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Hi there economy, have you met my friend Netflix?

July 16, 2011

So, I’m sure most of you Netflixers out there have heard about the new pricing increases starting on September 1st for current members & immediately for new customers. I really wasn’t surprised by the news of an increase, but I was surprised by the reaction of subscribers. I have been a Netflix subscriber & supporter for quite some time now. Let me give you a little background on my experience in the movie rental biz.

Back in 2004, I was renting from movies from Blockbuster & Hollywood Video, I even used to buy used DVDs fairly often. Then one day I found out about this new rental-by-mail company called Netflix. It was free for 1 month, so I joined up. I liked it fairly well, but being a new & small company, I didn’t like the wait time between movies. Back then if I rented a movie, watched it the day I got it & sent it back the next day, I could still only rent about 1 DVD per week. Then came Blockbuster’s answer to Netflix.

Blockbuster started their own rental-by-mail & then a rental-by-mail that also included in store rentals. I cancelled Netflix & joined up with Blockbuster. After about 2 months, I cancelled that & switched back to Netflix. Blockbuster was even slower & the availability of DVDs by mail was laughable.

So, after a short break I was back to Netflix, where I have been a subscriber since February 2005. Since then, Netflix has put DVD collection centers all over the US. Decreasing the time it takes to get a movie & speeding up the process. All these improvements while not changing prices that much more over the years. (for most plans) A few years ago, they introduced the option to stream movies over the internet. When that started, you could stream 1 hour per dollar you spent on your plan per month. After a while of that, they changed all plans from the dollar limit streaming to unlimited streaming.

Now for the new Netflix prices. Netflix did just have an increase that started in December 2010.  For the 1-2 DVD plans that increase was only $1 & they introduced their 1st streaming only plan for $8. I have created a chart to help out & listed that pricing increase in late 2010 on my chart as “OLD 2011 PLAN.” I have also included the older prices before the late 2010 increase as “OLD 2010 PLAN.”

NETFLIX

OLD  2010 PLAN (w/ unlimited streaming)

OLD  2011 PLAN (w/ unlimited streaming)

NEW PLAN (w/out streaming)

NEW PLAN (w/ unlimited streaming)

Unlimited Streaming only

N/A

$8

N/A

$8

1 DVD*( limited plan per month)

$8* (limit 4)

$5* (limit 2)

$5* (limit 2 dvds & 2 hrs of streaming)

$5* (limit 2 dvds & 2 hrs of streaming)

1 DVD at a time

$9

$10

$8

$16

2 DVDs at a time

$14

$15

$12

$20

3 DVDs at a time

$17

$20

$16

$24

*unlimited streaming not available

-Prices are per month, for simplicity I have rounded all the prices up to the nearest dollar. (does not include taxes)

Basically, Netflix has separated pricing on the streaming & DVD plans. If you want unlimited streaming & DVDs, it is $8 for streaming on top of their new DVD prices. The biggest jump was in their 1 DVD & Streaming plan that is going from $10 to $16. A 60% increase. This is what angered most people.  My current plan of 2 DVDs & unlimited streaming will be changing from $15 to $20, a 33% increase. Since I’m a “numbers guy” I crunched some numbers for this year on my Netflix rental activity.

As I stated above, I have the 2 DVD plan with unlimited streaming. My average rentals for the 1st half of 2011 is:

8 DVDs rented per month & 2-3 movies streamed per month.

With these new prices by Netflix, it would be smarter for me to switch to 3 DVDs at a time & cancel the streaming service. 3 DVDs with out streaming would run me $16 per month. I could rent every DVD on my instant streaming Queue & just have them mailed instead. This would increase my subscription service by only $1 and my number of rentals would stay the same.

With all that in mind, I can still rent my 10-11 movies per month at $16 + tax. At 10 rentals per month, that is still only $1.60 + tax per rental. You find me a better selection or a better deal.* (official hipster challenge)

Everyone is different & you have to decide what plan best suits you. I don’t feel that cancelling Netflix all together is the answer. For some of you it might be, but for me, there isn’t a better alternative out there. You just need to look at their new plan options & decide just as I have, if you want to change your existing plan to get the most for your money.

The only cheaper alternative is RedBox rentals, $1 per day. But I have always found their selection to be very limited. I have never found a movie at a Redbox that I hadn’t already seen or actually wanted to watch. You could also sign up for a movie package, such as HBO, with your cable. That usually runs you $13-$15 per month, and you only get to watch whatever they show. Neither of these options appeal to me. There are also other online rental services out there, but none of them even come close to Netflix. There have been plenty of posts online in the past few days for “alternatives to Netflix.” I didn’t find anything on the 4-5 of those I read that would be a good alternative.

Right now I have Direct TV, which I don’t really watch much. I plan on cancelling cable all together (again) this fall when my contract is up.  I have also recently tried HULU Plus this year, for $8 per month. This gives you access to more shows & you can watch all of the episodes available. Instead of regular HULU, where they only allow you access to the last 4 aired episodes of a show.

I thought that having Netflix & HULU Plus would be a good way to cut down the cable bill. That was the plan until I used HULU Plus last week. When I pulled up HULU Plus on my PS3, many of my subscribed shows were not available for me to watch on there & said “Web Only.” I didn’t see the point of only having access on the web to shows I was paying $8 a month to access on my TV. So with that reason & me not really watching it very much, I have cancelled HULU Plus. Direct TV is next to go. But Netflix will be staying around for a long time, unless something better ever arrives. Right now, Netflix is still king.

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4 Comments leave one →
  1. July 16, 2011 1:16 pm

    For me, the 60% increase is a bit ridiculous. I have been a member since December 2010 and i have to say that the one dvd (unlimited) plan was amazing. I still have movies in my queue that have been there since day one. But come Sept 1st i will be going to streaming only. Sure it sucks, but i have been contemplating it for quite some time. I only use the dvds for movies i MUST see. I use streaming every day, mostly for tv shows but i honestly feel like the instant selection will increase but if not, oh well. I can always change my plan if i decide the dvds are a must haha

    • cooper417 permalink*
      July 16, 2011 1:39 pm

      My opinion is that it has been a steal to have unlimited streaming and 1 DVD at a time for $10. I can see how that sucks to go from $10 to $16, but I still think that price is a good deal. It just depends on how much you stream & if there are movies you MUST see & aren’t available on streaming. I think most people use the streaming a lot more than I do. But most stuff I want to see isn’t available to stream. The streaming selection is always changing, but that makes up only a small % of Netflix’s total DVD selection. I have never found a movie that is on streaming that isn’t available to get by mail. I will just be adding all the movies from my instant queue to my regular queue.
      At $8 for 1 DVD at a time, you could easily rent 4-6 movies a month. That is still a bargain when you consider the selection & the fact they are delivered right to your door.
      I think $8 for UNLIMITED streaming is still a good price as well.
      I saw some probably inaccurate figures that up to 40% of Netflix customers are planning on cancelling their subscriptions all together because of this pricing change. I bet if any of them keep track of what they spend on rentals after cancelling that they will find out Netflix is still cheaper option. Their selection wins by a huge margin already.

  2. Herbold permalink
    July 17, 2011 11:58 am

    Netflix is still king….I will gladly pay 16 bucks since I killed my Dish. Over the air Tivo AppleTV Netflix can’t be beat.

  3. July 22, 2011 1:44 pm

    If you want more streaming options from Netflix, they have to increase their fees. It’s still better than blockbuster can ever offer. The reality is where are you going to go? Amazon Prime is limited. Redbox is new releases only to be honest. One option is Apple with Apple TV. It streams netflix and you can rent movies new and old. Still pricewise nothing beats Netflix even with a 60% increase. It’s nutty I’m sure but the problem isn’t Netflix. It’s the studios still beliving it’s the 90s in distribution while Netflix is looking to the future. My money is on Netflix.

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