Netflix

We are going to change to one DVD at a time by mail, unlimited for the month (well, except that it IS limited by the time it takes for it to come in the mail and then be returned). So our price will drop from the $10 a month that we have had for one DVD at a time and unlimited streaming to $8. So in my instance, not a good deal for Netflix---they will be losing my $2 a month and have to pay for much more postage since I won't be streaming and will therefore get many more DVDs a month than I've been currently getting. But I guess they (feel they) know what they are doing...
 
tangomonster said:
But I guess they (feel they) know what they are doing...
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They sure do when it comes to mailings. I returned one to the post office yesterday afternoon. I got an email today at 7:27am stating that they had received it. Another email at 10:39 confirming that they had mailed our next dvd to be received Monday. So it works out about 4 day turnaround per movie. If we push it, we can get 7 movies a month for $8 under the one at a time plan. Not bad.
 
David Pogue, Technology writer for the NYT, has an interesting thought on this:
I kept saying to him: “O.K., look. In November, $10 a month for one-DVD-plus-streaming seemed like a viable offering. Now, eight months later, you need to charge $16 for the same exact offering. You say your costs haven’t changed that much. You say the new studio contracts aren’t to blame. The only other possibility I can think of is that your initial $10 pricing was a mistake.”

He wouldn’t agree. He sort of came close, though, when he said that the unexpected success of the streaming service shifted the balance of power between it and the DVD business. Originally, it was “pay $10 for one DVD—streaming free!” Almost overnight, though, people began thinking of it as, “pay $8 for unlimited streaming—and get one DVD for $2 more!”

“That’s not sustainable for the longer life of DVD’s,” Mr. Swasey said. “We need more revenue. It’s a business concern we have to address. We want two separate business units, each side of the service. We were not able to fulfill the requests for DVDs at that cost.”

I’m afraid that’s the best answer we’re going to get, short of the conspiracy theories. (One of them is that Netflix wants to hasten the demise of the DVD. This price hike will force millions of people to go for streaming only, a more profitable business for Netflix.)
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The blog post is here Why Netflix Raised Its Prices - NYTimes.com

He concludes by saying
Want to know the worst part? He’s right. PCWorld.com has a nice summary of Netflix alternatives. There’s Amazon Prime (no DVDs by mail, small streaming selection). Blockbuster by Mail (pricier mailed DVDs, no free streaming at all). Hulu Plus (no DVDs at all). Redbox (no streaming, pay by the day). In other words, even at $16, Netflix still gives you more than anyone else.
So whether we like it or not, whether we can explain it or not, Netflix has indeed killed the best entertainment deal on the Web. Mr. Swasey has it half right: it’s gone from an extreme terrific value — to an average one.
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My issue was not with the increase itself. I was taken aback by Netflix's disdain for its customers. I'm convinced that if they had simply presented a reasonable case (e.g., "we need the money to invest in expanding our streaming selection, something many of our customers have requested"), the increase would have been accepted with little or no resistance.

Instead, they disingenuously tried to put it forth as an improvement of their service plans and essentially said, "We know a lot of you will be pissed off and cancel, and we've factored that in. Goodbye."

In one fell swoop, they eliminated all the goodwill they had built up among loyal customers (I was among them) who had previously talked them up to friends and family.

They have to learn their lesson. I'm canceling both the DVD and streaming plans before the rate increase takes effect in a few days.
 
wishin&hopin said:
My issue was not with the increase itself. I was taken aback by Netflix's disdain for its customers. I'm convinced that if they had simply presented a reasonable case (e.g., "we need the money to invest in expanding our streaming selection, something many of our customers have requested"), the increase would have been accepted with little or no resistance.

Instead, they disingenuously tried to put it forth as an improvement of their service plans and essentially said, "We know a lot of you will be pissed off and cancel, and we've factored that in. Goodbye."

In one fell swoop, they eliminated all the goodwill they had built up among loyal customers (I was among them) who had previously talked them up to friends and family.

They have to learn their lesson. I'm canceling both the DVD and streaming plans before the rate increase takes effect in a few days.
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This is what strikes me as so odd.
In my case, Netfix DID come out and say 'we hate to do this, but to improve our service, and as some people only use streaming, we are separating the two services'.

I didn't get the impression at all that they were saying 'tough and goodbye'.

We got both an email and,as I recall, a letter announcing the change which I welcome.
 
I just reread the original email. I don't see anything equivalent to "we hate to do this" in there.

The change was presented as a way to "provide great value to our current and future DVDs by mail members," per their blog post. When the response was so massively negative, they took a defensive posture. Their VP of corporate communications said the increase was only equivalent to "a latte or two" and told David Pogue of the New York Times that Netflix had "already taken the subscriber defection into account in its financial forecasts" and "still figures it will come out ahead."

It was only later, when the 2Q results were released, that CEO Reed Hastings said "we feel bad about having customers upset with us" and "with this pricing change, we're going to be able to strengthen that streaming plan with more content." That should have been the message from the start. But Hastings still couldn't help turning a deaf ear to the huge chorus of customer complaints, claiming that "the noise level was actually less than we expected."

I don't understand why Netflix has decided that building customer loyalty has little value. Even after the bungled communication, there was no attempt to grandfather in existing customers. It was "take it or leave it." And Netflix has been taking other actions that display the same attitude -- for example, dismantling the social community component of their site (their reviewer system), despite complaints.
 
Ronstar said:
http://technolog.msnbc.msn.com/_news/2011/07/12/7069809-thousands-threaten-to-quit-netflixAny other alternatives?
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Our library lets us rent six videos per visit (3 for me and 3 for Lena), we can have each out for up to two weeks. It's FREE.

The selection is good, and I can request them online to be picked up at the library. I have a record of all the videos we've borrowed.

In the last few weeks:


  • The King's Speech
  • Inception
  • Zero Kelvin
  • The Sunshine State
  • Hell is for Heroes
  • The Curse of the Cat People
  • My Best Friend
  • Macao
  • Mulholland Drive
  • Sabrina
  • Island at War
  • Midsomar Murders
  • Feast of July
  • Another Year
  • The Sum of Us
  • The Son
  • Duplicity
That's pretty hard to beat.
 
What's worse, Netflix increasing cost, whether they explained it well or not, or vendors like DirecTV who promise new subscribers all kinds of freebies while existing customers see rate increases?
 
I canceled the streaming option for both me and my mom. I think the very simple reason they had to raise prices is that as they were renewing deals for content, Netflix is face huge price increases. In order to remain even vaguely profitable they have to raise revenue. I'm not convinced they'll be successful which is why I shorted the stock (down 20%).
 
In the past it's been easy to restart Netflix once you cancel. They basically seem to treat everything as a "suspend", and if you start back up your queue is still there. I plan to cancel completely, partly as a protest, and partly because in the fall football season and new TV season, I tend to rent less. I was just starting to get into streaming more regularly, but my library has free DVD loans too, and I'm going to see how well that works for me.
 
flyfishnevada said:
What's worse, Netflix increasing cost, whether they explained it well or not, or vendors like DirecTV who promise new subscribers all kinds of freebies while existing customers see rate increases?
Click to expand...

I was just going to mention this when a previous poster mentioned customer loyalty.

I have noticed that Crapcast is offering $99 triple play and a $50 gift-card for new subscribers.
What about your loyal subscribers? I have been using triple play for almost 2 years and pay well over that:mad:
Sometimes I call and threaten to cancel and go with (qwest, DirectTv) whomever, but I have actually been called out on that before....:blush:
And I don't really want to switch....
 
That is the direction I am going. Netflix streaming and Internet tv, then drop the cable tv. Can't remember the last time I used a physical DVD, although the library does sound like a good way to do that.
 
Netflix CEO Hastings in his blog yesterday here
It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes. That was certainly not our intent, and I offer my sincere apology. I’ll try to explain how this happened.
./.
In hindsight, I slid into arrogance based upon past success.
./.
So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to “Qwikster”.

We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.
./.
There are no pricing changes (we’re done with that!). Members who subscribe to both services will have two entries on their credit card statements, one for Qwikster and one for Netflix. The total will be the same as the current charges.
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To summarize

1) Sorry, I made a mistake. Please forgive me, it's my first.
2) We're gonna split in two businesses. One streaming, one dvd rental.
3) Dealing with two of us will be much better and easier for you the customer.
 
The speculation is that they are getting ready to sell off the DVD business.

He said that the DVD and streaming businesses have "very different cost structures." If that's true, why are the basic plans for each both charging $8?
 
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I cancelled both yesterday. Seeing only an apology and no change in rates, I'm not coming back.
 
TromboneAl said:
Our library lets us rent six videos per visit (3 for me and 3 for Lena), we can have each out for up to two weeks. It's FREE.

The selection is good, and I can request them online to be picked up at the library. I have a record of all the videos we've borrowed.

In the last few weeks:


  • The King's Speech
  • Inception
  • Zero Kelvin
    ...
  • Duplicity
That's pretty hard to beat.
Click to expand...

The LA County system interconnects all over the county - reserve some online, they show up at your library for free a few days later. You can have up to 50 out (or in your queue) at a time.
 
MichaelB said:
To summarize

1) Sorry, I made a mistake. Please forgive me, it's my first.
2) We're gonna split in two businesses. One streaming, one dvd rental.
3) Dealing with two of us will be much better and easier for you the customer.
Click to expand...

To re-summarize

1) There. I said I'm sorry. Will you rejoin Netflix now? No, I'm not giving customers anything.
2) We're going to split into two business -- one streaming, one DVD rental. They're totally separate, so you'll have to subscribe to each and carry separate accounts if you want both. Sure, it's a hassle for those customers. I said I was sorry already. Get over it.
3) Dealing with two of us will be much better and easier for you, the customer. OK, that's not true, but I can't help but try to spin it this way, just like I did the rate increase. Maybe a few customers will be fooled.

-------------------

Putting aside Netflix's continued disdain for its customers, there remains one crucial issue: Most newer releases are not currently available through Netflix streaming -- the DVDs were filling that gap -- and I assume the situation will only get worse once STARZ drops Netflix. Will customers really be willing to wait many months before being able to stream a movie? Maybe Netflix will find a way to resolve this issue, but I'd argue it should have been resolved before it separated both businesses.
 
MichaelB said:
Netflix CEO Hastings in his blog yesterday here
To summarize

1) Sorry, I made a mistake. Please forgive me, it's my first.
2) We're gonna split in two businesses. One streaming, one dvd rental.
3) Dealing with two of us will be much better and easier for you the customer.
Click to expand...

Saw this in my email today. Struck me as very strange. Why should I care that he 'made a mistake' if he isn't going to do anything for me (change the rates/conditions)?

Maybe they fear the postal changes (rates, limited delivery days), but separating the two businesses is their business, not mine.

Very strange. Hmmm, NFLX is UP while the market is down. Not sure how this can be seen as positive, maybe an adjustment to over-reaction from the recent drop?

-ERD50
 
Creating two companies, assigning the customer info to just one, retaining the history of customer ratings in only one sounds like a business that's preparing to split or spinoff.
 
My sister who doesn't really follow business news at all call me to say that was the strangest email she's gotten from business. She claims she didn't get any notice from Netflix about the price increase she knew about due to my sister and I talking about.

Here reaction was cancel Netflix all together.

I have to agree what weird decision on there part why would you want to follow with your customer after hitting them with a 60% increase and then make them manage their queues separately? I don' t get it.

A few months ago I shorted Neflix about 270 saying I think it will be $150 it then promptly when up to almost $300. So I bought some back when it went down to $250s at modest profit, unfortunately I got too nervous bought the rest back at $239 at 8/31, my if I only had waited a few weeks it would have got to my $150 price point, argh.
 
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TromboneAl said:
Our library lets us rent six videos per visit (3 for me and 3 for Lena), we can have each out for up to two weeks. It's FREE.

The selection is good, and I can request them online to be picked up at the library. I have a record of all the videos we've borrowed.

In the last few weeks:

  • The King's Speech
  • Inception
  • Zero Kelvin
  • The Sunshine State
  • Hell is for Heroes
  • The Curse of the Cat People
  • My Best Friend
  • Macao
  • Mulholland Drive
  • Sabrina
  • Island at War
  • Midsomar Murders
  • Feast of July
  • Another Year
  • The Sum of Us
  • The Son
  • Duplicity
That's pretty hard to beat.
Click to expand...

Good library!
 
Netflix says we're sorry the 60% surprise price hike, followed by losing the Starz online content didn't chase more customers away, so now we will split into two companies, make a ridiculous name change and stop making it possible for any customers still with us to coordinate their streaming and DVD queues. That ought to get rid of plenty more customers.

Have they done any market research on this? Are they short their own stock?
 
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