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Netflix's new rates......

I am going to get one more DVD (The Beast, such a classic!) and then drop down to streaming only for $8. I was one of the many that are getting hosed especially bad with the one DVD+streaming deal going up 60%. Some of the other plans arent so bad percentage-wise but they are all going up as DVD is no longer an add-on to streaming. At least thats what they tell us, yet their royalty increases that are apparently prompting the increases are all on the streaming side. Does that mean my $8 streaming-only plan will go up to $10 or $12 next year when their royalty fees actually increase? I am thinking so, and at that point will probably just read more books.

Im really the most irked because their content is not 100% available for streaming. Take my coming DVD for example, The Beast was released in 1988 and is only available through DVD. These are the kinds of movies I get through the DVD service, not new releases, and for this reason I don't use Redbox very often at all. If EVERYTHING was available streaming I would gladly pay $16 for that and be happy. As it is, though, $16 for DVD's and some streaming content is not worth it.
 
I have noticed that just because its not shown in the catagories on the instant streaming doesn't mean its not avalible on instant streaming. I was looking for Monty Python's Flying Circus on instant so I looked thru the comedy when I didn't see it there I went to search and lo and behold it was on instant.
 
Canceled service. Rate hikes THAT drastic speak volumes of arrogance and their comfort in market share.

Blockbusters are closing down rapidly, so they reward customers this way.

Speak with my wallet
 
From Ehowa.com, makes some sense out of it.

"Netflix's current pricing plan: The $9.99 I pay each month which buys me unlimited streaming of their movies, plus as many DVDs as I would like each month, but only 1 DVD out at a time. They offer 2-3-4-etc DVDs at a time plans, but eh, most of the stuff on DVD that I want to watch is pretty eclectic and only comes along every so often, so so why bother.

Netflix's new pricing plan: it will cost $7.99 for unlimited streaming, plus an additional $7.99 for the 1-DVD at a time plan.

Although existing customers are grandfather in until September 1st, obviously my first reaction to this gigantic rate hike was to have an aneurysm and vomit all over the place. But being the empathetic soul that I am, tried to look at this from Netflix's point of view. What prompted such a drastic shift in their priving scheme? Well, it's a two folded problem. First, let's look at the new challenges that now face their streaming side of the house.

When netflix first started streaming, the likes of Hollywood folks such as Stephen Spielberg, Michael Bay, and James Cameron weren't entirely sure if streaming movies was just a passing fad or not. So when Netflix approached them asking to license their media, eh, it was more of an experimental gestures on Hollywood's behalf. In 2010, the cost for Netflix to license all of their streaming movies was around $180 million dollars in fees paid out to Your Favorite Hollywood Entity. But with DVD/Blu-Ray sales down, now Hollywood sees that streaming media is indeed the way of the future and with more streaming players in the market (Hulu, Amazon, Apple, Google), rights to streaming media are becoming a rather lucrative commodity. What cost Netflix $180 million in 2010, is expected to cost them $1.98 BILLION in 2012. For those of you keeping score, that's an ELEVEN fold increase in licensing costs.

Now let's look at the mail-order DVD rental side of the house -- which I just want to go on record as predicting to die off within five years. Anyway, when Netflix first opened their doors back in 1999, the cost of mailing out one movie was $0.33 each way. Now twelve years later and it's $0.44, that's a 33% increase in costs. So every time Netflix mails me a movie and I sent back to them in their pre-paid envelopes, it costs them $0.88. Where I live, the turnaround time for a movie is two days after I order it -- so if I order it on Monday afternoon, it's in my mailbox on Wednesday afternoon. Let's say I watch it that night, and mail it back on Thursday -- if I get it into a mailbox before 10am, Netflix will receive it on Friday and mail me out another movie that afternoon. Lather, rinse, repeat. Turn around time for a movie: 5 days. Number of DVDs I can get mailed out in a 30 day period: 6, although 7 isn't unrealistic if I'm quick about getting the movies back out the door. But let's use 6 DVDs per month x $0.88 per DVD (not including their purchase price) = $5.28 in postage costs per month. Subtract that $5.28 from the $9.99 I'm paying now and Netflix gets paid $4.71 to let me stream their entire movie collection.

In 2010 it costs Netflix about $0.05 to stream a high definition movie, and predictions are their licensing fees for streaming media are going to increase to eleven times what they are now, it will soon cost them $0.55 to stream a movie to your living room. Let's say you only stream 3 movies per week -- that's 12 movies per month -- equals $5.28 in postage fees + $6.60 in licensing fees = $11.88 Netflix needs to take in, just to break even. Not pay the employees, or keep the lights on, or make any profit. That's $11.88 just to break even. So if they continued their $9.99 plan, they would be losing $1.89 per month, per customer... all ten million of them. Now how long do you think Netflix would be in business if they lost almost $19 million dollars each month?

So here's how the profit from their pricing plans today, versus what they're going to and why they have to do it:
subscription type streaming cost for 12 movies postage cost for 6 movies monthly subscription fee profit per subscriber
old all inclusive 12 x $0.05 = $0.60 6 x $0.88 = $5.28 $9.99 $4.11
if they continued old all inclusive 12 x $0.55 = $6.60 6 x $0.88 = $5.28 $9.99 $-1.89 LOSS
new streaming only 12 x $0.55 = $6.60 $0.00 $7.99 $1.39
new DVD only $0.00 6 x $0.88 = $5.28 $7.99 $2.71
both streaming and DVD 12 x $0.55 = $6.60 6 x $0.88 = $5.28 $15.98 $4.10

So if you were to sign up for both packages and fork over $15.98 to Netflix instead of the $9.99 you are now, they will actually making the same profit each month ($4.11 vs $4.10) that they are today. Netflix is not not jacking up prices to cornhole their subscribers, they're simply passing their cornholing on to us. If you want to blame someone for the price increase, blame Hollywood (receiving 82% of your subscription fee) and their $100 million dollar movie budgets and actors that command $25 million per film, or the postal service (receiving 66% of your subscription fee). But isn't Netflix's fault."
 
I can understand "a" price raise from a particular point of view; but not the path Netflix has taken.

Here is why. Netflix has become one of the largest consumers of bandwidth in the world. I can't remember the exact number, but the % of bandwidth is staggering. So from a networking cost, I understand. But I won't be a loyal customer for the same reason I'm not a loyal customer to Hulu + anymore, the depth of programming available sucks.

Still curious as to exactly "what" can be streamed with the Roku box. If I can make it to a Best Buy tomorrow, I will go and see for me self.
 
Madrox said:
From Ehowa.com, makes some sense out of it.

"Netflix's current pricing plan: The $9.99 I pay each month which buys me unlimited streaming of their movies, plus as many DVDs as I would like each month, but only 1 DVD out at a time. They offer 2-3-4-etc DVDs at a time plans, but eh, most of the stuff on DVD that I want to watch is pretty eclectic and only comes along every so often, so so why bother.

Netflix's new pricing plan: it will cost $7.99 for unlimited streaming, plus an additional $7.99 for the 1-DVD at a time plan.

Although existing customers are grandfather in until September 1st, obviously my first reaction to this gigantic rate hike was to have an aneurysm and vomit all over the place. But being the empathetic soul that I am, tried to look at this from Netflix's point of view. What prompted such a drastic shift in their priving scheme? Well, it's a two folded problem. First, let's look at the new challenges that now face their streaming side of the house.

When netflix first started streaming, the likes of Hollywood folks such as Stephen Spielberg, Michael Bay, and James Cameron weren't entirely sure if streaming movies was just a passing fad or not. So when Netflix approached them asking to license their media, eh, it was more of an experimental gestures on Hollywood's behalf. In 2010, the cost for Netflix to license all of their streaming movies was around $180 million dollars in fees paid out to Your Favorite Hollywood Entity. But with DVD/Blu-Ray sales down, now Hollywood sees that streaming media is indeed the way of the future and with more streaming players in the market (Hulu, Amazon, Apple, Google), rights to streaming media are becoming a rather lucrative commodity. What cost Netflix $180 million in 2010, is expected to cost them $1.98 BILLION in 2012. For those of you keeping score, that's an ELEVEN fold increase in licensing costs.

Now let's look at the mail-order DVD rental side of the house -- which I just want to go on record as predicting to die off within five years. Anyway, when Netflix first opened their doors back in 1999, the cost of mailing out one movie was $0.33 each way. Now twelve years later and it's $0.44, that's a 33% increase in costs. So every time Netflix mails me a movie and I sent back to them in their pre-paid envelopes, it costs them $0.88. Where I live, the turnaround time for a movie is two days after I order it -- so if I order it on Monday afternoon, it's in my mailbox on Wednesday afternoon. Let's say I watch it that night, and mail it back on Thursday -- if I get it into a mailbox before 10am, Netflix will receive it on Friday and mail me out another movie that afternoon. Lather, rinse, repeat. Turn around time for a movie: 5 days. Number of DVDs I can get mailed out in a 30 day period: 6, although 7 isn't unrealistic if I'm quick about getting the movies back out the door. But let's use 6 DVDs per month x $0.88 per DVD (not including their purchase price) = $5.28 in postage costs per month. Subtract that $5.28 from the $9.99 I'm paying now and Netflix gets paid $4.71 to let me stream their entire movie collection.

In 2010 it costs Netflix about $0.05 to stream a high definition movie, and predictions are their licensing fees for streaming media are going to increase to eleven times what they are now, it will soon cost them $0.55 to stream a movie to your living room. Let's say you only stream 3 movies per week -- that's 12 movies per month -- equals $5.28 in postage fees + $6.60 in licensing fees = $11.88 Netflix needs to take in, just to break even. Not pay the employees, or keep the lights on, or make any profit. That's $11.88 just to break even. So if they continued their $9.99 plan, they would be losing $1.89 per month, per customer... all ten million of them. Now how long do you think Netflix would be in business if they lost almost $19 million dollars each month?

So here's how the profit from their pricing plans today, versus what they're going to and why they have to do it:
subscription type streaming cost for 12 movies postage cost for 6 movies monthly subscription fee profit per subscriber
old all inclusive 12 x $0.05 = $0.60 6 x $0.88 = $5.28 $9.99 $4.11
if they continued old all inclusive 12 x $0.55 = $6.60 6 x $0.88 = $5.28 $9.99 $-1.89 LOSS
new streaming only 12 x $0.55 = $6.60 $0.00 $7.99 $1.39
new DVD only $0.00 6 x $0.88 = $5.28 $7.99 $2.71
both streaming and DVD 12 x $0.55 = $6.60 6 x $0.88 = $5.28 $15.98 $4.10

So if you were to sign up for both packages and fork over $15.98 to Netflix instead of the $9.99 you are now, they will actually making the same profit each month ($4.11 vs $4.10) that they are today. Netflix is not not jacking up prices to cornhole their subscribers, they're simply passing their cornholing on to us. If you want to blame someone for the price increase, blame Hollywood (receiving 82% of your subscription fee) and their $100 million dollar movie budgets and actors that command $25 million per film, or the postal service (receiving 66% of your subscription fee). But isn't Netflix's fault."
Click to expand...

I see your point, but it was implied that the previous price increase was to address the increased costs of operation.
The service has been lacking lately as well. It's hard to get a new release until 6 months after release. I end up ordering them on demand instead of waiting.
 
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