Saturday, July 23, 2011

Like Rats from a Sinking Ship? (Netflix Changes Plans and Rates)

Rats jumping shipNetflix recently announced that they will be changing their subscription plans and rates.  The unlimited single DVD and streaming plan that once cost $9.99 a month (I was actually paying $8.99 when I first signed up), will sky rocket to $15.98.  The plans can be purchased separately for $7.99 each (so no discount for the combo).  New users signing up will see this change immediately, while existing users have until Sept. 1 to change their plans.

It’s going to be interesting to see how this affects the masses.

Obviously Netflix couldn’t sustain their business plan on the current rates under which they were operating (unless they planned on carrying only obscure documentaries and non-studio titles… which they were teetering on the edge of as it was).  I assume this pricing change will allow them to start carrying more popular and newer titles.  We’ll see if it improves their instant streaming catalog (I kind of doubt it).

Unfortunately, in the transition, the change promises to hurt independent film.  As a filmmaker who’s movie is about to be purchased for DVD rental by Netflix, this blows even more hardcore.

Netflix pays filmmakers a negotiated (but much more “standard”) price per disc purchased.  Netflix pays a negotiated price for a period of time for unlimited streaming.  Obviously they’re going to pay an unknown indie film much less than a film from an established studio with star power.  Thus, the DVD deal is much better for a filmmaker (even established filmmakers/studios).

If people bail en masse from Netflix’s “unlimited DVD” package (which initial user reactions indicate), we stand to lose a substantial amount of expected revenue from this source.

Not only that, but the timing of this announcement was AWFUL.  Netflix will increase their initial DVD order for an indie title based on a higher number of current users with the title in their queue (you can queue a DVD before it’s actually available –not so with streaming titles).  As soon as our agreement with Netflix was secured, we told our fans to place the title in their queue, and many, many people did.  The very next week Netflix announced their plans to change their pricing and plans.

I wonder how many existing “DVD” subscribers immediately bailed on Netflix, thus driving down the number Leading Ladies DVD’s queued.  I wonder how many more will bail before Sept. 1.

Our film is slated for release Sept. 13, 2011.  Just enough time for all our fans to cancel their DVD memberships with Netflix.  Hopefully our fans will wait till the last second to cancel DVD memberships (so the order still goes through –I’m betting Netflix already has this factored in for current orders, however).

Hopefully people will just actually buy the DVD and support independent film.  Here’s a link.

Viva la storytellers!

p.s.  I don’t know if it’s related, but the Netflix widgets for film titles (an image linked to a button that will add a title to your queue) has recently stopped functioning –it’s been down for days.  Hmmm.