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Et Tu Netflix? Netflix Price Increases, Again!

Netflix, Please Add Value When Raising Prices.

Netflix, as I’m sure you’ve heard, will raise their prices, yet again. For those who don’t remember, there was a $1 price increase in November of 2010. As many of my readers know, I’m very much a consumer activist, and dislike when companies do things like this in a classless manner.

I know, I know: Netflix is a for-profit company. I’ve heard the defense numerous times this last 2 days, but here is why I’m annoyed. If you want to raise prices, fine, but you better offer something of value for it. Netflix streaming service isn’t where it should be to justify people not needing the DVD service.

If it were, people wouldn’t be renting the DVDs! Who chooses to wait 2 days for a movie, if they could watch it instantly (I highlight some prime examples below)? Customers using the DVD plans weren’t a problem, they were the symptom of a problem.

Netflix’s Dilemma

Netflix has this awesome streaming platform with thousands of titles, literally thousands! (we’ll dig into this shortly). Either you can stream video from them over this awesome platform (and it costs them little), or you can order a DVD from them (which costs them money)! What are some of the costs for the DVDs?

  • The obvious shipping cost.
  • Employees to handle the disks.
  • Additional shipping for damaged/unreadable disks.
  • DVD loss due to theft/accidents/Postal Service Losing disks (Postal Service lost one of mine).
  • Facilities to manage/process the disks.
  • The paper to ship the disks in.
  • The overall software infrastructure and maintenance to track, and inventory the DVDs.

Wow, that sounds like a huge job, and it is! Netflix has done an amazing job handling this, but naturally, they wanted to get away from all of this and enjoy the gravy that is Internet Streaming. They figured that people would naturally migrate over to the Internet Streaming, WHOOPS!

Netflix Price Poll

[polldaddy poll=5239125]

Where Netflix Went Wrong

Netflix boasts thousands upon thousands of titles, here’s the problem: ultimately, numbers don’t matter if the titles are garbage.

Don’t get me wrong, Netflix has an excellent selection of movies, and many that I want to see, but largely, the library is filled with garbage. How can I say that when I know that I haven’t seen the entire library? The proof is in the pudding.

People want convenience, and people want to stream, the problem is they can’t because Netflix doesn’t have what they want for streaming.

So, instead of working harder on getting proper licensing for the holes in their library, they are instead going to strong-arm their customers.

As riveting as the huge selection of B & C Horror flicks, and teenage comedies/debaucheries is, the selection of new releases that people actually want to see is deficient. They even have a problem with older hits! What are some titles that aren’t on Streaming?

  • Star Wars (That is a slight problem!)
  • Casablanca (Are you kidding me? 70 years old, and you don’t have it?)
  • Jurassic Park (I love these movies and was disappointed when I couldn’t get them on STREAMING! That’s right Netflix, I would have streamed these if I had the option!)
  • Chronicles of Narnia
  • 2 out of 3 of the Lord of the Rings trilogy.
  • The Shawshank Redemption (One of my absolute favorite films)

I’m not being unfair here, these movies have been out for years. These are some of the most popular or highly acclaimed films of all time, and they don’t have them on streaming. How were they surprised that people didn’t leave the DVD options?

Netflix’s Issues Are Its Own

If Netflix wants customers on streaming, then they need to build the value to attract people to it. Forcing your customers into somethings they don’t want will only keep them with you long enough for them to find a better alternative. Now, customers are forced to make a decision:

  • Pay their inflated price (which was designed to offend you so you would drop the DVD service), deal with their mediocre streaming selection, and hope they have enough incentive to better it (they already got you, didn’t they?)
  • Protest: Walk away from Netflix, try some alternatives, and hope that Netflix can get their stream selection together so it is attractive enough for you to want to use it exclusively.
  • Protest: Drop the streaming service, and only get DVDs. This is exactly what Netflix doesn’t want (despite what their blog post says). I know this because the streaming doesn’t cost them anywhere near what DVDs cost them. They’ll play non-chalant, but they definitely don’t want people on the DVD only plan.

I’m definitely looking into my options. I received a nice little email from Amazon letting me know about their streaming service (coincidence I’m sure), I may give it a look and let Netflix figure out the tragic train wreck that is their public relations, market research, customer needs, and pricing philosophies.

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