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Netflix once again screws over its customers

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J_K_M_A_N:

--- Quote from: pinballjim on July 15, 2011, 03:33:10 pm ---...It's still cheap enough we'll keep it around at least until my wife gets through Quantum Leap.   :P

--- End quote ---

We love that show. I have all 5 season on VHS recorded from the Sci Fi channel. :) Too bad I don't have a VCR hooked up anymore. (I have the DVD's also)

J_K_M_A_N

Donkbaca:
Yeha, but people are LAZY that is why they have those try it free for three months! deals all the time, people are too lazy to cancel. That's part of what netflix so succesful - laziness - people don't want to drive to the video store if they just have to check their mail.  1% may leave, but many more will still come on board...

DaveMMR:

--- Quote from: Donkbaca on July 15, 2011, 03:28:17 pm ---Everybody says they will drop it, 99% of people won't.  I love how people are "protesting" the increase by liking a page on facebook or some other nonsense.  yeah, facebook pages, I am sure Netflix really cares about facebook pages.

--- End quote ---

From what I've read, they took into account a certain percentage of defection when coming up with the new pricing.


--- Quote from: Donkbaca on July 15, 2011, 11:21:44 am ---Way more profitable to ship movies.  You don't need to build a secure network to house the IP.  You probably have some sort of licensing agreement with the IP holders so that they get some sort of royalty per play, or you get to have it unlimited for a set period of time, which means a lot of overhead just to keep up with it.  The DVDs infrastructure is already in place and a LOT of people only watch a couple movies a month.  Heck I have had the same netflix movie sitting on my console table for the last 2 months.  With streaming its a constant barrage, people will even watch utter garbage just because its available.  

--- End quote ---

But I'm curious how that network costs for streaming compares to shipping costs, maintaining a staff to ship these discs (salary plus benefits), and not to mention having to obtain numerous physical copies of each movie - for EACH shipping station across the country.  I'm not saying you're wrong since I do not have access to actual figures on any of this stuff, but it seems to me, even with infrastructure costs and licensing, streaming would be less of a financial burden - especially considering you're eliminating the USPS and warehouses.

Donkbaca:
If you look at their SEC statements, specifically their latest 10-q you can see that "fullfillment expense" or the amount they spend to actually stuff and mail out DVD's is only 8.5% of their revenues, whereas subscription expense; - the cost to buy DVD's and license streaming content is around 52%.  Over the last year or so, their net margins have increased due to the increasing expense of going to streaming.  Whereas in a DVD, where you make a one time purchase of the DVD, streaming consists of licensing agreements and royalties that are likely paid on a per-play basis or on an unlimited use for a period of time basis.  That is why stuff rotates in and out of streaming all the time.  Add to it the fact that there are many, many more people that used the dvd service, and the fact the market for dvd's is many times that of streaming make dvd's much more profitable because there is a bigger user base to allocate the cost of business to.  Streaming is expensive.  you have to keep track of multiple licensing agreements, buy server space, band with and make sure everything is secure and backed up.  The people shoving dvd's in a netflix envelope are cheap, the people maintaining your streaming content are expensive.  Add to it the fact that there are far fewer streaming users, and on a per-customer basis, Netflix is making WAY more money off their dvd customers than their streaming ones.

pinballwizard79:
Maybe the 25% reduction in the value of the USD impacted global investors & shareholders of netflix so this price hike is organic due to content & also forced due to our fiat currency.

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