Further Lessons in Customer Alienation...Netflix
They are jacking up the price big time, dammit. They will probably lose me over this...it doesn't really make economic sense as it is, this will only make it that much worse.
And yet, there's an important difference vis-a-vis eMusic in the way they're handling this: they say it up front. Most of our customers want streaming. The future is streaming. Therefore we are focusing on streaming. (There is a low-cost option for customers who want streaming only...No disc-only option for those who don't want/use streaming, which would be me.)
IMO, they are a little early on this. The streaming selection is very limited, and the vast majority of people don't have the technology yet. But at least they shooting straight about what they are doing and why they are doing it. They are willing to let me remain a troglodyte, if I'm willing to pay for the privilege! No doubt they will be happy when they have mailed out their last DVD, and they are doing what they can to hasten that day. Meanwhile, their investors think it's a swell idea.
And yet, there's an important difference vis-a-vis eMusic in the way they're handling this: they say it up front. Most of our customers want streaming. The future is streaming. Therefore we are focusing on streaming. (There is a low-cost option for customers who want streaming only...No disc-only option for those who don't want/use streaming, which would be me.)
IMO, they are a little early on this. The streaming selection is very limited, and the vast majority of people don't have the technology yet. But at least they shooting straight about what they are doing and why they are doing it. They are willing to let me remain a troglodyte, if I'm willing to pay for the privilege! No doubt they will be happy when they have mailed out their last DVD, and they are doing what they can to hasten that day. Meanwhile, their investors think it's a swell idea.
Comments
It's an interesting comparison with eMu. While eMu was basically set on doing a price increase and held off until they could get a major on board (supposedly) they ended up getting slammed because the two moves were completely tied together. Many people have wondered whether they might not have had such a negative reaction if they simply increased the prices and said that it was necessary to keep the business running and hopefully add new content in the future.
On the other hand, Netflix didn't bother waiting for new content. They've said this is how the business is changing and it's time to move on. I think they received a lot of requests for the streaming only here in the US after they initially rolled it out to Canada. I wonder, though, if Netflix would have been served better by having a bunch of new releases ready to go online. Unlike eMu there would be no backlash to new content - and clearly the lack of new releases is the biggest problem with streaming. Over 1/3 of my regular queue (and a ton of stuff I never added) is available to stream - but that's largely because I haven't added many recent movies in awhile.
Honestly, I think both companies did the opposite of what they should have. The only difference is that the Netflix change will most likely barely effect the bottom line of the majority of their customers.
But the pricing increase only looks like a buck a month to me. If emusic had increased prices twice by a buck a month but left my content the same I'd have no complaints.
[edit] - I didn't look at the chart for how much the bigger plans were increasing. Still, if emusic had gone up by $4; about what Netlix's closest option to $20; but I still got 90 a month, I wouldn't have minded. Emusic's cut was a lot more though - $20 went from 90 to $20.79 to 50 to about 48 cheap tracks - to get 90 cheap tracks I'd have to spend $41.99 - a lot more than a $4 increase.
Relevant:
Back in my bachelor days, a roommate and I went in on and account together (sadly before they added profiles and then deleted them). Since we were both getting 3 at a time for something like $17/month, we switched to the 8 at a time for about $35. Basically the same cost, but we each got an extra movie. Of course in those days I could sit and watch 2 or 3 movies in a row and mail them all back the next day with no problem.
It's a lot harder to convince my wife to watch a silent communist propaganda film from the 1910s once we get to relax for the evening no matter how historically important it is.
Interesting about "not waiting for new content"...they are getting slammed not only by DVD-only people like me, but also by streaming people because of the limited selection (incidentally, largely about the fact that they no longer offer "Lost"). But they have a clear vision where they're headed, so off they go, even if prematurely.
The main comparison with eMu is the way the message is delivered...they're not pretending that a change you don't want is good for you. Streaming wins, DVD loses, period.
Of course, Netflix has the clout to drive the market, eg, getting me to consider Roku. Also, the fewer discs they ship, the more their costs go down. This could be the beginning (or middle) of the end for the US Postal Service!
.....On the other hand, Netflix didn't bother waiting for new content.
>>>>>>
Actually, Netflix has signed some significant streaming deals over the past couple months. Not sure when all that content from those various deals actually arrived but I think any new content they acquired rights to stream would be made available relatively soon after the announcements. So, Netflix actually paid to get the content up front, let their community get a taste of what that content is and then introduced tweaks to their pricing plans.
BTW: We are much in the same boat w/regards to the physical DVD from Netflix; we are lucky to recycle/return more than 1 physical DVD a month (we need to work on that). It is just so much more convenient to pick from the multitude of available streaming options immediately available depending on your current mood vs. watching a physical DVD that you might have that might be a sober documentary when you're actually in the mood for comedy or and action flick.
Streaming aside, I think Netflix will still do well on the DVD service. There are still millions of folks in rural areas who are either on dial-up or satellite. Not sure streaming would work at all on dial up. AFAIK, you can't DL the whole thing and then start watching.
Satellite, a lot of users have Hughes, which caps bandwidth during prime time. Unless they want to stream movies at 2am, they'd have to pay surcharges.
I've never had a Netflix sub. Just don't watch movies...basically ever. If I did though, I'd sure as heck want streaming.
Craig
Netflix has rekindled my obsession with The Rockford Files. Streaming makes these sorts of vices so easy to succumb to.
/confession
edit: nope, a firebird
Redbox is okay, especially for new releases. They text a free rental code for the first Monday of each month. They also have some random Facebook promos, etc.
@Craig - Damn, you got the right Eisenstein. It's actually a damn brilliant movie. I was ready to sign up to fight the Tsar at the end.
@elwoodicious - Rockford Files is totally on my list. I remember loving that show as a kid but can't remember a damn thing about it. I just have to finish Babylon 5, get caught up with Eureka, then James Garner here I come! Who doesn't think it's cool?
Craig
That said, there are a couple of Rockford novels by mystery novel god Stuart Kaminsky, a guy who also loves movies, TV, and yes, Rockford. They're really good.
re: Netflix, there were a couple of interesting articles in the Hollywood Reporter. One was about the launching of Netflix in Canada: cheaper than the US (7.99 for all you can eat), and all streaming. HR asked when the DVDs were coming, and co-founder and CEO Reed Hastings said it's never going to happen. If he were starting in the US today, it would be all streaming, no DVDs.
In another article, he pointed out that the amount of time people are streaming exceeds the total minutes of the DVDs they're shipping...and as per the cartoon, hardly anybody is watching every minute of the DVDs they receive. Once we approached zero in our household, we dropped it...but the point is that they're well on their way to becoming streaming only. Let Redbox have the DVD business. Fine by me - Redbox is pretty cool. In the meantime, the days of DVDs at Neflix are numbered.
But yes, if you have a full HD setup it's totally worth it. I have an upconverting DVD player on my 42" Vizio and that alone is pretty great.
Also, check out this video of a Netflix distribution center. Who wants to run dozens of those?
* With regards to my music collection I ceased buying CDs in earnest around 2001 because I was and am more interested in the music rather than the medium. My boss falls on the other end of the spectrum, he's a vinyl collector that is in love of the ritual of listening: scotch, cigar, and a needle touching down on a Billie Holiday 78.
1)a) Number of Blu-ray disks I own: 1. Number I've rented: 1. But the built-in upconvert is very nice, definitely noticeable...and noticeably not as sharp as native Blu-ray.
2) We have to be talking about TVs 42" in or greater, roughly 2 picture heights back. With a clear input, most people's eyes can't resolve the difference in resolution. THAT's why Blu-ray is transitional. The difference between DVD and VHS was immediately visible to every jack-a-knape with a belly telly. Throw in size, durability, better sound - a slam dunk. Blu-ray is tougher....although NOTE: it started slow, but the adoption rate of Blu-ray has comfortably surpassed DVD.
2)a) The Blu-ray players selling best are the ones that have built-in Netflix streaming. No kidding.
3) While streaming is the future, it's getting here faster than expected. Apple (hate/love) is driving it. Steve called Blu-ray "a big bag of hurt," and has committed Apple to NEVER supporting it. OTOH, they've spent well over $1B on a new data center, one of the biggest in the world. Some of it is absolutely beyond question for whatever they've done with the Lala purchase, but a lot of it is for streaming HD content.
4) More important to me than buying Blu-ray: HD movies on cable. Again, quite obviously not as sharp as Blu-ray, even for the most casual viewer, but for me, the winner because I don't miss the physical media.
5) I DO miss the extra features. Especially with informed commentaries and a handful of good behind the scenes things, these are often better than the movies themselves. The Lord of the Rings trilogies are the obvious examples: some of the best pure documentaries on post-war literature and history, moviemaking and design that have ever been made. I learned more from these than from 4 years in film school, and they're entertaining as hell. So the disks I buy are generally for these.
6)a) And for entertainment value. I was shocked to discover the other day that the actor I own the movies with is Bruce Willis. I would never have guessed this until in a conversation about desert island action movies, I had Die Hard and The Fifth Element. I'm not sure I'd call them my favorites, but they bear repeated watching -- Die Hard is a family Christmas tradition.
Sorry for the yap yap yap. This is all pretty well related to both my day job and my personal entertainment passions... not the worst things to have overlap....so it comes up in thorough conversation on a very regular basis....
I want one of these.
It has to be a rare DVD for me to buy it. For a while I was buying a lot of VCR tapes, but that's because we didn't have cable/good reception/used it as a babysitter while making dinner/ ecuatijonal for my son. I think the only grow-up VHS titles I have are Rebecca and Joy Luck Club.
I don't have 5th Element, mainly because they show it on TV so often. That is one of my fave movies, though. DVds, again it is mostly kids' movies except for LOTR, Fight Club, CHronicles of RIddick and Almost Famous.
@amclark2 - Me too!