Goodbye for now, Netflix!

This might be old news by now but here's my take...

It Could Be the “CATALYST”… for Higher Bills

The recent Netflix price increase on their streaming plus DVD rental just left a bad taste in my mouth. The thing is I don't watch much TV as I have an aversion to five minutes or more of commercials in between shows. Netflix really offered a great alternative. Before streaming was introduced, I was on their 3-DVD plan but cut back to 1-DVD when I ended up holding on to the DVD’s for weeks, even months. My wife and I were seriously considering downgrading our cable service to the very basic and just relying on Netflix streaming for occasional home entertainment… at least that was the plan until the news of the increase.

Netflix is really hoping that everyone completely adopts streaming videos. Analysts say it may be the catalyst for better deals with the studios and consequently an increase and improvements in streaming content. But imagine what that would do to the overall internet bandwidth... supply and demand will dictate an increase in Internet Service Provider prices. It will be a double-whammy for consumers who eventually will have to pay a higher price for streaming services AND monthly internet bills. 

On the Corporate Side of Things

You really can't blame Netflix when their philosophies have shifted from pleasing its loyal customers to pleasing their stockholders. I understand there's a cost to doing business but in my opinion, one should expect more from executives who get paid 6 to 7 figure salaries. They should do a lot better and be more creative at the negotiation table with the studios. 

They seem to have taken the path of least resistance making the calculated risk of pissing off "a few" customers. They even went on to justify that the increase isn’t significant, comparing it to the price of a latte as if everyone in the entire world drinks coffee and can’t live without it.

This is how I felt when I read the now infamous e-mail… that I, a loyal paying customer since 2005… am simply an acceptable loss.

If this move was fueled by the need to have the ability to buy more content, what they’re missing here is that Netflix still did not gain any negotiating leverage. Potentially, they will just have more cash to show that they will be able to afford the increase in licensing fees the studios dictate. What happens then on the next contract re-up? Netflix will still be as susceptible to a contract rate hike which in turn will get passed on to consumers… AGAIN and AGAIN and AGAIN.

Further, if this service turns out to be extremely lucrative, which I think is trending that way… what's to stop the studios from banding together and creating their own brand of streaming products, ultimately "cutting out the middleman"? After all, they already own the rights to the movies, eliminating the need to pay their lawyers to type up contracts. Also, the cable companies they already own will be more than happy to finally be able to remove what used to be the thorn on their side for quite a long time.

Netflix v.s. Cable

To the people in the “Netflix is still better than cable” camp… you can't compare Netflix versus Cable apples to apples. 

In times of calamity, whether it is war, weather, or the white house, you turn to your favorite news channels for the blow by blow account as events unfold. 

I don’t see sports fans clicking the “Watch Instantly” button to see live telecasts of the NBA finals or the Superbowl, or Manny Pacquiao as he takes on Godzilla.

So if I’m made to choose between the two, cable still wins despite the price gap. It just has more to offer than B-movies, old popular titles and TV shows. Netflix may improve as others predict. In the meantime, I’ll put my money where I perceive I’d get more value. 

When Everything Goes Up In Price, the First Thing That Gets Cut From an Average Household’s Budget Is Entertainment Expenses

I've already decided to cancel my subscription for now. I'll probably reconsider down the road if or when I hear that the selections have gotten better. In the meantime, I'll settle for Redbox and the local library for my DVD fix. By August, I will have $11.00 extra spending cash to buy a cup of latte, even though I do not drink coffee.