Monthly Archives: September 2011

Dear Netflix #

Dear Netflix,

It’s not me it’s you.

I cancelled my account just before the 60% price increase kicked in. I took the exit survey because I wanted to let you know why. You didn’t give me that chance.

The closest item to my answer was “I want to cut costs.” While that’s somewhat true, it’s not the whole story.

You offended me with a 60% price hike. I immediately decided to cancel as soon as my current pricing ended.

Splitting the product prices cemented my decision. I purchase products because they provide value to me. If the value doesn’t match the price, I don’t buy. I’m not cutting costs, I no longer see the value of your separated services. It’s not me, it’s you.

First, you’re paying too much for your content; when you pass those costs on to me, I’m not interested. Yes, studios have a great deal of bargaining power in this assymetrical relationship, but not buying at their inflated prices is an option you should consider. It’s not worth what they’re charging. My pricing sensibilities are a product of the 99-cent-ificiation of media. Digital distribution should be cheap. Digital content at your scale should be too.

Second, Neflix offered the unique proposition of both discs by mail and streaming, together in one package. I don’t get that from RedBox. I’ve carried an Amazon Prime membership for years simultaneous to my Netflix subscription, and while Prime videos are a newer offering—and a perk of a service I was already paying for—they don’t offer the same value as your combined package at a low price. But now that I have to evaluate your products separately, I see that I’ll spend less each month getting movies from RedBox, and still get most of the “free” streaming content (excepting Starz, which you’re apparanly having problems with) through Amazon. For new releases, there’s a RedBox a block away a the grocery store. For me, the switiching cost is negligible. Your rivals are increasing, but you just commoditized your product. You’re no longer different.

With a combined plan you had a differentiated offering. Consistent customer service (even if it was sans-human), an iPhone app and quick turn-around times were a great selling point, but they’re not enough on their own. (I’m apparently lucky enough to live close to a Netflix distrubtion center, so I’d get a new disc a mere day-and-a-half after putting my old one in the mail.) I already have access to the same content at a lower price. I was paying you anyway, because the way you did it offered me value. No longer.

I made this decision before you announced you’re splitting into two companies, and I’m glad I did. It validates this break-up.

Please don’t write. I won’t be sitting by the phone waiting for you to call. Getting a lame “apology” via email a week later just confirms you don’t get it. I’m moving on.

Sincerely,

 
 
Tom Q. Customer

P.S.: Did you see the comics by Joy of Tech and Oatmeal? (h/t Gruber) I think they’ve got you down.

P.P.S: Maybe you’ll lose enough subscribers to come to your senses. Maybe not. The only sensible reason I can see for the company split is to sell either the spin-off or the whole company. Is a studio buying you? It would be a great match for them as you’ve got the distribution network and (flagging) subscriber pool in place. The DVD-by-mail business might be a great acquisition for GameFly—but they already charge much more than you do.

P.P.P.S: You have your own hashtag: #DearNetflix

One Response
Hire Tom! Hire Tom!