Netflix Raises DVD Rental Cost, Pushes Us To The Future

November 22, 2010

So Netflix introduced a streaming-only plan at $7.99 / month, while also bumping up the prices of their one and two all-you-can-rent DVD plans by a dollar a piece. If you’re renting three DVDs or more at a time, the price jumps by three dollars or more.

My knee-jerk, frugal geek reaction was negative – really bugs me when companies raise fees during a recession.

But an honest look at how I’m using Netflix right now indicates much more use of the streaming service and less DVDs. I’ve been watching old Anthony Bourdain episodes while the spouse has gotten into All Creatures Great And Small, both on Netflix Watch Instantly. My instant queue has over a hundred titles, while the the DVD queue has: eight (!). Plus nearly a hundred movies saved locally, through the DVD queue and a Handy program that I saved for later and haven’t gotten around to watching yet. I’ve also been watching a lot of older movies instead of newer releases.

So if I’m honest with myself – I could drop the DVD rentals completely, go with streaming-only, and have literally months of entertainment for the foreseeable future. But more likely, I’ll just drop down from our current two DVD plan to one, saving several dollars per month. I think a lot of current customers, once they hear about the price adjustments, will drop their DVD quota by one a month as well. And ultimately that is what Netflix wants, as they’re in a transition from DVD rentals to streaming, replacing the mail with the Internet for delivery.

The end result: I adjust my plan, save money, Netflix sends less DVDs saving them money, and I still have an excess of movies and TV shows to watch, eventually. Was there a problem here?

Note: MG Siegler says essentially the same thing, albeit more succinctly…

Comments

  1. Dave says:

    I’m already at 1 disc and the disc usually just sits on my dresser for a month before I watch it. So I’ll probably drop down to the streaming-only option and if I need to watch something that’s not available on Netflix, I’ll either pay for the streaming rental from Apple or Comcast, or run over to the neighborhood DVD rental store (the old-school way!).

    Progress!

    • In your case the DVDs make less sense; I’ll probably be in that camp as the selection on Watch Instantly improves.

      Yeah I didn’t mention that iTunes movie rentals via the Apple TV balances out the lack of new releases on Netflix streaming, and the DVDs for that matter. It’s often easier to rent a newer flick through Apple TV than add it to the DVD queue and wait a day or more for it to show up.

      I don’t even know where our neighborhood video store is at this point. Two Blockbusters near us went under. I think there’s another one but have never stepped inside. I do know of a few Redbox kiosks however.

  2. JC says:

    Well, the problem is that the Watch Instantly catalog still isn’t on par with the available DVD titles. It’s better than anyone else’s streaming catalog, but for people who like to watch the more obscure titles, some classics, some lesser-known foreign films, independent films etc., it’s still too early to go all-streaming. It’s getting better, even on iTunes, but the real beauty of the Netflix DVD catalog is that you can get literally ANYTHING that’s even been released on DVD.

    I agree with you that Netflix is clearly pushing people to watch instantly more and ship DVDs less; but I think a secondary reason for this move might be to help tease the studios into releasing more films for streaming as well. At least I hope so.

    • Yeah, at present, streaming only clearly can’t replace DVDs outright, but that’s why Netflix still has the combination DVD with streaming option for the time being. If you can’t find something on streaming to watch, one always has the rental option as a backup. It’s just that price increase made me realize that backup option is getting a lot less use than before.

      Certainly at some point in the future, Netflix wants to drop DVDs altogether but that’s years away. The gamble on Netflix’s part is that the streaming catalog will improve over time to where DVDs become unneeded, and obviously that takes those reluctant studios to allow streaming rights.