Tuesday, July 12, 2011

Netflix Decides its Prices are too Low

Netflix decided to change its pricing plans. I'm currently a customer who uses their unlimited streaming ($7.99), along with 1 DVD out at-a-time (Unlimited) plan (+$2). I pay $9.99 for these services. I was previously using RedBox but found this option to be cheaper.

This will no longer be the case because the cost of these services will increase to $15.98 (on or after Sept. 1st). The streaming services will continue to be $7.99 but for the 1 DVD out at-a-time (Unlimited) plan it will be $7.99. They are no longer bundling them together at a cheaper rate. My account states:
The price of your Unlimited Streaming + 1 DVD out at-a-time (Unlimited) plan will change to $15.98 (plus any applicable tax) a month starting with your next billing period on or after Sep 01, 2011. If you select a new plan in the meantime, you will only be able to return to your current plan at the new price, regardless of when you make the change.
I've only been using their services since the end of May. In June, I returned the movies as fast as possible and only received 6 DVDs. Some very quick math ($7.99/6 = 1.33) shows that each DVD costs $1.33. I live near two RedBox locations and they are only $1 per night. They also have new DVD releases available sooner and there is no shipping delay. However, their selection is very limited.

I also am using my Xbox 360 to have access to the streaming services and that is an additional cost. While Netflix isn't at fault for the fees to use Xbox Live, it adds an additional cost.

As everyone is struggling to pay their bills, Netflix offered a cheap entertainment option. Now it isn't going to be quite as a cheap. Before my bill is increased, I'm going to request DVDs that aren't accessible at RedBox or with the streaming option. Then when my bill is increased, I will probably cancel the DVD plan.

I joined NetFlix because it offered a cheaper option as compared to RedBox but that is no longer the case. Their policies include slowing the turnaround time for DVDs, which mean the cost per DVD will increase. The combination of that policy and their increase in costs no longer makes it a reasonable option for my household. Hopefully, the quality of the streaming selection increases or I might cancel that as well. Paying $7.99/month to watch a bunch of mediocre movies isn't really that great of a deal.