Is Netflix Still a Good Deal?

Filed in Uncategorized by on July 14, 2011 0 Comments

Up until now Netflix has been the darling of the DVD and streaming video world. In the past 5 years they have only had one price increase.

Starting September 1st of this year the company will initiate their second increase for their already subscribed customers, and it will be a whopper of a price hike. Their price increase has already gone into effect for any new customers wanting to subscribe. If they have gone overboard in their efforts to begin charging for their online streaming service, how many customers will they lose?

Netflix began the streaming part of their business back in 2007. People love it. When it first became available there were no extra charges involved. If you’ve paid any attention to the news lately, you know that they are receiving a lot of pressure from movie studios. The studios are anxious to get their piece of the pie. They are forcing online streaming services to seek higher pricing. If you read Mashable, you may have seen one of their articles that makes the point of how the price of content is skyrocketing. So who is being the greediest?

The Mashable reader comments themselves are also interesting to browse through. Many people are willing to drop their long time movie provider. But the alternatives are still not really cheaper. Who would benefit from a mass exodus from Netflix? Hulu is probably the closest competitor for online streaming. Yet they don’t offer DVD rental. They charge $7.99 for their service, so there’s no winning if you go that direction. Other companies like Amazon and Google charge per movie for streaming.

Mashable also did what they termed as a ” non-scientific poll.” In their poll supposedly 37% of the respondents said they would cancel their service. How many people they polled was not disclosed. They did mention, to their credit, that it was a “non-scientific” poll. Only time will tell how disgruntled customers really are about this price increase.

It makes you wonder if Netflix is planning on doing away with its DVD service. After all, when you go to their internet site, the only thing it shows is that they are offering a free one month trial of their streaming service for $7.99. There isn’t even a mention of their DVD rentals on their main landing page. If you dig a little deeper you will find that during the sign up process you will be given a choice to also sign up for DVD delivery.

If you now subscribe to two unlimited DVDs, you pay $16.04 including tax per month. Until September 1st you still get streaming at no additional charge. After September 1 Netflix will charge you $19.98. With tax that will bring your total bill to $21.40. That’s around a 34% increase or $5.36 more a month.

You have four choices; 1) you can cancel your subscription, 2) you can cut your DVDs to just one, 3) you can accept the increase, and 4) you can drop one of the services, and pay just $7.99 for whichever service you decide to keep. With the second choice your fee will only increase by .99, and with the fourth choice you reduce your subscription fee. You’re still getting a good value for your money when you compare it to cable and satellite fees.

There will be plenty of people who will opt for choice #1. People are angry and who can blame them. Should you be angry at Netflix? Maybe, but no matter how you look at it prices are going up. Each person will have to decide whether they want to cancel their subscription, but Netflix still seems to be a good deal.

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