Netflix has more than 23 million subscribers who rent DVDs and stream instant movies. I really enjoyed watching movies from Netflix, but their recent price increase made me mad. Here's the story of why I am no longer a Netflix subscriber.
I have been a fairly happy Netflix subscriber for about a year. My $9.99 a month subscription allowed me to rent one DVD at a time. If I watched the DVD the day I received it and returned it in the mail quickly, I could watch as many as three movies a week. That, however, rarely happened. During my subscription period I averaged less than one movie a week.
As part of my Netflix subscription I could watch as many instant movies as I liked. These were streamed to my television via my Nintendo Wii gaming device. The streaming movies worked quite well. It was pretty much just like watching television without commercials.
The Netflix service wasn't perfect. Once I got a blank DVD. Several times the DVDs came scratched or dirty. There were a lot of movies and television shows available for instant streaming, however most of them were older shows. Also, I couldn't always get the very latest DVDs. I recently tried to get two newly released DVDs only to be told that Netflix has no definitive date when they would be available. Both of these movies were already available at the Redbox and Blockbuster kiosks.
I was willing to put up with these faults because the price was right. That monetary benefit, however, was recently removed when Netflix announced that it would split its service and its pricing. Under the new service plan to get the same service, I would have to subscribe to two separate plans. There would now be a plan for DVD rentals with their one-DVD-at-a-time plan costing $7.99 a month. The subscription for streaming would be $7.99 a month. So my subscription rate would go from $9.99 a month to $15.98 a month. According to my calculations that is a 60% increase.
Of course different people have reacted differently to this increase. A young working couple might not even blink at an extra $8 a month. A retired couple who is on a fixed income might find it to be steep. For me, somewhere in the middle between young and retired, I found it simply unbelievable. Not only was the increase steep, it came too quickly. Netflix could have done the increase slowly in increments or they could have offered a price reduction or other perk to current subscribers. There was, however, no bone thrown to subscribers, just a "take it or leave it" offer.
Well, I guess that shows how much the subscribers mean to Netflix. In April 2011, Netflix announced 23.6 million subscribers. I am, obviously, just one of many. Netflix recently confirmed that it will be bringing instant streaming to 43 Latin American and Caribbean countries in late 2011. Rumors are circulating that Netflix will also expand into Europe in 2012. Then I will be just one of many more.
You see, Netflix needed me at first. I helped to make their service a success. Now they don't need me anymore. I am completely expendable. They expect to lose some subscribers over this price hike. In fact, even if 40% of their customers desert them because of the increase, they will still make just as much money as they did before. And they are betting that people are willing to pay more for the convenience they offer and the name they have built. Yet, somehow, this dramatic price increase may have hurt their customer loyalty. Those who stay with the program and pay the price increase may not love Netflix as much as they once did.
I myself, feel somewhat used, so I just canceled my Netflix subscription. The way that I have it figured, since I was only averaging one movie a week, I can rent a Redbox movie every week for $4 a month and see some of the newer movies that I had to wait for on Netflix. Even with the price of gas to get to the Redbox, I come out ahead.
Instead of Netflix's instant streaming, I'll watch the Turner Classic Movie channel and other movies on television. Yes, I'll have to put up with the commercials, but I can always use commercial time to fold some laundry or get a snack. Hopefully the weight that I gain from the extra snacking will be offset by the energy used by trips to the store to get the movies. There is also a good possibility that this might even turn out to be a wonderful socializing experience. I may run into some of you while renting my movies. So if you see me in line at the Redbox, be sure to say hello.