Sunday, 31 July 2011

Talking Point: are American complaints about Netflix price rises totally unjustified?

Sunday, 31 July 2011
I've heard that Netflix have decided to raise their prices, in an effort to effectively get Americans to stop renting discs and instead start streaming content (which is much cheaper for them to deliver).

The unpopular way Netflix have chosen to influence this change has been an unexpected price rise. In particular, Netflix's popular $9.99 per month rental-and-streaming package has risen to $15.99 per month.

Thing is, when you adjust dollars into Pounds Sterling, this "outrageous price rise" looks anything but to British eyes! The pre-existing $9.99 package equals a trivial £6! This means the controversial increase to $15.99 is a deal worth £9.70 in British currency. Yes, Americans are complaining because renting and streaming movies will cost them less than a tenner every month! To me, a $15.99 package would be a bite-your-hand-off-to-get-it bargain!

I subscribe to LoveFilm (the European equivalent of Netflix) and pay about £15 a month for unlimited rental of three discs at any one time, and streaming of content (not including recent releases, where you pay about £3.60 each). This deal is something I've considered reasonable—considering it can cost £15-25 to buy a Blu-ray disc outright.

But £15 in US dollars is a staggering $24! Would any American pay $24 to Netflix, considering they're upset about paying just $15.99? I seriously doubt it. Considering the rumpus Netflix's price increase has caused going up by $6, people would probably cancel their subscriptions if it had gone up by $14.

So today's talking point is: are Americans once again guilty of moaning about nothing, considering the prices Brits pay for an equivalent service? Or are Brits again unaware they're paying extortionate prices, and foolish enough to do so? Or is it a bit of both?

If you live in another country, feel free to say what your own video rental subscriptions are. It would be particularly helpful if you can calculate the cost in dollars/pounds. I'd love to know if the rest of the world have a service that charges similar prices to the US, but I suspect most people are paying similar to the UK. Is that assumption true?

And to any American Netflix users reading this, do you now feel guilty for grumbling about a price rise that Brits would consider a significant reduction?