What’s the latest price hike that has consumers up in arms? No, it’s not gas prices or the cost of a gallon of milk.
It’s the price of movies.
Netflix, the largest source of internet traffic, announced Tuesday that their DVD-by-mail and instant streaming plans will be offered as two separate services. In order to get both options, new members will pay $15.98 a month, or $7.99 if they choose either of the plans individually. For existing members, the changes will go into effect on September 1.
As many have noted, $15.98 is a 60% price jump from the previous $9.99 plan for one DVD per mail and instant streaming.
Why the change? Netflix claims it’s to offer customers a choice between the two individual plans so that those that just want DVDs by mail aren’t paying the additional cost for instant streaming, and vice versa. On the business end, it’s to ensure they continue to be as profitable as possible as one of the biggest entertainment services on the market.
In the end, and in my opinion, I just don’t think this price hike is that big of a deal. Here are three reasons why:
1. The instant stream offerings continue to improve.
Many customers comment that the instant stream selection is poor, but I believe that to be far from the truth. Netflix constantly adds newer and better selections to the mix. Since the beginning of the year, the company has announced adding more content from MTV Networks, Marvel, anime, CBS, and even a little something for the Gleeks out there. They’ve even extended their streaming capability to some Android devices. I can only imagine that the offerings will continue to improve as Netflix will want to keep its instant-streaming customers happy.
2. It’s really not that much additional cash.
While the price hike seems extreme for those who enjoy the luxury of basement-price movie deals, realistically, it’s not that bad. If $7.99 of the $15.98 total goes toward instant streaming, as Netflix suggests, then the other $7.99 goes toward DVDs via mail. If the majority of customers receive one new DVD per week (probably a conservative guess), that’s just $1.99 per DVD.
That’s the cost of a cup of coffee. And not a fancy latte, either; just a plain, drip coffee. As consumers, we’re absolutely entitled to complain about price hikes we find unfair, but we can also pick our battles on what’s really a deal-breaker for our budget.
3. The alternatives aren’t any better.
Let’s check out the other Netflix-like options we have to choose from:
Redbox: With this service, your DVDs, Blu-ray Discs and video games come out of vending machine-link kiosks. Since it’s likely customers keep their DVDs longer than one night, Netflix is cheaper than Redbox, which charges $1 per night. Plus, with Netflix, you don’t have to leave the comfort of your home, except to walk to your mailbox.
Hulu Plus: This options gives you access to television shows in instant streaming format. At $7.99, Hulu Plus is half the cost of your Netflix DVD plus instant streaming package, but it’s missing a key feature that you get with Netflix: movies. Unless you’re strictly a TV viewer, it’s like comparing apples and oranges.
Blockbuster: Their DVD by mail program is more expensive at $11.99 per month for just one title at a time, compared with Netflix’s $7.99 for the same plan. The only leg-up Blockbuster has on Netflix is that they receive new releases nearly a month earlier. In my opinion, it’s not worth it unless you really just can’t wait an extra month to see the latest releases.
Bottom Line: As of April, Netflix had 23.6 million users, according to CNN Money. That’s more than 7% of Americans. Something tells me that, despite the price hike, Netflix isn’t going anywhere anytime soon.
If $16-a-month is going to break the bank for you, you probably shouldn’t be paying for a service like Netflix in the first place. Instead, try the DVDs at your local library, which are all free, or the occasional Redbox rental.
Have a Karmic day,
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