Misplaced Rage with Netflix

It seems like the entire Internet is raging and fuming about Netflix raising prices on some of their services. Most of it is coming under super-dramatic headlines such as “NETFLIX JACKED UP PRICES 60% OMGWTFBBQ!!!” Naturally, this rage is not only misplaced, it’s totally blown out of proportion.

The skinny is that Netflix has decided to break up the entry-level tiers into “streaming only” and “one DVD at a time”, each priced at $8/mo. The tier that includes both of these will cost $16/mo instead of the previous $10/mo. Some of the other tiers will see pricing changes as well. I’m not saying that I’d be happy with the increase either, but nobody is taking the time out to actually understand why it’s happening.

In short, blame the programmers. All of the studios conspired to shut Netflix ( Show Box and Redbox) out of the new release DVD rental cycle while giving an exclusive to Blockbuster, a dying company. (Why there hasn’t been a restraint of trade suit about that is beyond me, but I digress.) On top of that, streaming prices have been going higher and higher with even more restrictive terms of use. Netflix made a pretty smart decision here: split out the streaming and disc rental so you only pay for what you want and use while trying to recoup some of these increasing costs.

Of course, this rational thinking and parsing of the news from the last several years just isn’t flying with some people. OUTRAGE! ANGER! HULK SMASH! CANCEL MEMBERSHIP! Except that for all of the carping, do you think you’re really getting a bum deal with Netflix? Hulu charges 25% more than Netflix for a streaming-only package, yet they arguably deliver a lot less content. Amazon Prime? Sure, it’s pretty cheap ($6.58/mo), but with just 5,000 total titles (including TV episodes), the price for the selection isn’t really worth it. Unless you were already buying a bunch of stuff from them with one-day shipping (and be realistic, you were using the freebie shipping the same as the rest of us), you’re not getting a lot for it. With so many services like Movie Box coming to market, it’s obvious some changes are going to take place, people think that the internet is a permanent resource, we need to relax our expectations a little.

Where the anger should be directed is at a video market so dysfunctional that instead of adapting to the kinds of business models that Netflix introduced, they instead try to figure out how to get a few more precious drops of blood from the turnip of selling overpriced discs of movies long ago monetized and renting movies for a hundred times their actual cost to deliver. Netflix can only do so much to control the upstream pricing before the content producers pick up their toys and go home. In a way, this is the same dilemma that every video distributor, including cable, satellite, and IPTV companies, faces on a daily basis. Where’s the outrage that they jack up your prices semi-annually while Netflix held the line for several years?

Netflix is still offering a pretty dang good deal. If I had the time to watch the discs and could stream on my first-gen Apple TV, I’d still have my subscription. Sure, be angry, but be angry at the right people.

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