Observations about Netflix
Netflix the company that provides subscribers with movies on demand or in their mailboxes that can be ordered from the comfort of your own home has had quite the year. Beginning in summer 2011 and lasting for the rest of the year the company experienced some major public relations problems and angered many subscribers with new pricing and business plans. Many business analysis predicted that Netflix would be forced out of business. Here are a few of those problems:
In July Netflix changed their prices saying they would no longer charge subscribers $9.99 per-month for both streaming and one DVD at a time in the mail. The services would be split $7.99 per-month for streaming and $7.99 per-month to rent one DVD by mail at a time. If you wanted both services you would now be paying $15.98 per-month. Subscribers were not happy.
In September Netfix CEO and Co-Founder Reed Hastings said he made a mistake in how the price hike was handled and owed his subscribers an apology. In the same blog post he announced that they were renaming its DVD by mail service "Qwikster." Now if you wanted both streaming and DVDs by mail you need to maintain two separate accounts on two different websites.
Then after a few weeks of bad press and what appeared to be lack of research about the name Qwikster Netflix announced that Qwikster would be abandoned and DVDs and streaming would be kept under the Netflix name.
These moves cost Netflix 800,000 U.S. subscribers by the end of October and its stock price thirty-seven percent.
However, despite loosing subscribers and receiving a lot of bed press this down turn seems short lived. The company began 2012 by saying that they gained 600,000 subscribers and its stock rose sixty percent. They also are working hard to increase their streaming content.
In the interest of full disclosure I have been a Netflix subscriber since 2010 and have been a satisfied subscriber. I decided to subscriber after seeing my DVD collection grow to over 100 movies on DVD. I don't like going to the theater and all of the video stores in my town closed. If I wanted to watch a movie I would buy it and wound up with some movies I don't know if I will watch all that often. So I signed up and over a year later have seen tons of movies that I would otherwise not have seen.
I was not bothered by the price change because I do not use the streaming service and with the one DVD out at a time I can average about two DVDs a week which is plenty for me. I am now saving $2.00 a month. The only downside to the mail service is that the DVD you want you might have to wait awhile for because lots of people have it out and you rely on the mail. In order to receive two DVDs a week I have to watch it and send it back the next day and if there is a holiday and a mail delivery day is lost I can only receive one DVD per week. Also if the post office goes through with planned facility closers in the coming months and delivery takes longer I will have to pay more in order to have more than one DVD out at a time.
Netflix might be steadying itself but here are a few of my observations that were not reported on:
Like me, under the new pricing some subscribers will be saving money because they either do not stream movies or receive them in the mail.
While I do not doubt that the future is in streaming movies it might not be the best option now. Currently I can get most DVDs that have been made in the mail, even though I may have to wait. Not every movie streams online for Netflix they are continuing to negotiate with studios to add streaming content after loosing some studios in 2011.
Netflix is not the only game in town there are alternatives.
Netflix will no doubt be a company to watch in 2012 after a very bumpy 2011. What do you think?














