Tuesday, July 12, 2011

Netflix News: Major Price Increase

The big news for film fans today is that Netflix has announced major changes to its plans today, including a significant price increase.

Netflix has now split the pricing for DVDs and instant streaming into two different plans, where previously they have been combined. The effect, for those who currently subscribe for one DVD at a time, is approximately a 60% cost increase.

Those who have the simplest DVD plan, one DVD at a time plus streaming, have currently been paying $9.99 plus tax. To maintain the same level of service, a subscriber would need to subscribe to get one DVD at a time for $7.99 and then subscribe to the streaming plan for an additional $7.99. That comes to $15.98, totaling over $17.20 with tax here in California.

The changes take effect September 1st.

Based on wording at my account on the Netflix website, it looks as though initially DVD subscribers will be charged for two plans next month: "The price of your Unlimited Streaming + 1 DVD out at-a-time (Unlimited) plan will change to $15.98 (plus any applicable tax) a month starting with your next billing period on or after Sep 01, 2011."

Those who wish to cut back will need to take the initiative to do so by clicking on "Your Account" and then "Change Plan."

There's lots of discussion about this change at Hacking Netflix.

Update: Here's thoughts from Jennifer Garlen.

Late Update: Cliff has very interesting comments at Immortal Ephemera. I think he's right, I'm surprised Netflix isn't offering some kind of discounted combination plan -- it would take the sting out of what is otherwise a 60% increase, before factoring in the additional taxes.

Every business raises prices at some point, but this huge increase combined with recently declining customer service doesn't quite sit right. For instance, how about Netflix recently making all customer reviews anonymous, what was that all about? Then there's the ever-growing number of worn-out DVDs they're neglecting to replace...are they really recommitting to their DVD mail service? I guess we'll find out the answer to that if unavailable "Saved" titles start moving back into the queue. Or if they don't.

Wednesday Update: Stacia comments on the price increase at She Blogged By Night.

Update: There's more information and analysis from the Los Angeles Times.

Diane shares the angst of a longtime subscriber at Classic Movie Blog.

I also agree with a comment in this Washington Post story: why did I get the official email from Netflix a full business day after learning the news elsewhere?

Wednesday Evening Update: Many thanks to my friend Jill for sending links to a commentary from Consumer Reports and an accompanying chart comparing Netflix with other options.

Update: Netflix asserts the company was prepared for the backlash and accepts it: "These are our prices."

Thursday Update: More on why Netflix raised its prices in such a startling fashion from the New York Times. It's clear as mud.

Netflix asserts there's a silent majority who think the new price is "a good value."

11 Comments:

Blogger Raquelle said...

This is so frustrating especially since the Streaming selections are quite pitiful. Even some contemporary movies I love (released within the last 2 years) are not available on Netflix instant streaming. With none of the Warner Archive or I'm guessing most of the MOD titles on there and with Criterion pulling all there titles from streaming, the classic film list on there isn't going to grow all that much.

I've been with Netflix since 2000 and they've been such a great company until this streaming business. I even remember when they lowered their prices! Ahh well. All good things come to an end I suppose.

While it's not perfect, I'm at least glad for services like Classicflix. I've been a member there as well as for a while.

Thanks again for providing us with very useful and timely information Laura!

1:40 PM  
Blogger Robby Cress said...

I can't believe the major price hike, but I saw this coming for a while. It seems Netflix is really trying to push people away from the dvd service and to go exclusively with streaming, but like Raquelle mentioned, for classic movie lovers, the streaming choices are much more limited than what is available on dvd. I hope more of the classics make their way to streaming, but I doubt we'll see much change on that.

The other thing that has annoyed me lately, is that many of the dvds I've had in my queue have dropped out and become unavailable. I assume this is because Netflix doesn't want to bother to replace possibly missing or damaged discs for certain movies?

It will be interesting to see how Netflix competitors play to the Netfilx price hikes? Maybe some of the competitors will try to pick off some Netflix subscribers.

1:54 PM  
Blogger Laura said...

Thanks for sharing your feedback, Raquelle, and I'm glad I can provide the information, although unfortunately today's news isn't so good for those of us who are Netflix subscribers!

That's really impressive you've been a Netflix subscriber since 2000. We've only subscribed since 2007.

One of the issues I've been running into with Netflix is that as Netflix loses discs on certain classic era titles, they're not being replaced. I now have quite a long list of films which used to be in the DVD queue and have moved to "saved," and it looks as though they may be stuck there permanently, yet they're not available via streaming.

I do have a long list of classic-era films in my Instant queue, but they tend to be the lesser-known films, including British titles, which I enjoy seeking out.

It's interesting, I remember we discussed in the past whether Netflix was going to get out of the DVD business, but they seem to have recommitted to that end of the business this year. Yet at the same time there is this unfortunate pricing decision, at a time when so many of us are pinching pennies.

Thanks for your feedback on Classicflix, I haven't tried them. Since they seem to carry a lot of the MOD DVDs, which is where classic releases are generally coming from these days, it's a very interesting alternative for classic film fans.

Best wishes,
Laura

1:58 PM  
Blogger Laura said...

Robby, I think I was typing my response to Raquelle while you were typing your comment! As you can see, I've got the exact same problem of late -- too many discs in my Netflix queue are now unavailable and aren't being replaced. Particularly with this new pricing structure, I think that's a customer service issue Netflix needs to begin addressing.

I wonder if Amazon will be stepping up their streaming situation more? There are a lot of relatively obscure movies of interest to me at Amazon, which is a nice "add-on" since I'm an Amazon Prime subscriber already, but if they were to get serious about adding a lot more mainstream-type titles, that's one competitor which might pick up some Netflix business, at least if they don't up the price. At $79 a year, Amazon Prime comes to roughly $6.50 a month for *both* streaming and 2-day shipping of most purchases.

Best wishes,
Laura

2:07 PM  
Blogger Mythical Monkey said...

As someone blogging mostly about silent movies, I'll definitely be sticking with the dvd option. Not sure about the streaming -- as you say, for a classic film buff, the choices are pretty poor.

2:11 PM  
Blogger Carrie said...

I hope Amazon Prime whomps Netflix.

5:24 PM  
Blogger JCG said...

Thanks for the link, Laura! I know this news is causing concern for classic film fans everywhere. Hopefully Netflix will show some interest in our audience and improve its streaming catalog.

6:59 PM  
Blogger Missy said...

Well, phooey on Netflix! I'm seriously considering dropping the service entirely as a reflection of my irritation. However, will wait to see how Apple, Hulu, and others respond and then will make a decision.

7:33 PM  
Blogger DKoren said...

Shoot. Disappointing to hear this. I like both, as there are things only available on DVD and things only available streaming. I've also had the problem of films dropping into the "saved" category, which is frustrating. But then again, $17 is a lot cheaper than cable or satellite tv, so I'll probably end up sticking with it for now. I'd really like a limited streaming cost (like 5 movies a month or something), for less money, as I don't watch enough to make it worthwhile to have unlimited. Just not enough time in the day.

11:40 PM  
Blogger Elisabeth said...

Ouch. We just re-activated our dormant Netflix account for summer vacation because I wanted to see a certain TV show available in streaming, but my family in general are more interested in what's available on DVD. This new system is basically making anybody who doesn't want to spend that much money choose between the two.

6:36 AM  
Blogger heather said...

Netflix isn't offering a discounted plan for those who want both because they specifically want to push people away from discs and towards streaming, which is the much cheaper-to-deliver option for them. I think it's hard to see here in the film blog community, because most of us value selection over instant gratification, so most of us--if forced to choose--would opt for discs over streaming. But among casual movie-watchers, the opposite is true. Most people I know (especially those who are under 30) are planning on cutting down to streaming-only, and plan on supplementing that with Redbox when necessary. And that's what Netflix wants. By not offering a discounted price for combined plans, it benefits Netflix in two ways: more subscribers will switch to streaming-only, which is cheaper for them, and the exodus of those folks from the disc-watching world means that availability will increase--without requiring Netflix to spend a single extra dime on purchasing more DVDs--for those who do opt to stick with the discs.

I actually think classic film fans are in a better place to weather this than most, since Netflix was more peripheral to our movie-watching than with a lot of fans, and we do have so many other options (TCM, Classicflix, etc.). I'm not thrilled with the price hike, but as the NYT article ultimately concedes, it's still a pretty good value even though I'm being forced to pay several dollars more, and there's nothing else comparable. (Not to mention that dropping Netflix would mean having to start my 400-some-movie queue all over again somewhere else! Haha.)

2:31 PM  

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