Goodbye Little Red Envelope!

No, I am not going to write one of those angry blog posts about how Netflix increased the price of their plans 60%. In fact, I was thinking about dropping the DVD service temporarily. I don't have too much time for entertainment and lately I have just been playing shows I have already seen to have some background noise while I am busy with something else. The last DVD I ordered sat on my desk for a month, then went back without being watched (something I never did before). So, the price hike was a good excuse to just go stream-only. (hence no more envelopes)

I am worried about Netflix though. Not that I own stock or anything, but like many of their customers I love the company. They provide an excellent service for a very good price. Also, a strong Netflix means better content deals. As Netflix gets weaker, number of competitors and their exclusive content deals will increase, which will make us, the customers, pay for multiple services. One that specializes in movies (e.g. Netflix) and one that has better TV offerings (e.g. Hulu).

Competition is good, but I would much rather see the companies battle over non-content issues. Like providing a  better player, higher speed, better social integration, more perks (Amazon's Prime for example, uses Amazon free shipping as a perk. Or videos are the perk for being an Amazon Prime member. Either way, it is a perk!). In fact, that is how Netflix became such a major force. They changed how people rented movies. They could rent out more or less everything Blockbuster had (except for those defensive driving videos!), they just had a different business model. I am sure the same will apply to the online distribution business in the future, but we are going to have to wait while the industry sorts itself out.

One reason I never considered switching to Hulu Plus (I refuse to pay for two services!) was Netflix's strongest extra: The DVDs. Even if I haven't been utilizing that part of the service fully, I still couldn't let it go, because there are times when you really want to rent a movie that is not available online. It was like insurance for those days, for a few dollars a month. With this last price change, Netflix completely separated the two services (streaming and DVDs) and won't give you a discount if you get both. I understand that it wasn't profitable to send unlimited DVDs for 2 extra dollars a month, but not giving any bundle discount doesn't make sense. That is how you get people to give you money for a service they don't want that much. (case in point, me!)

Obviously, I don't have the company books (I couldn't understand them anyway) and something that doesn't make sense to me might be a good business plan for Netflix. It is known that they saw the streaming as the future of the business and the DVDs as a stepping stone. So, a lot of people think that this is the move to finally kill our DVD addiction and get our entertainment from the cloud. If that is the plan, timing might have been a bit off. DVDs will definitely be around for a few more years.

So, I say goodbye to the red envelope, but keep my ties with the red website. But I sure hope that they are cooking some major content deals back there, because I don't want to move to some other company. Could you imagine how long it would take to transfer 7 years worth of rating history?