So, as you may have heard, Netflix recently had some pricing changes that caused an uproar amongst its customers. I happen to be Netflix subscriber and I am definitely peeved by their actions. Not so much because of the price increase, but because of the way they did it and the new options they are offering.
I consider Netflix to have a great user experience both on their website and on their TV interface. They always come up with great new approaches to things and their former VP came up with some unique and effective ways to document the very detailed interactions they use (see Capturing the Interesting Moments). However, they erred greatly in the recent options they offered and it shows they were not completely thinking through how their actions affect their customers.
Previously, Netflix allowed you to stream any of its content online or on your TV AND receive 1 DVD at a time through the mail for about $10/month. Now, there are 3 options under their new pricing:
- Receive one DVD at a time by mail for $8/month(no more streaming)
- Stream videos online for $8/month (no mailing of DVDs)
- Get both streaming and one DVD at a time for $16/month
The most important thing to know about the above options is that you can get virtually any DVD by mail whereas the selection of DVDs that can be streamed is far more limited.
This last point is the most un-user-friendly thing I have ever seen Netflix do. Let’s re-examine those options to understand why. Option 1 allows you a great selection, but at the incredible inconvenience (compared to streaming instantly) of waiting several days. Option 2 allows you instant access, but not to all the movies that you will want to see. The last option allows you to pay 60% more for what you had yesterday for 60% less. In other words, your options are:
- Wait for several days at all times for your movies
- Stream some movies you like but completely cut a whole bunch of others out of the realm of possibility
- Pay way more
None of those options are attractive because with #1 you are going back to past history; with #2 is a severe limitation on a choice that you have always had with Netflix in the past of having access to virtually all movies; and, #3 is not very nice either…thinking healthcare-company-style gouging here.
Perhaps what Netflix did not think about, as well, is the fact that many of their customers have made significant investments in physical products that will allow them to stream content directly to their TVs. In fact, I made sure when I bought a new TV that is would be wireless-enabled and be able to stream Netflix movies. So, not only am I paying more for my TV, but now that choice could be moot if I choose not to use Netflix any more. Or I can pay $72/year more to maintain my status quo in terms of Netflix service.
Overall, this was severely disappointing from a company that I have been a huge proponent of for a long time. I emailed their CEO and Investor Relations group to let them know about that disappointment but I doubt I will hear back. Either way, it’s a good example of how a company may not have considered all angles of its product offering and the effect it would have on the physical hardware investment of its customers.