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I have both Redbox and those Blockbuster kiosks on my way to and from work (during the part I walk) and so I can get a $1 DVD when I want rather than managing w
by mdasen 15y ago
I have both Redbox and those Blockbuster kiosks on my way to and from work (during the part I walk) and so I can get a $1 DVD when I want rather than managing when something will arrive.
I can get a lot from my library. While I don't get to always choose the timing for inter-library loans, I can get a season of television for two weeks at a time. With Netflix, I just get individual DVDs.
Some of the things I want to watch are already online for streaming like South Park. There's a lot of content on Hulu as well and network sites can be overlooked as sources of content.
I think the price hike made a lot of people think about how they used Netflix. When it was a combined service, people thought "oh, I'm getting this interesting combined service" and ended there. Now people are seeing $16/mo for 3-DVDs at a time and wondering. In order to get to the $1/DVD level, you'd have to get 4 per week. I think a lot of people didn't have that high a velocity of DVDs. You get one shipped to you on monday, it arrives tuesday, I find that there's usually at least 2-3 days of it being at my house between finding the time to watch it and forgetting it in the morning, it gets into the post on thursday or friday, gets to Netflix friday or saturday, and basically you've got a week turn-around time. And if you're getting multiple out at a time, it's hard to watch that much content - and watch it consistently month-to-month. Likewise, I think that people ran through a lot of the streaming content. I also think that the on-demand streaming just doesn't allow me to find things well. It keeps showing me the stuff I've already seen and things it thinks I'm going to rate as 2-3 stars. I understand that Netflix went to this less-search, more-browsing interface because their streaming catalogue isn't complete, but it keeps showing me things I don't want to watch and on rare occasions I've had friends tell me about things I didn't know were on there.
So, I think people have been taking stock of Netflix. Netflix raised their prices a mere 9 months prior on them and then again. 3 DVDs plus streaming went from $17 to $20 at the start of 2011 and then from $20 to $24 at the end of summer 2011. For me, there's a genuine feeling that these price increases might continue. I mean, if Netflix goes up another 40% over the next year, that's getting pretty close to "$40 shitcable". Likewise, I surveyed my other options and found them better. I can get a whole season of TV at a time from my library for two weeks. No worrying about how quickly I get disks back into the mail or being annoyed by not having the next disk. New releases I can get from kiosks the night I want them and drop them off on my way to work the next morning and only pay $1. A decent amount of programming is streamable online. Maybe that isn't for you. It's working nicely for me.
I have no hard feelings for Netflix, but I find this works better for me while being cheaper. Their streaming collection held my interest for a while and then began seeming like the re-runs of shows in the 6-8pm time slot - sure, they could be good shows, but they weren't necessarily what you were looking for. For me, Netflix solved the problem of rental stores charging me $5 for a DVD. For basically that price, I could get 3-DVDs at a time. Now I'm finding that I can get a $1 DVD from a kiosk (and can often get coupons for those machines) and grab it when I want on my way home. My library can provide me with deeper selection and it costs me nothing (I have to pay the taxes whether I use it or not) and I don't feel as on-the-clock as I do with Netflix. If I return one I didn't watch, well, I can get it again some other time and haven't lost anything - which isn't the feeling I get from Netflix.
I'm not saying they're a bad service or it shouldn't work for you. I just think there's increase competition from cheap, kiosk-based rentals and that people have been taking stock of how they use their Netflix and finding it a bit lacking. I mean, if you've kept the same DVDs home for a month and haven't watched them, that isn't Netflix's fault, but it does mean that you aren't enjoying a lot of value there. A price increase simply brings that to your attention and makes you think about eliminating it from your expenses.
- padobson 15y ago+1. Why can't the figure out a pricing point? Shouldn't the marginal cost per user be going down as they scale? What's wrong with their infrastructure that it's going up? Or are they just trying to price it for demand? That doesn't make much sense to me if they're pricing away customers in the middle of the growth stage.
- shinratdr 15y agoNetflix doesn't have fixed costs. As they become more popular, licensing becomes more and more expensive and it becomes easier and easier for content owners to jerk them around for their own benefit.
- padobson 15y agoBut don't content costs scale on a linear trajectory? Cable companies pay $x/subscriber for a channel - each additional customer doesn't add to some cost multiplier and profit goes up with revenue and cost of content. Is Netflix so at the whims of content providers that their model is so much different? It seems like a completely broken business if they can't find scalable ways to make their content providers money.
- shinratdr 15y ago> But don't content costs scale on a linear trajectory? Cable companies pay $x/subscriber for a channel - each additional customer doesn't add to some cost multiplier and profit goes up with revenue and cost of content. Netflix doesn't do that, though. There are no channels to speak of, so there is no middleman to negotiate with, there is only the content providers who see you as small peanuts when you're little and a looming, direct threat when you're big. The way Netflix deals work (at least from what we can gather from public articles about the subject) is that Netflix pays a fixed cost for x streams of y content from z provider, with a time expiry for the overall deal. Once the collective user base has used up that streaming bucket or the time has expired, Netflix has to re-negotiate to fill it again. In other words, in 2005 when Netflix only has 500k subscribers and online video is impossible to monitize, handing them a multi year exclusive deal with a 5 million streams for $100 million (pulling these numbers directly out of my ass, just to be clear) is no big deal, you just made $100 million on something that was formerly worthless, good for you. However now it's the year 2011 when advertisers are paying better money for online ads, online viewing is exploding and eating into your traditional sources of revenue, and Netflix is riding their 2005-era deal all the way to the bank. Now letting them get away with that deal is viewed as tantamount to content theft in the eyes of the providers. Suddenly to secure the same deal you got for $100m, will now cost you $500m. Multiply that by every content provider in the industry, and you can plainly see why Netflix is stuck between a rock and a hard place right now.