Along with several million people out there, I recently received an email from Netflix stating that their services would be splitting between the DVDs and the streaming options, which drastically affects their pricing structure. The blunt email let me know of my choice between an approximate 60% price increase for the same level of service, or an approximate 15% price decrease if I choose either DVDs or streaming. No explanation as to why they're initiating this change or what the advantages will be, depending on my choices.
My initial reaction was similar to the various rants and raves inundating Twitter and Facebook. Why should I pay so much more, for the same amount of service? But, after a week to think about it, I'm think I understand Netflix's strategy.
They effectively put chains like Blockbuster out of business, by reaching the consumer in the most convenient way — at home. Then, they expanded on that convenience by adding the streaming option. Now, you don't even have to wait for the DVD in the mail. With internet speeds growing faster and more powerful, online streaming is becoming the most convenient method, especially as that option is now available on multiple platforms — from computers to gaming systems.
So, the thought of splitting the physical from the digital isn't so far-fetched, considering the continuously changing landscape of renting movies. It's their customer communications that could have gone a bit smoother. Explaining to their customers why they're splitting the services, and what the benefits would be of paying the $16/month instead of my current $10/month (those prices would be more if you have a higher level plan than me.)
If Netflix simply took the time to better communicate this, a lot of us members would feel better in choosing a particular service option. As it stands, many members are threatening to cancel their membership altogether, in protest. We're customers used to the digital era of two way communication. It wouldn't hurt Netflix to spend some time strategizing a better communications platform for their changes, and any future changes they may make. If they ever go purely digital, I sincerely hope they explain their reasoning better than they have for this service split.blog comments powered by Disqus