Netflix Testing Lower Prices

Video Business is reporting that Netflix is testing lower subscription prices. "[CFO Barry] McCarthy said that Netflix had no plans to raise its subscription fees if Blockbuster raises its fees." Blockbuster is rumored to be exploring raising subscription pricing, and it would seem that Netflix is looking to start another price war.

One alert reader has already seen new Netflix pricing:

1 DVD at a Time - Unlimited - $7.99
2 DVDs at a Time - Unlimited - $12.99
3 DVDs at a Time - Unlimited - $15.99

Comments

[Eric]

GOOD!

[Chris]

This is good news, though I wonder if they'd adjust the $2/dvd/month profit throttle. I'm paying $15/mo for 2 out at a time, and I just started getting throttled for watching almost 2 per week (maybe 7 in a 4 week span).

If the pricing changes affect current customers, I'd get throttled sooner or have to pay an additional $1/mo for the same I get now.

I'm not complaining, just observing and speculating. Please don't jump down my throat because you think netflix is so l33t. :-)

[SykoBoy]

...and the increased throttling comes for free!

How long is the period of time before it can be called 'throttling"? a week? a month? I'm asking because you say your are 'starting to get throttled'. I haven't experienced "throttling" but have had service slow down for a week or two only to pick right back up. I always chalked it up to postal delays or just life.

[Matt]

Chris has a good point. They'll still manipulate your shipments so that you don't get discs for less than $2 a piece.

Netflix should have a plan that has NO throttling, and they bill you at the end of the month $2.00 or $2.50 for each disc they shipped that month. You could choose how many discs you want out at a time.

[Rick H]

Why is NFLX allowed to use the word unlimited? Probably because the nitwits at the FCC, or whoever, are nitwits.

Why doesn't NFLX name the number of total films, even if it is a range of something like 3 to 6 for the cheap plan, and then stick to it. They could finally appear honest. Maybe they are not. But the top officers sure are getting rich, now aren't they. I don't think they really love us.

[Marc]

I'm curious where they found this new pricing info. I clicked on the change my account and the prices are still the same. I even signed out and went to the start a free trial and the prices are still the same.

[Mike]

If it wasent for BBO, they would be testing higher fees. Anyone remember $23 bucks for 3 movies? Thank god for BBO!!!!!

[Morgan]

Rick H:

Netflix no longer advertises unlimited rentals.

[greg]

yes, where can i get the 15 dollar deal?

[Matt H.]

"Netflix no longer advertises unlimited rentals."

Yes they do. I don't currently have an active membership since I cancelled in Sept. when I returned to school, but when I go to the restart account page NF still uses the word UNLIMITED on all but the fixed number plan (2 at a time 4 a month). Check the website for yourself.

[Morgan]

I was under the impression that part of the class action settlement was they could no longer advertise services as unlimited. None of the banner ads I've seen advertise unlimited service and neither does the main page of the Netflix site, but sure enough, you're right. The sign up page does state that rentals are unlimited.

[Fred Thompson]

@Morgan,

Look under your account page:
"Membership: 3 at-a-time (Unlimited) Plan (Change)"

Also look at the plan types. They all say (Unlimited) except fot the "2-at-a-time: 4-out" plan.

Also in the "Terms of Use" under: How Our Service Works, see under "The Number of DVDs You Can Rent"

"In our unlimited plans, we do not establish a monthly limit on the number of DVDs you can rent, however, the actual number of DVDs you rent in any month will vary based on a number of factors (See "Allocation, Delivery and Return of Rented DVDs" below)."

So basically, they still use the term "unlimited" - they just define what "unlimited" means - as far as a NF subscriber.

So, where exactly is this new pricing seen? I just took a look at my 'change' screen - eh, I expected to see netflix not offer me the reduced pricing. I tried going to the new user sign-up page, and they offered the same pricing I'm on now (then again they probably tracked my IP and knew not to offer me a reduced rate).

I'll check it from a browser I never use at work today and see if I see the lower prices. Also, amusingly enough on the new-user signup page, above all but the 4-a-month plan the word "Unlimited!" appears above the plans you choose when signing up.

I imagine they may even be doing geo-targetting to only offer it to one region at a time...

[Rick H]

RICK H: HERE'S THE DEAL (FORGET ALL THE OTHER NOISE, THIS EXCERPT BELOW FROM MOTLEY FOOL SAYS IT SO WELL)

From Motley Fool

Vanishing Values
By Chuck Saletta
November 17, 2005

"...Unfortunately, at this point, the opportunity to profit from the market's discount on Netflix is long gone. Like so many values before it, that chance went to those who were prepared to make their move during a short window...
...Do you honestly believe that Netflix is more than a merely "OK" business? Go ahead and send me your criticisms. The fact is that Netflix, while a far more nimble company than its nemesis Blockbuster, faces pressure from all sides. On one hand, video-on-demand services allow cable operators like Time Warner (NYSE: TWX) and Comcast (Nasdaq: CMCSA) to give customers a way to rent what they want when they want, without waiting for a disc to arrive. And with discount retailers like Wal-Mart (NYSE: WMT) constantly driving down the price of purchasing new DVDs, the savings that come from renting are rapidly evaporating. Things are tough, and they only look to get tougher as competitors start to take advantage of their economies of scale..."

[Aron]

Rick, you will find that no one here has an acute investor's mind. Good luck with your short.

[Eric]

Rick, I made my 178% off Nextflix then sold, Then I bought Blockbuster stock.

Hooray! Save two dollars and get an extra DVD throttled every month for free. What a deal!

"Netflix no longer advertises unlimited rentals."

BULLSHIT! Bullshit! bullshit!

"With our most popular plan, 3 at-a-time (Unlimited), you can rent as many DVDs as you want for just $17.99 a month plus any applicable tax."

http://www.netflix.com/HowItWorks?hnjr=8

[wheelie]

Bull Shit! on the lower prices.

[Ghost Dog]

It's too bad to hear that Netflix continues to Throttle.
I had been thinking about returning to Netflix.

Shill Butt.

"I haven't experienced "throttling" but have had service slow down for a week or two only to pick right back up. I always chalked it up to postal delays or just life."

you are living in a dreamworld. I deal with a huge amount of postal work. Even the term "postal delays" is a crock nowadays. Variances in mailing times are nearly nil now even during the holdiays.

"you are living in a dreamworld. Even the term "postal delays" is a crock nowadays. Variances in mailing times are nearly nil now even during the holdiays."

Any time a company tries to blame the post office, you know they're lying. There is a little variance depending on when and where you send it. It's faster to go inside the main post office than to drop outside some local branch. I haven't had one lost DVD at Netflix out of hundreds sent and returned. But BB lost one recently and NicheFlix lost one they claim. I believe in both cases it is the company's fault or they are lying. There just isn't that much chance of theft from mail box to mail box. It should be a red flag any time a company claims not to receive your movies in a timely manner. If they can't deliver in the same time they do during a trial, assume they're throttling.

[Becky]

My brother worked in a USPS distribution center. He said there were bins full of mail that got lost or mangled by machines. I do not say the USPS is always to blame. Neither do I say that the USPS is never to blame. But the USPS can be responsible for a certain amount of delays. I know that at least one day per week, my USPS carrier is a substitute. Sometimes the substitutes make mistakes, and misdeliver mail, because they are unfamiliar with the route.

People are human. Even if human error is only 1.5%, that would mean 750 Netflix discs per day would be messed up somewhere along the way from each distribution center which sends out 50,000 discs per day. That's enough to account for all the disgruntled customers on the Web.