Netflix Testing $4.99
More price testing by Netflix. Matthew discovered this offer via Yahoo! Mail:
Here's the list of plans when you click on the banner:
It looks like they're using the $4.99 price to get people to check out the service, with hopes to upsell them to the higher-level plans. I wonder what percentage of customers that subscribe to the low-cost plans upgrade to the 3-out or higher plans?
Even though the $4.99 plan is limited to two rentals per month, at $2.50 per rental it's still half the price of my local video store.
It may also be a way to let people keep their account "active" when they are going through a period where they are short of spare time for movies.
Posted by: Hunter McDaniel | February 16, 2006 at 02:19 PM
Again, same old plans, different packaging. They very rarely offer any kind of specials.
Posted by: RAYMOND KNIGHT | February 16, 2006 at 02:37 PM
Wait until the 4.99 plan people get throttled for returning more than 1 movie per month.
Posted by: BenJeremy | February 16, 2006 at 02:55 PM
There is no need to throttle anyone on the $4.99 level, because the plan already has a limit of two per month.
Posted by: Becky | February 16, 2006 at 02:58 PM
I'm waiting for the $3.99 per rental plan. They can call it the Blockbuster Video Store plan.
Posted by: Becky | February 16, 2006 at 02:59 PM
Guys,
They are offering these low rates to hit revenue projections and, therefore, please their shareholders. As much as people want to ignore it, Blockbuster.com is attracting converts and new subscribers since they price match Netflix PLUS offer so many in-store rentals at no additional price.
Posted by: Tom | February 16, 2006 at 03:24 PM
That's right Tom. BB offers something that NF never can (well I guess they *could* but not without a huge investment), brick and mortar access to the new release movies.
For some those 4 in-store coupons won't mean a thing. For others who drive right by a brick and mortar BB every day they are huge!
If you take my BBO membership monthly cost of $19.13 less $3.99 for each of the in-store coupons that leaves only me only paying $3.17 per month for my online movies.
If I get my usual 12 that gives me a per movie cost of 26.5 cents. If I get real lucky and get another turn during the month for 15 (rarely, but it has happened early in my membership), that lowers it to 21 cents per DVD.
Posted by: Rusty Ramrod | February 16, 2006 at 04:31 PM
Erm, Becky, that was intended as a joke.
However, at a rate of two per month, I can see somebody returning a movie the day after they get it, and having to wait a week to get the next - because Netflix considers the return too fast, then "throttles" him down. Could happen, with the current idiocy in their policies.
Posted by: BenJeremy | February 16, 2006 at 06:15 PM
OK, let me do the math. For $4.99 I can get 2 movies per month, one at a time. But for $9.99 I can get UNLIMITED movies one at a time. Well, since I'm already on the 1 Out plan for $9.99, let's see how well I'm doing. The movie that went out in last Friday's mail was logged in at Netflix the following Tuesday. My next email from Netflix informed me that the next movie in my queue would ship on Wednesday. It did ... with an expected delivery date of Saturday. That's right folks! A week between movies! Four movies a month! (or 4.3 a month for you pencil neck geeks) Isn't UNLIMITED great! ;-)
Posted by: E. Craig Crawford | February 16, 2006 at 07:21 PM
I'm on the "1 Out" plan currently and am getting 6 or 7 discs per month.
Posted by: Bart Smith | February 16, 2006 at 07:29 PM
It would be helpful if people would identify where they live (City/State) when describing personal experiences re delivery times. This might also explain delivery speed discrepancies between NFLX and BB. For instance, BB has a distribution point in Ventura, CA, which makes for much speedier deliveries to people living from Ventura to Santa Barbara to San Luis Obispo. NFLX's only distribution point in So. Cal is Santa Ana (BB also has a dist. center there). I imagine that NFLX similarly covers areas not covered by BB.
Thus, some of the variation in customer experiences may be explained simply by where you live vis a vis the distribution centers. I mean, simply living near one isn't a guarantee of a quick turnaround, if it is a small distribution center, and most of your choices are coming from elsewhere.
For this reason, I feel I can fairly make NFLX vs BB comparisons.. My DVDs are returned to a PO Box in Santa Ana, both using the same zip code.
Posted by: ruk | February 16, 2006 at 08:42 PM
"That's right folks! A week between movies! Four movies a month! "
That is the deal for everyone. I sed to get 15 movies on my 3 out plan. eight months ago it went to 12. I cancelled and signed up and it went to 15 per month for the first three months. So I cancelled again ..back up.
Loyal customer? You get screwed.
Posted by: murphyslaw | February 16, 2006 at 09:18 PM
This pricing option is NetFlix's first step toward transitioning to a fixed, per rental, pricing model, just like the traditional Brick and Mortar store pricing. Why? It's called revenue stability, something Wall Street loves and is not possible with the current "monthly unlimited" pricing model - that is unless you "throttle", which is of course what NetFlix is currently doing.
I predict it won't that much longer before Netflix makes it worth our while for all of us to go a fixed number of disks per month plan - all they have to do is continue to tighten the "throttling" screws incrementally every Quarter.
Posted by: CJ | February 17, 2006 at 11:37 AM
Or increase the price difference between the capped and non-capped plans.
The more users that convert to lower priced capped plans, the less money there is to subsidize heavy users, pushing up the price of the non-capped plans, prompted more people to convert, and so on.
Personally, I wish they'd just do it and get it over with.
Posted by: gir | February 17, 2006 at 12:09 PM
"There is no need to throttle anyone on the $4.99 level, because the plan already has a limit of two per month."
Just because there's a limit does not guarantee you will get that much without throttling. They may still delay shipments and deny you new releases, if you're trying to rent the limit. They would say this is for your own good, so you don't use up all your rentals in the first week. Their limited plans are a rip-off. Average price per DVD is $2.50-3.00. No, thanks.
Posted by: NetflixShill | February 17, 2006 at 08:15 PM
I am a former Netflix and Blockbuster customer. I saw the $5.99 ad banner and came back to hackingnetflix to see what it was about. I subscribed.
With 3 movies a month, I won't have to worry about bad turnaround, eh?
I can't serve as a test case for new release availability on the limited plan because I seldom want new releases, and new releases rent locally for a buck anyway.
Posted by: somenobody | February 20, 2006 at 12:51 PM
Does anyone know where you can find these banners for the $4.99 or $5.99 rates? It is impossible to just visit there homepage and find them. I also tried calling and they said that the deal can only be had by finding the banner.
Posted by: Rhinosaurus | February 22, 2006 at 01:06 PM
Here's another Netflix offer from a Yahoo mail banner ad:
1 DVD at-a-time
Limit 2 per month
$6.99
2 Week Free Trial!
Not as good as the other Netflix offers that have been in Yahoo mail banner ads.
Posted by: somenobody | February 23, 2006 at 04:18 AM
They must be trying a variety of price points to see where they hit the point of diminishing returns.
Posted by: gir | February 23, 2006 at 07:57 AM