Wednesday, July 13, 2011

The Netflix Conundrum, Part 3

Netflix is splitting its streaming and DVD services into two separate charges, meaning a substantial monthly price hike for a majority of customers...and they're not happy about it.

So the new plan is going to be $7.99 for unlimited streaming or unlimited DVDs every month, (or $11.99 for two DVDs rented at a time) every month. If subscribers want both, they're going to just have to pay double.

Some subscribers reacted angrily to the change in the blogs' comments section, while Ryan Lawler over at GigaOm noted that the change would help the company break out its financials more easily for investors to see how it really makes money.

Given that there's only a limited selection of movies available for streaming, it's not surprising that there's a continued demand for DVDs.

As many of the commenters noted on Netflix's blog, the change alters the value of the service -- which is convenience.

It was convenient to have an unlimited streaming account with the option of occasionally ordering a DVD for a title couldn't otherwise be accessed. 

Netflix I think is in real trouble here.  I know personally I like their streaming service a lot, but I'll definitely scale back on the DVDs now.  Maybe that's what they want, I don't know.  I do know that Google's on-demand movie rental service through YouTube and Apple's iMovies service are both looking like a better idea to me as a consumer now, especially for what Netflix will be charging for streaming and DVDs.

Or better, I just cancel the DVDs part, and Netflix loses revenue on me.  We'll see.

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