Sunday, September 18, 2011

Cutting the Queue

In recent years, we have enjoyed giving and receiving the rotating gift of Netflix from family at Christmas. So much so that we have kept the membership going on a monthly basis after annual gift expiration. We don't watch much TV, and even less movies, until Netlfix. It has been fun filling up our DVD and instant stream queue and catching up on some of those movies (currently 146 and 62, respectively).

Like other monthly members, we received that email in July.

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each.
Your Account | Queue | Help
Dear Robert,

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month

Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don't need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

You can easily change or cancel your unlimited streaming plan, unlimited DVD plan, or both, by going to the <Plan Change> page in <Your Account>.

We realize you have many choices for home entertainment, and we thank you for your business. As always, if you have questions, please feel free to call us at 1-888-357-1516.

–The Netflix Team

Hm. I'm a numbers guy, and seems to me our monthly fees were poised to jump 60%. That's a big number.

Since we moved, we decided to never set up cable/satellite (easier than cutting the cable). Until then, we mostly watched TV at the exclusive service of our satellite DVR, so it was pretty easy. We also have the type of modern TV that is internet-ready, so streaming is a snap when broadcast isn't interesting. Netflix worked well in this approach, offering both the DVD (~3 day turnaround) bridged now by a handful of instant-watch options just as convenient. Although we didn't like $120 a year for an optional service, since our higher double digit monthly costs dropped to $0 after the move, it wasn't a bad deal for a little entertainment.

We have enjoyed both watching the DVDs in the mail and streaming from the Instant Queue, so my pancakes were understandably fried. I'm not going to over-simplify what really drives the operating costs of each, because I can only imagine the lot of ins & outs & what-have-yous behind all those viewing contracts. I do hope Netflix well and also hope this move doesn't backfire and actually result in a net drop in revenue and continued decline. Empowered by the liberty to shop the competition or withdraw from this product or service, we decided it just wasn't worth $192 annually.

But if it does, I will not stand for any drop in Netflix DVD mailings to be majority blamed for what is really killing the USPS (methinks "80%" sounds closer to "majority").