Netflix Nosedives

By Will Lyons Staff Writer lyons14@up.edu

Netflix Co. has seen better days. According to Reuters, a business and stock exchange news corporation, over the past two months the company's stock has plummeted over 50 percent following a hotly contested price increase.

After announcing the price increase – from $10 to $16 per month for streaming and mail-in DVDs – the company further angered customers by separating into two services on Sept. 18. The newly branded Quickster has taken up the mail-in DVD service and Netflix will continue to provide instant access to hundreds of TV shows and movies online, according to Reuters.

Reuters and other business analysts believe that Netflix Co. hopes its move will be beneficial in the future as more titles are added to its instant streaming service. Many customers are not willing to wait: more than 1,000,000 customers have stopped subscribing to Netflix after the price increase.

On campus, some students are feeling the hit of the price increase, or at least, their parents are.

"I remember calling my parents and saying, ‘Hey your password doesn't work anymore,'" sophomore Brett Ashley said. "They dropped Netflix because of the price increase and because it's still so accessible."

Ashley is referring to the fact that multiple people can access the same Netflix account as long as the users aren't using the service simultaneously. For this reason many students on campus don't pay for Netflix itself. Instead they use their parents' account.

"(My mom) was going to cancel it, but I told her not to," sophomore Debra Vitorelo said. "I probably wouldn't watch a lot of movies if my Netflix was cancelled."

Sophomore Mark Raniele pays for his own Netflix and is all right with the changes, as he now pays $2 less per month for just instant streaming.

"I'm not going to get the mail-in DVDs anymore," Raniele said. "There are plenty of watchable movies on instant streaming."

After a couple shaky months, many wonder about Netflix's decision to increase prices and split services from a business standpoint.

"From a corporate perspective it's a good strategy," professor Samuel Holloway of the Pamplin School of Business said. "Now how they executed the split, that's a different story."

Netflix CEO Reed Hastings apologized to his customers via email Sept. 18. The email, shared with me by Netflix subscriber and fine arts professor Lawrence Larsen, began by saying, "I messed up, I owe you an explanation." In the rest of the email, Hastings continued to lay out exactly what the changes in price are and how customers can choose between having the combo pack, just Quickster or just Netflix.

"I don't know when they'll rebound, but they will," Holloway said.

Business professor Debra Stevens, who teaches consumer behavior, agrees.

"Netflix might have been surprised when they lost 1,000,000 customers, but they'll always have new ones," Stevens said. "They really were a pioneer to offer a service to browse and deliver DVDs."

It may seem like big businesses don't care about each individual subscriber, and especially about college students, but Stevens reminds consumers how important their dollars are over a long period of time.

"(College students) don't have a lot of disposable income, but if marketers can persuade you to be loyal they'll be able to benefit from your higher earning power," Stevens said.

Some have turned to other websites and services in response to Netflix's fall from grace, including illegal websites, which upload content without the permission of studio producers.

Sophomore Stan Peck has been illegally downloading using "torrents" since before the Netflix debacle, although the UP firewall does put a damper on his on campus consumption.

"The torrent program connects to a web of people who have the file then copies the file for you," Peck said. "It has pretty much anything you've ever wanted unless it's really obscure — and sometimes even then they have it."

Even though Peck has no need for Netflix, he still believes the change in service has adversely affected its subscribers.

"Not only did Netflix alienate people, but it also separated two services, one of which (instant streaming) isn't very complete," Peck said.

Larsen, a film buff who continues to use Netflix and go out to movies, hopes that the spirit in which film was conceived will see Hollywood and independent filmmakers through the digital storm.

"I think if you like film you can't beat sitting in a theater and the communal viewing experience," Larsen said. "You have this cathartic experience that happens when you come together."

Looking for alternatives to Netflix? Check out these:

Hulu Plus: If you really like TV shows this may be your best option for replacing Netflix. You can stream full seasons of TV shows and a fairly decent selection of movies right on your computer, TV (if you have an Xbox 360, Wii, PS3 or iTV) and mobile devices. You can also get a one month free trial if you sign up with your UP email address.

Price: $7.99/mo

iTunes: If you want media content to be downloaded easily, in HD, accessible from all your electronics, sharable and squeaky clean, iTunes still reigns supreme as the center of downloadable movies, music and life in general.

Price: varies

Blockbuster Movie Pass: Um ... Blockbuster? You mean that company where you had to go to a store, rent movies and then hurry back to return them? That's right, Blockbuster is back in the game, and thanks to parent company Dish Network, the former movie rental chain will be getting in the online streaming game. On Oct. 1, Dish customers will be able to purchase a Blockbuster movie pass for only $10 more per month and will essentially receive both Netflix and Quickster (except of course you have to have Dish network's cable). The idea behind this move is that Blockbuster expects to be Netflix's primary competitor in the not too distant future as they try to climb on top of the movie world again, this time with streaming.

Price: $10.00/mo (if you have Dish Network)

Crackle.com: If you're looking for a movie but don't want to spend a dime, Crackle has a pretty good selection of consistently updating movies and TV shows. Right now they have 270 movies available for free online. Crackle has a deal with certain production studios in order to offer their content online to the masses. Do some browsing — what else are you going to do on a school night?

Price: Free

- Will Lyons