Is Netflix Really the Devil?

DISCLAIMER: If you are not mindlessly deciding to stay in debt, I might not be talking about you. ;)

Are you upset at the recent price hike announced by Netflix?

Is seems a lot of people are lighting the torches and grabbing their pitchforks so they can lynch the once beloved company.I have an idea. How about you get that mad about your debt! Seriously, you should torch IT instead.

Wasn’t it Netflix that saved us from companies like Blockbuster? Wasn’t it Netflix that made it possible to watch as many movies as we could mail off and receive in one month for the price equivalent to two movie rentals back in the day?

I’ll admit, the recent hike forced me to reconsider some things and at first I was a little bummed. Instead of tripping over myself to leave a negative comment on their blog though, I carefully considered how this really effected me. I came to the conclusion that while it always stinks to be told that prices will be going up, the bottom line is that Netflix is still a great value when you compare it to what you’re getting now not to mention what you used to get. I don’t know about you but I used to HATE Blockbuster!

Think back to a time before Netflix, and if you’re honest you’ll realize that you probably spent more for home movie entertainment than you ever will with Netflix. In all honesty though, shouldn’t you be mad at the companies who license the material that Netflix pays for? It has been said that they will be going up from 180 million to almost 2 billion. I read a comment that suggested you be mad at the studios, not Netflix. I agree.

Back in the “long long ago time”, when we would get in our car and burn gas not to mention time, to go to the video store for our home video pleasure, we paid a lot more than we do now. I remember spending more than $30 in a months time easily. Take into consideration the fact that you also had to keep a movie that only took you 2 hours to watch for 5 days, as opposed to stuffing it back in the mailbox to receive a new one two days later.

Am I the only one that paid more than $15 just in late fees some months?

We were (until the price increase) paying about $9 for 1 DVD at a time with unlimited streaming and now we’ll be paying roughly $16.  Ooh geez, let me pick my jaw up off the floor.

We probably watch — roughly — about 4 movies a month on DVD (which would have cost us about $15 back in the day), and I can’t even tell you how valuable we have found it to be to have streaming movies available 24 hours a day.

Now, we’ll be paying $15 instead of $9. We get more than $15 worth of streaming movies if you consider what it used to cost even for old movies. Video stores charged the same for television programs as they did for new releases and you can watch a large range of television shows streaming to your computer or television.

I don’t see what the big deal is personally!

I think we’ve become spoiled, and the word entitled comes to mind as well. I’m willing to pay the price increase because it’s still a valuable service and if that’s what it takes to keep it going, I’m all for it. If you choose that it’s not for you anymore then I understand, but that doesn’t make Netflix a bad company just because they had to make some hard decisions in order to keep Netflix alive.

I think Netflix should take this opportunity to trash the DVD side of the business and offer only streaming with one exception being that since they’re paying so much more in licensing fees, that new releases should be streaming as well and sooner than before. If anyone should be classified as greedy capitalists, it should be the movie studios who control the content that want to charge an arm and a leg to put it on your television set.

Time to wrap this rant up but before I do I need to say one more thing.

For all you people complaining about a $7 increase, I’m curious to know how much you spend a month in interest payments to cover all of your debts. I bet it’s more than $7 easily! Seems kind of illogical to me to be mad over a $7 price increase while you continue to mindlessly run up debt without ever thinking twice about the interest you pay to do so.

You should eliminate your debt payments so $7 won’t cause you to have a brain hemorrhage. Without payments a $7 increase is small potatoes. Just saying…

About Brad Chaffee

16 Responses to “Is Netflix Really the Devil?”

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  1. Shari says:

    I truly enjoy your blog and usually think you’re spot on, but I really think you missed the mark on this one. Sure, prices have gone up with just about everything, and there’s no reason to think that the price of Netflix wouldn’t also rise accordingly. Oh, but wait.They already went up less than a year ago, remember that? Then again, I guess that was small potatoes as compared to this latest nearly SIXTY PERCENT increase.

    “Without payments a $7 increase is small potatoes. Just saying…” Try substituting 60% in place of the $7, then apply it to, say, your power bill, gas bill, etc., and get back to us.

    I’m really, really surprised to see a PF blogger condoning such a ridiculous price increase.

    • Brad Chaffee says:

      Shari, first of all thank you for weighing in, and secondly I knew I was going to take a lot of heat for this one. I just got finished reading around 100 comments where people just didn’t understand that Netflix wasn’t the reason for the price hike, it was the people who wanted more money for their movies that was the reason. They work on contracts and when Netflix originally got those contracts the demand for the service wasn’t as big as it is now, so they raised the price of those contracts A LOT.

      All I’m saying is that Netflix had to make a business decision if they wanted to stay in business. It had nothing to do with punishing consumers or “record profits”, it had to do with business. Do you realize how worthless Netflix would be if they didn’t pay more for the contracts. From what I’ve read they already lost Sony and consequently a lot of their streaming content because of it. When grocery stores raises their prices everyone hates it but most people know the store is not usually the reason. It’s because of economics which for the most part is out of their control. The stores have to pay more therefore so do we. The same can be said about this, except that it’s the movie industry that’s causing the price hike not Netflix.

      Almost everyone (from what I read) is treating Netflix like a greedy corporate devil when Netflix was the reason why home entertainment was more affordable — like $9 a month instead of $30+. With the price hike I will still spend a whole lot less than I used to and I am thankful for that. I think $15 or $16 is a fair price for all that you get but I do agree that it’s unfortunate that the increase came all at once. I know it’s going to affect a lot of people. fortunately for them though, it is entertainment and there is lots of free content online.

      Thanks again for sharing your thoughts. I’m sorry you don’t see how a pf blogger could condone a ridiculous price hike such as this. I simply see it as Netflix tried as hard as they could to keep prices as low as they could for as long as they could, and eventually it came back to bite them in the butt. They will lose a lot of business from this so hopefully they’ll learn from it. Mostly I blame the hollywood.

  2. Serenity says:

    Entitled? really? I think I, as a low-income consumer on a tight budget, have a right to complain when a company that’s already making billions of dollars hikes their rates suddenly. Also, getting rid of DVDs will further alienate their consumers. You do realize there are people who don’t have gaming consoles or high-speed internet but still enjoy the occasional DVD, right?

    In all honesty, I see both sides (see my blog post), but I don’t think it was the right thing to do right now. I can find still-cheaper ways to entertain myself and my loved ones. We’re going to either cancel our subscription or go with the limited DVD-only version.

    (side note: I think the issue is the way you’re wording this. For instance, I didn’t rack up debt mindlessly – I was under-employed for over a year after college and unemployed for nearly 2 months in the past year. Don’t lump together all people in debt – we’re not all created equal, and we’re working hard to get out of our debt!)

    • Brad Chaffee says:

      Serenity, it seems I have ruffled your feathers, and I’m sorry for that, but you have to understand that I can’t always include “the exception” scenario or household in every single post. I do think that it involves an entitlement mindset to expect a company as in demand as Netflix to keep prices especially low ($9 a month for as many DVD’s as I can watch and unlimited streaming is a HUGE BARGAIN!) even though it would put them out of business. If they don’t pay more for the licensing fees then they won’t have the content and will as a result go out of business, would they not?

      Could they have done it slower? I don’t know. I’d have to see their books, but it could just be that they waited too long to raise them to what they should of been because they thought they would outrage the base of a growing and in demand source of entertainment and lose business because of it. It was a double edged sword and they made a mistake in waiting so long especially if they knew that the contracts that they currently have were going to rise.

      “You do realize there are people who don’t have gaming consoles or high-speed internet but still enjoy the occasional DVD, right?”

      With all due respect, I’m not trying to be disrespectful at all but this part of what you said suggests that people that can’t afford internet or gaming consoles are “entitled” to being able to watch DVD’s because they too enjoy them. First of all, DVD’s aren’t going to just disappear because Netflix follows technology to keep their business afloat. You can still find tape players and VCR’s can’t you? To me it just seems that DVD’s are headed in the same direction as vhs tapes much quicker because of technology and think it would probably be a smart move to appeal to a majority of it’s customers.

      The good thing is that we all have a choice to either stay or go. Regardless of anything, that is our right as consumers. I have no problem with that. I do have a problem with people bad mouthing Netflix as if they were the devil reincarnate.

      Some people didn’t rack up debt mindlessly but most people did. Again I can’t spend each article covering each little group of possibilities that could exist. The majority of people who are in debt did so mindlessly without thinking about the day it would suddenly overwhelm them. A majority of people I work with on and off of the site openly admit to being in debt because of stupidity. I include myself in that group of people which is why I am now so passionate about debt freedom myself. I am COMPLETELY debt free but it wasn’t the case prior to 2009. Until the end of 2007 hardly did I truly and deeply consider the consequences of running up that debt. It wasn’t until we were maxed out that that occurred.

      My entire point with the debt statement is this. Most people would say debt is a tool and are totally fine with all of the money they waste in interest each and every year. My point was that instead of ignoring that important fact with regard to debt (which would qualify someone as accumulating or staying in debt mindlessly in my opinion), they should instead focus that anger at paying off their debt so they wouldn’t be wasting money in interest. To me that makes more sense to be mad about, not a $7 increase on a service that was already a huge bargain to begin with and that will still be worth what they are charging.

      I just wanted to point out that some of the same people who were “probably” complaining about this increase was probably ignoring the fact that they continue to accumulate debt without even thinking about it.

      It’s as simple as this. If you are spending less than you make, and your debt comes from hospitalization or unemployment outside of your control, then I wasn’t talking about you. You’re right, I can’t lump everyone into the same category, and I didn’t, but I can form an opinion based on what I see which is that most people got into debt because they borrowed for things they should have paid for.

      Thanks for the comment I really appreciate it when where able to have a discussion as heated as this with respect for each other. :D

  3. Stephanie says:

    I can also see your point. It’s not THAT much more money. For the same service. I guess I was already thinking of cancelling the service because I’ve been so busy this summer, I haven’t really had time to watch a lot. I’ve had the same DVD at home for weeks! So it feels like a waste. Plus, lots of the TV shows I like are back on the air. I’m planning on moving soon, and may not get cable at my new place (by choice). It would be cheaper to get Netflix than pay for cable.

    This change in pricing might also make a lot of people realize how much (or how little) they’re currently using Netflix, so they may adjust their spending/usage accordingly.

    And of course, your post made me rethink my debt-payoff habits. I should pay more of my student loans every month, shouldn’t I?

    • Brad Chaffee says:

      I think that’s a good reason to cancel your subscription Stephanie! :D

      I really hit some nerves tonight on this but I still stand by my post. And your right, Netflix is way way cheaper than cable and I think the argument could be made that what you get from Netflix is more valuable than what you get when you pay for cable. I was always searching for stuff to watch and usually didn’t find anything on cable, but whenever I want to find something on Netflix to sit back and relax, I can usually find something worth watching. I personally think cable is a waste of money although I LOVE the History channel! haha! Luckily there is History Channel shows on the Netflix. :D

      It definitely made me take a look at our own situation. The conclusion that I came to was that based on what we used to pay and what we used to get, Netflix is still worth what they were charging. How much it used to be never came into question, it was about whether or not I thought what I was getting was a good or a bad value.

      Knock those student loans out girl!! :D You know I got your back on that one! LOL

  4. Sskipstress says:

    While there are a lot of movies in my queue on Netflix, which aren’t available for streaming, this pricing model change has me considering cancelling the DVD portion of my subscription because I don’t use it nearly as often as I use the streaming service.

    Before I make the change, though, I’m going to spend some time with my library’s online catalog to see how much of my Netflix queue is available to me for the price of a short walk across the neighborhood and the occasional late fee (because I know I won’t return all the DVDs on time).

    • Brad Chaffee says:

      We have considered dropping the DVD portion too, but not because of the price. Same as you we simply don’t have the time to watch as many movies as we used to watch with our busy family. My only complaint with the DVD selection is that the New Releases are on a delay which makes it very hard.

      As far as the online streaming selection goes, if the quantity and quality decline we probably will just cancel our service. My hopes are that with the more expensive licensing fees Netflix is paying this library will grow substantially. Still bigger and better than the old school video store collections as a whole though.

      As for your late fees. I know the feeling. we would always try so hard to get them back on time but it seemed there was always something that messed it up for us. LOL At least the late fee for Redbox is only $1 per video per night. That’s a lot better than the $4 it used to be for late fees. :D

  5. Jennifer says:

    Well the price hike didn’t affect me at all – because we don’t use Netflix or cable (or even TV)! Our family generally uses nearly-free entertainment options like hiking, biking, sports, puzzles, books, parks…. And that makes the once a year trip to a movie at the theater a really special event.

    Each family has to evaluate whether the money required gives the required ‘bang for the buck’, and whether the expenditure takes them toward or away from their goals.

    • Brad Chaffee says:

      I agree Jennifer, well said. I personally LOVE hiking and doing home workouts like P90X, and my kids love all the local parks too, but I’d be lying if I didn’t admit to loving a good movie! :D

      “Each family has to evaluate whether the money required gives the required ‘bang for the buck’, and whether the expenditure takes them toward or away from their goals.”

      Exactly. If it’s too much then just cancel it and move on, but I couldn’t believe the vitriol that was being thrown around over a company doing what it needed to do to adjust to rising licensing prices. Apparently saving your company is considered greedy in this generation.

  6. I was seriously considering subscribing to netflix…..but at $16.99 I don’t think it’s worth the cost. I’ve seen their streaming library, and there’s not much there that interests me. I can get 17 movies at redbox for the same price in a month. I don’t watch nearly that many movies. If you’re a heavy user of netflix, then even a 60% price increase is probably pretty close to a “who cares” given that it’s still pretty inexpensive. But for the casual user, they just killed their price point – in my opinion.

    • Brad Chaffee says:

      We have been Netflix users on and off since 2004 and we have never had a hard time finding something to watch, especially since they added the streaming. We personally get more use out of the streaming and I happen to think they have a pretty large library especially of stuff I couldn’t get in a video store or at a redbox, such has television seasons, documentaries of any kind, including history channel shows, animal planet, discovery, and the food network, and the kids selection is awesome!

      To get a movie at a time it would only cost you $8 not $17, the 17 would be for streaming too. Another big thing for me is that redbox gives it to you for a dollar a day. That $1 turns into $2 or $3 real quick if life gets in the way ya know. I totally respect your opinion and feel it might not be for everyone but for us, because of the reasons I listed above, it’s totally worth it. The only thing that may change for us though is getting the DVD’s mailed. We may drop that depending on how busy the end of the year gets for us. It’s looking to get crazy. :D

      Thanks for sharing your thoughts good buddy!! :D

    • Brad Chaffee says:

      Oh one more question. How many people complaining about the value of Netflix pays for cable or satellite television? In my opinion that’s the biggest ripoff as far as home entertainment there is. You spend half your life flipping channels trying to find something that hasn’t been on 400 million times before. Take it even further and think about how many people complaining about Netflix are in debt and not actively trying to pay it down AND also have cable television?

      The main point behind my rant was to point out the irony in how people were so mad and angry about Netflix yet walk around in life racking up crazy debt. I was one of those people dude! Anyone who has awoke, including yourself, can admit at one point in time you were clueless as to how the consequences would affect you as the rest of us were. So if they’re (the people complaining) so mad about the value of their dollar and what they can get with it, my point was that they would be better served being that mad about the interest they pay each month.

      • I don’t disagree with you one bit…..personally, I think the reason people are so worked up over the increase is what it represents. $9.99 a month for streaming and one physical DVD at a time is, quite frankly, an incredible bargain. Seeing the price go up just a few months ago…and then again this week by 60% is arguably showing a trend. The trend being, now that we’ve got you hooked, we reserve the right to jack up the prices whenever we want, however much we want. People are worried that their once incredible bargain will soon become a pretty good deal, and then eventually become just “a little better than cable.”

        • Brad Chaffee says:

          I think you have shared some valid concerns, but remember, the great thing about this country is we all have the freedom to turn down business. I’m just gonna ride the wave and hope that Netflix, the same company that made my life easier, will make Netflix worth what costs are. If so I’m gonna stay. If not, I’ll leave but I won’t have anything bad to say about the company other than they lack a good library. I certainly wouldn’t call them greedy capitalists which is most of what I saw yesterday. It just kind of makes me mad that someone would jump to that conclusion without first considering the fact that Netflix’s operating costs just went up, so they had to adjust or fail. My question to them is this. If they were running a business and ended up in this situation what would they do?

          I agree that Netflix needs to deliver when it comes to their already substantial library, and that should probably include offering New releases a little sooner or some kind of add on like Pay Per View where someone pays a dollar or two to watch a new release in a 24 hour time period — kind of like RedBox does. I just don’t think they deserved the outcry they got with the hatred that followed.

          I like that I get to choose what I do next, don’t you? :D Thanks for the awesome conversation as always my friend! I enjoyed it.

  7. Clair Schwan says:

    This is a very interesting post and discussion. I’m reminded of the recent 50% increase in my cell phone costs for roaming, and the 60% increase in fuel costs over the last 6 months or so. I keep in mind what Dwight Yoakam sings, “…baby things change.”

    First of all, from a consumer point of view, companies either make good decisions or they make bad decisions, and the market punishes or rewards them accordingly. We have little influence with respect to those decisions, but we can respond as consumers. We can either continue with our purchasing pattern, change it, or stop doing business with them. Much of this depends on the choices we have in the marketplace – that’s why having a free market is so important, it gives us the ability to choose another provider, even if we have to wait for that provider to enter the marketplace (like Netflix and RedBox did not too long ago.)

    Second, all of this needs to be kept in perspective, and the perspective all depends on the individual. To be sure, such a large percentage increase would be an outrage for a hefty monthly bill associated with essentials like rent, utilities or groceries, but from my perspective as a frugal individual, renting from Netflix isn’t essential, nor is it a lot of money.

    In our home, we enjoy Netflix, but Ellen manages that aspect of our operation, so I’m going to relate what she said this morning. She commented that it’s the streaming video that is causing the rise in cost, so she’s changing our service to DVD only and that will keep us at under $10 per month. And, I should note that we’ve dropped Netflix at least once before because we don’t spend much time at all in front of the “big screen.” But, for now it’s a luxury we choose to afford.

    And, I encourage all of my fellow consumers to follow suit – make a choice and let your choice send a message to the marketplace about the wisdom of decisions that are being made out there. In response to a 50% increase in cell phone roaming rates, I changed providers to eliminate roaming charges. In response to rising fuel costs, I made no changes because normally I use very little fuel.

    If I may quote Dwight Yoakam again, “Let’s don’t go placing no blame ’cause you know things can change.”

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