the world know what you think; there is no right or wrong answer here. If you have a suggestion for a question, hit me up on twitter @vttym.

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  • I follow, it’s a great site that talks about all the stuff going on behind the scenes over at Netflix, rumors about it and it lets me know of any new deals.  Maybe because of that and the fact that I’ve seen everything that Netflix has added over the past several months, or the fact that I use Netflix literally every single day (I’m a cord cutter), but I have no issues with the price increase, or really a splitting off of two services (because really that’s what they are doing).  They now have a streaming service, a DVD service, or a plan that you get both.

    For $8 a month I can get access to watch everything in their library on any device I own? (PS3, 360, Wii, iPad, iPhone or my Macs)  That’s a steal.  Just yesterday I spent $34 dollars to watch Zoo Keeper with the family (I lied about my daughters age so she could get in free), and they I bought a combo of a popcorn and a pop.  Oh, and these were their matinee prices.  $34 dollars for a kids movie and snacks.  (side note, I might have went theater hopping and I might have snuck into another movie after ours was over because I honestly was a little angry at the price, plus I really wanted to see Horrible Bosses).  I also don’t care to be apart of their DVD plan, I just don’t mail them in.  

    So now with this new rate increase, I switched my plan up, cut off the part of it I didn’t use, and now I’m saving money and I have access to more movies because of their recent licensing deals, that sounds like a win to me. (And even if I kept their new plan, how is $15 a month not worth unlimited steaming commercial free movies and DVD’s mailed to your house?)

  • Jeremy LaMont

    I voted that I “agree”, but I think what I mean is that I “understand.”

    I don’t expect Netflix to bear the brunt of changes in their licensing structure. It would probably put them out of business, and the service would cease to exist.

    “Pachter predicts Netflix’s streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012.”

    Whether or not you AGREE with the cost increase is irrelevant. It will happen because Netflix essentially has no choice. Ultimately everyone just has to decide if it’s enough of a problem to go beyond griping about it on the internet to cancel or change their service.  I’m keeping mine, for now, with the cost increase.

    • I agree 🙂 .. it was difficult to phrase the question without turning it into a “do you like it?” kind of question – no one will like it.. but understand may be a better way of putting it.  I’m actually surprised as many people are accepting of this change.. guess I wasn’t the only one who felt this way.

  • Zenophor

    I’ve been a subscriber for many a year and they’ve offered less and less service over the years with one exception, instant streaming.

    They stopped selling used DVDs in a deal made with Wal-Mart
    They removed the “Friends” feature which allowed you to view a friends queue and make and receive suggestions
    Netflix had a hand in killing HD DVD
    They ceased customer service by email
    They made a deal with Warner Bros to hold new releases for 30 days
    And they’ve been raising rates little by little over the course of several years. Constantly charging me more and more for Blu-ray while carrying less and less.

    Now we have a 60% price hike? Can Netflix really not make it work on the current price model? I don’t see this as Netflix trying to even out the price plan. I see this as getting greedy cause the competition is slim. As a business why piss off 65% of your customers (referencing the poll)? If 50% of customers leave, Netflix is no better off than before the price change.

    A lot of people are assuming the extra money will provide more Blu-ray or a larger catalog to movies to stream, but Netflix has said nothing of the sort. If Netflix was going to provide better service for the added cost why keep it a secret?! I think people that accept the new price plan banking on better service are going to be disappointed.

    Some people are blaming the movie industry saying that Netflix is just as much a victim. Netflix is a big company and they buy a lot of movies. If they are getting pushed around by movie companies they need to grow some serious balls. I would rather Netflix no longer carry Warner Bros movies than to do the disservice that they did. I might be a little disappointed but I’d respect the decision.

    Those of you thinking you’ll see new releases available for instant watch sooner. You’re fooling yourselves.