Dear Netflix, particularly the person who drafted your recent customer letter informing customers of your 60% price increase and the boneheaded bean counters who thought up this price increase:
Are you a bunch of idiots?! For all intents and purposes you killed Blockbuster. Redbox and other competitors were desperately trying to catch up. You practically had the video market cornered with your DVD/streaming combo service. Netflix equaled family fun in many Americans' eyes. The future was yours and what do you do? You open the door back up for short term profit gains and allow competitors to slip back in. What are you, on dope?
While it is obvious that the studios will be requiring more money (as the missing online Sony content demonstrated) for online rights making a price increase inevitable when contracts expire, you, Netflix , at the least, seemed to have not taken human emotion into account when announcing your price increase. For example, people love a bargain. If you really wanted more money, you could have raised streaming or DVD only to $11.99 and then said for just $4 more you can get the other service. Instead, by making both streaming and DVD the same price, you have made it much easier for people to drop one service and thereby give Netflix less money and open the door for competitors (Redbox, Amazon Prime etc) to come in.
You, Netflix, may give me more then anyone else but I, like many, don't need more. I don't have enough time in a month to watch the 8 DVDs (still have cable) we'd have to consume to be competitive with Redbox, located just across the road in my supermarket. I've been having a blast watching old TV shows and movies via streaming, especially the TV shows, which fit nicely into my free hour or so in the evening (blessings of parenthood). We only ordered DVDs, which tended to hang around for weeks until we opened them, for movies not available on streaming (and the more annoying missing episode from a TV series available via streaming). Now Redbox will be getting the $2 from my price decrease for the one or two DVDs we watch a month. Additionally, now that I will no longer be tethered to Netflix for DVDs, I may it find it more economical to go to one of their online competitors if I find their prices and content to be more to my flavor (even if I just cancel Netflix for a few months and then go back).A $4 difference in price for keeping both services may have kept me more loyal.
Then, finally, there is the backlash factor. While, again, I could understand a price increase, whoever composed that initial letter stating that the same price for both services is a teriffic deal insults the intelligence of Netflix's customers. I think most of us are savvy enough to read between the corporate lines. You don't think we can't do math (probably not a bad assumption given education standards in some parts of the nation but that's another blog)? Come on! How about a little honesty like we need more money for our studios or online rights. Heck, I may have settled for a we need more money for our stockholders to continue to grow our business. But that letter was so insulting.
Many times, when I have been insulted by a business, my reaction is to drop a service that thinks so little of me, even if they do remain superior to the alternatives. I suspect that much of the outrage we've read are from people who feel the same. Your dividing of the DVD/online services reeks of corporate greed, which is your right in this capitalistic society. However, capitalism works both ways. Hope your bean counters planned what that might do to the Netflix stock price.
In summary, you may not owe me cheap movies, but I don't owe you my continued business. Perhaps this is your way of forcing the studios to step up and increase the quality and quantity of materials available for online streaming sooner rather than later, making them kill the DVD early in lieu of letting them die naturally like the 3.5 inch floppy disk, music CD or VCR tape. If so, angering your customers in this way while killing your golden goose seems a strange way to accomplish your goal. Speak to you again around August 31st when I cancel my DVD service.
Damaged Dude
PS - Hello Redbox. It's been a long time.
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