Editorial: Netflix was too cheap before, but now it’s just wrong

Yesterday Netflix did something pretty big: it cut the umbilical cord on its streaming video offerings. What was a funny little niche offering, a rag-tag choice of canceled TV shows you never watched and ’80s movies you never rented, had grown into something big, something that also wasn’t quite great but was legitimately impressive. As such, that service deserved its own plan, to face tall and other than the red envelopes that made the corporate famous.

But there’s one problem: after cutting Instant loose, making a new $7.99 streaming-only plan, Netflix stuck the dagger right in its own side by not re-thinking its disc-based rentals — plans that looked much more valuable before than they do now. Netflix has succeeded in making its on-demand offerings so good that those unlimited snail mail samplings can’t quite rise up on their lonesome two feet anymore. In any case, they can not rise up tall enough to support their $7.99 and up prices. Maybe, Netflix, it is time to return to the basics.

I won’t fully recount the nearly miraculous growth and development of Netflix from its beginnings as a gap rental service, but here is a quick overview simply to be certain we’re all at the same page. The company’s website went live back in 1998, charging $4 per rental plus $2 shipping on each — a virtually laughably high cost that, on the time, was quite comparable with what aging rental stores were asking in their card-carrying members. That only lasted until 2000, when the now famous unlimited rentals without due dates program began.

Since then Netflix has gone directly to send nearly every traditional video rental store into bankruptcy , becoming the only largest source of traffic on the web. The corporate that when got the usa Postal Service all flustered is now a massive this is why netizens everywhere are up in arms about network neutrality , and — until yesterday — it looked poised to simply go up from there.

Now, though, i am not sure what is going to happen. If previously you had the “1 DVD out at-a-time” plan with unlimited streaming, you would be paying $9.99 monthly. That was, with no trouble, a really good buy. a very, superb deal. Under the brand new scheme that plan drops to $7.99 ($9.99 if you need access to Blu-ray movies), but when you wish to have streaming you will need to pay another $7.99. Now you are looking at $15.98 a month for the pair, that is still a damned fine deal — but there are a number of problems.

For something, Netflix isn’t adding any new content to move in conjunction with this price hike. To claim “our service today is worth 50 percent greater than it cost yesterday” is very brash when that service hasn’t changed a lick over that 24-hour period. Sure, there has been that Star Trek deal from a number of weeks ago, however the ability to revisit the Kirk vs. Picard vs. Archer vs. Sisko vs. Janeway debate (again) doesn’t make up for this type of big hike.

More importantly, the very notion of receiving a disc inside the mail suddenly feels so much more quaint than it did back in 2007 , when users got one hour of “Watch Now” streaming for each dollar they spent on disc-based delivery. There has been nothing to look at back then, but nowadays there’s enough for me to spend rather more time streaming stuff than spinning discs — enough that I’ll easily go every week or two without peeking to work out what’s inside the latest crimson Tyvek pouch.

Why is Netflix doing this? Because that streaming content isn’t cheap and, as more people watch, those licensing fees are just going to get higher. And that is just the start: if Netflix is hustling more data than anybody else in the world, just try to calculate the company’s hosting costs. This additional money coming in may help Netflix to move after more and higher content, and to get it earlier — but with this big price hike the corporate runs a true risk of alienating its subscribers, a sentiment that lots of you have got shared with us.

For me, as a subscriber myself, it’s decision time. Will I keep my Netflix account? Yes — as a minimum partially. i adore Netflix’s streaming options greater than what’s on offer from the identically priced Hulu Plus service and, while i believe 0 Amazon Prime Instant Video 0 would be a contender at some point, at once the inability of console support makes it a non-starter for me.

i will think hard and long about canceling my disc services, or not less than dropping back to the twice-monthly DVD plan. But, I’d really like for Netflix to take a cue from 1 Redbox 1 (and, indeed, from its original pricing scheme) and let me pay per-disc. Increasingly more often I’m happy to attend for the random choice of decidedly non-new releases to pop up at the company’s Instant service before I watch them. It is only the new, high-impact, exciting new releases that i truly want on disc. You realize, the type of movie you considered going to look at the theater and totally planned to, but then one in all your folks flaked otherwise you got lazy otherwise you called ahead for ticket prices and also you decided “Yeah, I’ll just watch for Netflix and put that cash toward my college loans.” Those are the films that i need on disc.

In place of the minimum $4.99 a month plan for 2 discs (a buck more for Blu-ray), Netflix should make a brand new one: $2 monthly to maintain the lights on after which $2 for every DVD I rent — $3 per Blu-ray. Subscriber of the streaming plan already? Knock off that $2 monthly fee and just charge me for the person things that need shipped my way. With that i’ll still get the odd disc when I’m particularly hot for a brand new release but not be stuck paying $8 a month for the privilege of getting a red envelope sit unopened on my coffee table.

Sure, it’s almost anti-American to need to step faraway from the fully-inclusive offer, but this new plan can be like having full access to an all-you-can-eat buffet while also selecting an a la carte menu for those particular treats not found beneath a sneeze guard. That is the better of both worlds, enough to sate a content glutton who has a taste for the finer things, and the type of exclusive garnish that could keep Netflix looking tastier than its rapidly improving, streaming-only competition.

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This post is tagged: growth and development, miraculous growth, Network Neutrality, us postal service, video offerings, video rental store