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Marcus Yam (Blog) - August 17, 2007 8:33 AM

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23 comment(s) - last by Mitch101.. on Aug 19 at 10:52 PM

Netflix three disc plan falls again to $15.99

Netflix customers yet again are the recipients of good news. In a world where it is commonplace for inflation to slowly drive the cost of goods and services upwards, pressure from competition has caused the largest mail-order movie rental company to drop its fees by another dollar.

A contributor to Gizmodo was one of the first to receive a notice from Netflix informing that the company is lowering the price of its three DVDs out at-a-time plan down to $15.99. The lower price will take effect beginning with member statements on or after August 16.

The reduction comes just weeks after an earlier one dollar reduction, which brought three disc plan down to $16.99 from $17.99.

Not all Netflix members have received a price drop memo, leading some to believe that the reduction may not be nationwide. Calls placed by Yahoo! to Netflix have revealed that the dollar drop will apply to 6.7 million members, which is likely the online rental company’s entire customer base.

The move by Netflix is likely fuelled by its ongoing competition with Blockbuster, which operates a similar mail-order movie rental business. Netflix sued Blockbuster in 2006 for copying its "method for subscription-based online rental," with the two companies reaching a confidential settlement in late June 2007.

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Bad times for Netflix

By mofo3k on 8/17/2007 10:25:16 AM , Rating: 2

This news is right on the heels of Blockbuster buying Movielink and possibly entering the online streaming video market. I must admit that I'm finding it even harder to find a reason to switch from Blockbuster to Netflix especially since I get a ton of free in-store rentals with my plan. A lack of competition does scare me a little though. Hopefully Netflix will enter a deal with some Video Rental stores to offer a comparable product to Blockbuster Total Access.

RE: Bad times for Netflix

By RamarC on 8/17/2007 11:02:23 AM , Rating: 4

bad times? netflix profits are still increasing. $25M for the latest quarter vs. $17M for year ago quarter. blockbuster has steadily declined for 4 years.
Operating Profit before Depreciation (EBITDA), 2006-2003:
Netflix: $217M $108M $105M $55M
Blockbuster: $982M $1,057 $1,249M $1,691

netflix's only problem is dumb wall street analysts who ignore cash performance. they keep predicting challenges and problems (and have done so for years) but netflix keeps making money. as long as blockbuster still has to pay rent and salaries for their brick-n-mortar they'll continue to see their profits decline.

i'll never set foot in another video rental store. but i wouldn't mind if netflix joined with best buy or circuit city for in-store rental of recent releases.

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RE: Bad times for Netflix

By Polynikes on 8/17/2007 1:12:23 PM , Rating: 1

quote:
i'll never set foot in another video rental store. but i wouldn't mind if netflix joined with best buy or circuit city for in-store rental of recent releases.

Wait, you say you'll never set foot in a rental store again, but you'd go to a different store who's partnered with netflicks to rent a video? Which means you will be setting foot in a video rental store, effectively. The whole point of netflicks is not having to leave your house to rent videos.

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RE: Bad times for Netflix

By deeznuts on 8/17/2007 1:18:48 PM , Rating: 2

Ahhh but you miss the point. Bestbuy and Circuit City have other goodies to look at when in the store. But I think overall it's a bad idea, I'd walk away with electronics everytime I'd go to rent a movie!

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RE: Bad times for Netflix

By Polynikes on 8/17/2007 7:54:20 PM , Rating: 2

A movie rental store is still a movie rental store no matter what you call it or what other products/services it has.

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RE: Bad times for Netflix

By herrdoktor330 on 8/17/2007 10:30:14 PM , Rating: 2

Personally, I don't think that blockbuster's selection holds a candle to the rather obscure items netflix has to offer. To each his own, but I've been a loyal netflix user for years. I've only had issues getting certain disks (namely "The Harder They Come" and John Woo's "The Killer"). But those are minor compared to the other stuff they have. Plus I really like their system of recommending movies. They've been very good with introducing me to other movies that I ended up digging.

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By sprockkets on 8/17/2007 10:55:07 AM , Rating: 2

Would be nice to have a local rental store except all the Blockbuster stores in my area closed.

Netflix also already has a video download service, perhaps though not as good as movie link.

And since I've been with Netflix since the beginning, I still get 4 dvds to check out while everyone else gets 3.

RE: eh

By Maetryx on 8/17/2007 11:39:42 AM , Rating: 2

In my community, all the McDonald's restaurants now have Redbox new-release rental kiosks for $1 a night. I guess they're really a vending machine and not a kiosk. I used it to rent "300". Worked just like advertised. Run your credit card through, type in an email address (maybe optional), and take the movie. Turn it in before 7:00 PM the next day and it's a dollar. It's a dollar a day until you turn it in up to 25 days and then it belongs to you.

http://www.redbox.com/ (I don't work there, I'm not an investor, I don't benefit if you click the link)

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RE: eh

By MonkeyPaw on 8/17/2007 1:45:12 PM , Rating: 2

Yeah, we're big on Redbox here, too. We don't rent a lot, but when we do, Redbox is a pain-free choice. For $1 a night for the newest releases, it's hard to make yourself drive down to Blockbuster and pay more, because you know you're only going to watch the movie once (even if you keep it another night, it's still cheaper). For our occasional use, it makes more sense than a subscription plan.

Funny enough, but Micky-D's is the closest movie rental place to my house, and it's also the closest public WiFi spot. McDonald's just isn't what it used to be. Some even have big LCD TVs in the dining area, and most offer free USA-Today's for reading while you eat.

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RE: eh

By kmmatney on 8/17/2007 6:41:28 PM , Rating: 2

Another red box fan - it serves all my rental needs, and there are 5 of them near my home and work. Very easy and convenient, and cheaper than NetFlix for my needs. You can even reserve movies online if itsw a popular one that may be rented out.

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Finally Competition

By Mitch101 on 8/17/2007 12:33:02 PM , Rating: 2

I think Netflix is trying to find out how far they have to drop the price until they stabilize thier customer base for those jumping over to blockbuster. If more people run to blockbuster then we can expect more cuts from Netflix.

On the other hand isnt it nice to know that they can afford to reduce the price and still make profits which tells you how lucrative this buisness really is.

To compensate Im sure they can write in a few more movie delivery delays into the software limiting the number of movies actually delivered to you in a month. I always loved returning my movies to Netflix on the same day to have them check in over a period of 5 days from the first to the last. Blockbuster was also guilty of this return it but register it recieved 2 days apart but seems to have dropped this scam to 1 day at most because its putting some serious hurt on netflix with the return locally for movies deal.

RE: Finally Competition

By nafhan on 8/17/2007 12:34:51 PM , Rating: 2

I tried it once. It works fine for what it does.
However, the picture quality is noticeably below DVD quality. The movie selection is somewhat poor (mostly older and 'B' movies). And, it requires IE.

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RE: Finally Competition

By Sulik2 on 8/18/2007 10:18:30 PM , Rating: 2

I work at a Blockbuster, the reason it sometimes take two days to get your next DVD mailed has mostly to do with the time you return it at. Return it too late in the day and they can't process the order and ship it before the warehouse closes. So it can take an extra day.

The real scam is they had us do a 2 month online sales push, then completely changed the online program over night. (literally) And they are not going to be grandfathering in the old plans, but they are going to be forcing people to switch to plans with limited in-store exchanges. Everyone who works at my store has a bad taste in their mouth about that one.

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RE: Finally Competition

By Mitch101 on 8/19/2007 10:52:31 PM , Rating: 2

I think their computer system needs a kick as I usually arrive 10am on tuesday mornings and I usually have to tell the online system that the movies have been returned 2 days later. I never complained because I had 3 movies to hold us while they check in and then ship the next 3 but early on they did screw my orders up a lot to much so I was waiting for them to try charging me for the movies. Netflix was at least a little cleaner when it came to shipping the correct movies.

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A shrinking feature...

By Basilisk on 8/17/2007 11:16:22 AM , Rating: 2

'Still haven't tried this Netflix feature yet, but: Netflix has advertised "one hour of free movie download per month for each monthly billed-dollar of the plan". Using that metric, most of us have lost 2 hours of free download per month in the past weeks as their price dropped. :)

We found it hard to consider BlockBuzzards stores given their limited range of product: we used to wander their aisles for 40 minutes and struggle to find anything of interest as we are definitely not "current teen thriller/hack-em/frat-house/teaser/pop-star movie" watchers or repeat viewers, and rarely find that American re-makes of foreign films match the original's quality. With all [our area's] B&Ms poorly supportive of foreign, old-classic, or small-distribution films, we were elated to find NetFlix's cheap access to nearly all the DVDs in print.

'Been four years since I've entered Block's stores, so maybe they've improved, and perhaps their on-line catalog rivals Netflix. Catalog-breadth and decent pricing are what will catch my business.

Oh, not quite fair of me: I did need BlockBuzzard yesterday -- I used my old Id card to spread AS5 Ceramique on a CPU I was installing. Thanks, BB!

RE: A shrinking feature...

By Mitch101 on 8/17/2007 12:44:52 PM , Rating: 2

My local blockbuster has some sort of a new release scam going that I cant quite figure out. Im sure there is at least one employee here who can tell us what's going on. Im not sure all stores do this but my local one does.

My local blockbuster has many more display cards than they have of new releases. Example they have 30 display cards but will only have about 15 copies of a new release making it look like 30 copies are out. This gives the illusion that they had many more copies then they have purchased for in store rental. I found it odd because I go into work late on tuesdays and when I get there all the new releases have been out for months so I kept going earlier and finally to the point when they opened and discovered they would have 30 display cards but only 20 copies (Example) it could be 60 cards and only 40 copies of the movie but its definately less than the number of movie boxes on the shelf.

You cant reserve a copy at my local blockbuster that I am aware of but it may be that if your a local pay per rent customer you might be able to. Im not sure but I believe the local blockbusters have a way to prevent the free movie online return people from getting all the new releases but I only have confirmation that they have many more cards than they have movies when the store opens for some reason.

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RE: A shrinking feature...

By Spivonious on 8/17/2007 1:11:56 PM , Rating: 2

As a former employee, I can assure you that there is no way to reserve a rental. The best you can do is call and have us hold it for you until you come in. That only lasts 30 minutes from the time you call.

I stopped working there before they started using the placards, so I can't comment on that. I do know that at the stores I worked at there was never enough room on a shelf for the number of copies we had. At my local stores now I see placards stacked on top of each other, so I assume the same situation still exists. In any case, Blockbuster sends out documentation each week on how the new releases are to be displayed on the shelf, so it's entirely possible that the store wants 4 rows of 8 copies each and then the store only gets 20 copies.

As far as any conspiracy theories for preventing online customers from getting new releases, I think you should take off your tin-foil hat :)

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GOODBYE BLOCKBUSTER FOR ME

By Mitch101 on 8/18/2007 12:32:35 PM , Rating: 2

Just got this in my e-mail from blockbuster.

Due to changes in our subscription plan pricing, your current BLOCKBUSTER Total Access™ plan, Unlimited Online DVDs up to 3 at a time plus unlimited in-store exchanges each month for $17.99, will no longer be available at the current price.

You will be moved to our new plan that includes Unlimited Online DVDs 3 at a time plus up to 5 free* in-store exchanges for $17.99. This plan will not include an e-coupon for in-store DVD and/or game rentals. The new subscription plan and pricing will go into effect on your regular monthly billing date following August 31, 2007.†

In addition, exclusively for BLOCKBUSTER Total Access customers, we have introduced in-store movie rentals for $1.99* per movie should you need more than the in-store exchanges included in your plan.

If you don't feel this plan is right for you, please feel free to take advantage of one of these other options:

Move to a new plan that includes Unlimited Online DVDs up to 2 at a time plus unlimited free* in-store exchanges each month for $21.99/month

Move to a new plan that includes Unlimited Online DVDs up to 3 at a time for $16.99/month

See other subscription plans.

Cancel Now

RE: GOODBYE BLOCKBUSTER FOR ME

By johnsonx on 8/18/2007 1:47:12 PM , Rating: 2

Just a question... do you generally exchange more than five movies per month in store? If so, where are you going to get a similar service for less?

While I certainly understand your irritation at Blockbuster for changing the plan terms, if you were really such a heavy renter both on-line and in-store where are you going to go now?

Myself, I cancelled blockbuster because I wasn't using the service much at all... a movie would come in, sit for a week or more unwatched, and finally get returned unwatched. We're just into other things right now...

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RE: GOODBYE BLOCKBUSTER FOR ME

By Mitch101 on 8/19/2007 10:47:33 PM , Rating: 2

We like to watch a lot of series, documentaries, kids movies for the kids, and regular movies expecially now because the regular shows like lost etc are all off so we try other series to see if they are worth watching. If so we start from the beginning.

The new releases are always out at the local store unless you get there when they open which is not convenient, My online queue has movies in there over 3 months never shipped, I never recieved a game rental option despite they are supposed to send them or allow you to print them, There are no documentaries in the store at all (Selection is poor and usually unavailable. Kids movies that the kids want to see are always out because they never get enough copies.

The gas to and from blockbuster is not worth 5 movies a month even less when they dont seem to ever offer any game rentals.

You can say where am I going to get such a better deal but when you take out making the trip to the local store then its now more expensive than netflix and netflix never held movies over 3 months on me like blockbuster.

Amazing how in only a few days I was praising blockbuster to now saying so what I will walk to my mailbox instead.

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excellent!

By Moishe on 8/17/2007 10:30:40 AM , Rating: 2

I've been a loyal Netflix customer for years and I'm not about to leave, but this is great for me and I hope it brings in more customers.

I've rarely dealt with a more reliable service and the amount of money I saved from switching to blockbuster store to Netflix is a huge amount.

This is not for the entire customer base.

By PAPutzback on 8/17/2007 2:32:30 PM , Rating: 2

The fella on the phone said it was a test that I wasn't elegible for. So they msut be marketing it in a certain area to see if they get more signups. He did point out that I received the lower 16.99 rate after they cut the rate back by a dollar a few months back.

I also noticed that I had 17 hours available for downloading content. I had no idea. Time to work on that HTPC so I can get all my bennies.

Even if BB was 2 bucks cheaper I would not go. Because you'll get that itch to return the movies directly to the store and if you have family like me you'll end up blowing the savings on one candy bar and gas.

I just assume walk to the end of my driveway.