NY Time's David Pogue on the Netflix Price Increase & Qwikster

David Pogue wrote an interesting essay on the price increase and Netflix-Qwikster news for the NY Times.

At the reasons behind all of these shenanigans. Yes, of course, fewer people use DVDs, but come on, they haven’t all fallen off a cliff simultaneously.

At why Mr. Hastings thinks it helps to say “I messed up” without actually making things right. That’s one of the hollowest apologies I’ve ever heard. It’s lip service. It’s like the politician who says, “I’m sorry you feel that way.” You’re not sorry — in fact, you’re still insisting that you’re right.

In the end, though, what makes me unhappiest is how calculated all of this feels. In July, a spokesman told me that Netflix had already taken the subscriber defection into account in its financial forecasts.And sure enough. When I tweeted that Netflix had lost one million of its 25 million customers, @npe9 nailed it when he wrote:

“It damages their brand and images, but 24 million customers paying $16 is still better than 25 million @ $10. Increases revenue by >50%.”

Thanks to Martin for sending this in.

Comments

[Robotskilledyou]

They lost 1 million customers full stop, but I can't see many people sticking with both Instant and DVDs. People that don't have cable and just want to watch TV shows and B-movies will keep Instant. People that enjoy classic films and special features/commentaries will stick with DVDs.

[Tim Silvers]

I figured the studios were going to kill Netflix with their shenanigans: delaying content for 28 days (talk of delaying longer), providing Netflix with feature-only discs (no more special features), or more streaming content deals which give subscribers more content, with a smaller percentage of content we actually want to watch. But alas, I may have been wrong. Reed's apology was the proverbial punch to the gut after what customers already felt was a blind-sided blow. Netflix (Qwikster, dumb name) may have just hurt themselves beyond repair.

[gir]

"It damages their brand and images, but 24 million customers paying $16 is still better than 25 million @ $10. Increases revenue by >50%."

That is so inaccurate. They had 25 million customers, but how many were paying $10? How many of those that were paying $10 are now paying $16. How many dropped from 3-out to 2-out, or from 2-out to 1-out, to keep their charge close to the same? I think they'll end up getting very little additional revenue.

And I don't think they'll be saving much in costs either. How many people who decreased their plans will work hard to turn those plans faster and get the same number of disks each month.

[gir]

PS. I think the reason (and timing) for the split announcement is that they realized the revenue increase falls far short of their projections.

[RJM35126]

This quote is just BS. This assumes that all 25 million customers were on the 1& streaming plan and thats demonstrably false.

But the point is well taken. NF is a public company in business to make a profit. Just because we got an exceptional deal for many years doesnt mean they can do it forever without raising prices.

My biggest issues are the non-integration, even for cusotmers of both. And the STUPID new name that 70% of people cannot spell correctly.

"24 million customers paying $16 is still better than 25 million @ $10."

[Take it Easy]

24 million paying $16? All the subscribers are paying for both dvds and streaming now?

[Karen Lee]

Some of us who were 1 DVD plus streaming dropped streaming altogether and increased to 3 out plans, same dollar value.

I did because streaming is difficult, there wasn't much value in it to me due to the content and I'm much more interested in things they did not have streaming.

Having said that I am turning discs as fast as possible and I am definitely getting more bang for my buck than I was before.

Also, not knowing how much time the newly named disc by mail service will be with us I'm loading up while it lasts.

When it's gone then I'll make decisions about BB or usenet or torrenting.