Was Netflix’s $10 plan a mistake all along?

This is the conclusion David Pogue comes to, and it feels right:

Originally, it was “pay $10 for one DVD—streaming free!” Almost overnight, though, people began thinking of it as, “pay $8 for unlimited streaming—and get one DVD for $2 more!”

“That’s not sustainable for the longer life of DVD’s,” Mr. Swasey said. “We need more revenue. It’s a business concern we have to address. We want two separate business units, each side of the service. We were not able to fulfill the requests for DVDs at that cost.”

“I’ve had this conversation over and over again for the last 24 hours,” said Mr. Swasey. “Yes, 60 percent is a big number. But that increase is only $6 a month more. That’s a latté a month. We’ve gone from an extreme terrific value to a terrific value.”

Want to know the worst part? He’s right. PCWorld.com has a nice summary of Netflix alternatives. There’s Amazon Prime (no DVDs by mail, small streaming selection). Blockbuster by Mail (pricier mailed DVDs, no free streaming at all). Hulu Plus (no DVDs at all). Redbox (no streaming, pay by the day). In other words, even at $16, Netflix still gives you more than anyone else.

So whether we like it or not, whether we can explain it or not, Netflix has indeed killed the best entertainment deal on the Web. Mr. Swasey has it half right: it’s gone from an extreme terrific value — to an average one.

When the unlimited streaming came out, it felt like a nice add on. And the price point seemed to work. But then I got hooked on streaming. It is Netflix to me.

I just downgraded to the streaming only plan. I regularly sit on DVDs for weeks and months on end. The whole waiting-to-get-DVD thing doesn’t work for me.

Invariably what i felt like watching on Tuesday didn’t ring true on Friday. That’s why I love streaming; I watch what I want to watch when I want to watch it. It just feels right.

I have an Apple TV to stream new releases that aren’t on Netflix. I only buy Blu Rays of beautiful movies that I really love. Think Lord of the Rings and other movies where you want the best possible video. I’m just one bad day at work away from wanting to escape to Middle Earth for an evening (or Hogwarts). Those are the kinds of movies I have on my shelf.

(This is the first blog post I wrote from my iPad. Not bad at all.)


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