‘The Great Netflix Shaft’

by Greg Pollowitz

Kevin Drum of Mother Jones is not happy with the new pricing for Netflix which will now charge $7.99 if you want actual DVDs delivered to your home and an additional $7.99 if you want to watch the movies online:

The latest from Netflix:

Netflix Inc. boosted by 60% the price of its cheapest movie-rental plan that includes streaming and DVD rentals, triggering an outcry among customers who still use the disc format despite the growing popularity of online movies.

Am I missing something here? Of course there’s an outcry from customers who still — still! — use prehistoric disc technology. I’ve been a Netflix customer for about a year, ever since the last DVD rental place around here pulled up stakes, and the reason I still rent discs is because the selection of streaming movies on Netflix is pathetic. At a guess, I’d say that when I go to look for a title, it’s available in streaming format about 10% of the time. The other 90% of the time I have no choice but to get the disc.

So how can anyone, least of all Netflix themselves, supposedly be surprised that discs remain popular? Again, am I missing something here?

On a related topic, this is a crappy way to treat customers. When I signed up for Netflix, I remember thinking that they were just trying to lure customers in with a low price that would suddenly jump when enough people had gotten used to the service and would either (a) not notice the price hike or (b) just shrug and keep their subscriptions due to inertia. But I confess that it never occurred to me that Netflix would suddenly jack up their price 60%. Credit for moxie, I guess.

Well, one, brick-and-mortar stores have disappeared, but kiosk-based rentals like Redbox are nearly everywhere. Those movies are $1 per day. But say you rent one DVD movie a week, from either Redbox or Nextflix — the cost difference between the two services is only $4. Is that really getting the “shaft?”

And two, when you combine everything we pay for technology — cell phones, data plans for cell phones, USB modems, cable TV, home internet — Netflix is really the cheapest thing out there. The “shaft” is really a pin prick.



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