Netflix Streaming – The Controversy and the Price Hike

From the very beginning of my period of unemployment, I've had to stretch my entertainment dollar as far as it will go. Gas prices the way they are, this also means that a lot of my entertainment (aside from the occasional movie or social engagement with friends) has to also be delivered to me, rather than having me fire up the Ford to go to it. In my wild and reckless youth, I'd have had a simple solution. I'd have pirated until my (1 TB) hard drive could take no more. As I've grown older, and hopefully wiser, I've approached what little media piracy I engage in with a personal ethical code. Something has to be: unavailable in the format I need it in when I need it for a reasonable price in order for me to pirate. I've long said that if a fair-priced and convenient legal alternative is available, I'll use it in order to support another solution to the piracy problem aside from random thuggish lawsuits. I've talked a lot about Steam, and how it reduced my game piracy to almost nothing, but for TV and movies... it has been all about Netflix.

This is what I asked for. A fairly priced, convenient alternative to piracy.

A little over a year ago, I decided that a Netflix subscription might be right for me when I was investigating the options on this PC, which is a Media Center computer with a few hardware modifications to allow for gaming. Exploring what I could do to play movies and watch TV on my new-ish computer, I first noticed Netflix streaming. I'd considered Netflix before, but I really don't watch nearly enough DVDs to make it seem worth the price. I prefer streaming digital content when I can get it. Browsing the offerings on Netflix streaming, and seeing that it was included with the “1 movie out at a time” option, made it a no-brainer. I set it up right before we moved in here, and Netflix was waiting for us before we'd unpacked a single box.

I wasn't really surprised when I got the first e-mail with a small price increase. What I'd been getting was a value that was, really, too good to be true, so I wasn't really surprised or angered by that first tiny price increase. More recently, however, I got the e-mail that so many people got stating that September 1^st, those of us used to a single DVD and unlimited streaming would have to either choose one or the other, or get hit with a 60% price hike. Like so many others, I sharpened my pitchfork and got my torch ready. So many people are regularly disappointed and mistreated in their business relationships with big companies that it feels like a real betrayal when something like this comes from a company that most of us consider “one of the good 'uns.” Before shooting my mouth off online, however, I decided to do a little research into why this happened.

Recent customer reaction to the controversy found on Reddit.

It appears that Netflix has had some troubles recently, victims of their own success. As compared to a lot of the big media multinational corporations, it is still a fairly small company. In the period of the last few years, though, the streaming option has become so popular that during peak usage hours in the US, Netflix streaming accounts for a higher percentage of all used bandwidth than any other program, product or service. Those big corporations have taken notice of the popularity of streaming video, and they aren't happy that a little upstart company has a foothold in the market and is offering it cheaper than, say, they might choose to price it. The large companies responded as they usually do, by screwing over Netflix in order to run them out of the market so that competing video streaming services can be launched. Several studio contracts with Netflix either just ran out or are about to, and the renewal of those contracts is, in many cases, either off the table entirely or at 10x the previous licensing fees.

I'm still angry, but most of my ire is now directed at the studios that are forcing this showdown to happen. Netflix is taking a beating in the scandal, with irate customers canceling at a rate polls suggest will approach 50% of the current users. Trapped between offering fewer streaming options and raising prices on their service, the company is in a bad spot. If this controversy is the beginning of the end for Netflix, their loss would be a tragedy. I've dealt with the customer service at Netflix as well as the departments at Comcast, Sony, and several other potential players in the upcoming streaming content wars. I have 100% satisfaction with all of my dealing with Netflix on customer service issues, and a terribly spotty history with the giants that want to take its place.

If you're really looking for a villain in all of this...

Personally, the question of what to do isn't a difficult one for me. I'll drop the DVD option, pay a little less on my bill and use the streaming. When content options disappear and only show up on an inferior and more expensive competing service, I won't have a single ethical problem with turning to piracy. I will not reward companies who bully smaller corporations and threaten/pursue legal action against the public with my business. When corporations behave in this manner, I'm not even seeking justification for illegal behavior, they've made it personal. Millions of customers have turned their ire toward Netflix, which after a little bit of online research, seems to be a case of misplaced aggression. Me, I feel plenty aggressive, but Netflix only gets a very little bit of that. The rest is reserved for Time/Warner, Sony, Comcast and the major TV networks.