Let’s Settle Down on the Netflix Hysteria

As I type this, Netflix’s stock is down over 18% today in reaction to the company’s lowered expectations for subscriber growth this quarter.  The lower subscriber figures are a direct result of the company’s price increase for it’s only product: providing access to watch television shows and movies.

Netflix does this through mail-order DVDs and streaming video.  Everyone knows this.  The price Netflix used to charge was $7.99 for unlimited streaming and unlimited DVDs one-at-a-time per month, which is a ridiculously low price for that offering.  Netflix quickly realized this and increased the price by splitting the offerings: $7.99 for unlimited streaming, $7.99 for one-DVD-at-a-time.  The initial claim why they did this was because they didn’t realize how many people would still want DVDs while also being able to stream as much as they wanted.

Customers still wanted DVDs because Netflix didn’t have enough content to stream online, which bring us to a weird conundrum: people complain that there isn’t enough to stream online, so they still need DVDs, while still wanting to stream as much as possible.  If there isn’t enough to stream, why not give that part up?

I have a subscription to Netflix right now thanks to a gift from my mother last Christmas.  I get unlimited streaming and one-DVD-at-a-time for no extra cost until the end of December.  At that time, I’ll have a decision to make, much like millions of customers had to make a few weeks back.

At this point, the only time I use the streaming service is to watch Mad Men.  When I am done watching Mad Men, I have no reason for the streaming option on Netflix.  Many of the shows I am trying to catch up on (or start watching because they are over) are not available to stream anyway.

I realize this is not the case for everyone, but I do have a suggestion: if you are someone who uses the Netflix streaming to catch up on television shows, why not just pay for the streaming for one month and then cancel it?  No one said you have to pay $7.99 for unlimited streaming every month for the rest of your life.  Pick and choose which months you want to stream and pay for those months.  It’s that simple.

If you don’t have a streaming account, you can still see what is available to stream.  So, pick a month where you watch your streamed queue and then go with the DVDs during the other months.

Even if you decide that you need unlimited streaming plus at least one-DVD-at-a-time, is there a cheaper alternative?  The great thing about Netflix is that the selection is huge.  I’ve heard that Redbox is a legitimate competitor thanks to their $1 per day price, but it’s ridiculous to think that’s really going to bite into Netflix.  Redbox machines have no more than 100 available titles and the number is probably closer to 40.  What happens if you don’t like any of the 40 or you already saw the ones they have?

Blockbuster and Walmart apparently have options too, but they offer no where near as much as Netflix and for the same price or more.

People may be bailing now, or not starting with Netflix, but I would bet a lot of them come back.