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As Netflix hikes prices and tweaks its content to add more TV programming, some avid fans are wondering if they should cancel their subscriptions.
Netflix has already lost some customers due to the abrupt price hike in July. The newly announced plan to separate the streaming service from the DVD-by-mail service may also cause other customers to flee. And then there was more disruptive news this week, as a company executive acknowledged that movie content, the bread and butter of the Netflix offering, is getting too expensive for streaming. Instead the company will focus more attention on getting rights to TV programming.
It seems like at every turn, Netflix is pushing its loyal customers away. In this week’s Ask Maggie I help a fellow cable cord-cutter determine whether Netflix’s $8 streaming fee is still worth it.
I also help another reader figure out how to maneuver in the tricky world of cell phone upgrades.
Ask Maggie is an advice column that answers readers’ wireless and broadband questions. The column now appears twice a week on CNET, offering readers a double dose of Ask Maggie’s advice. If you have a question, I’d love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put “Ask Maggie” in the subject header.
Is Netflix worth it?
Dear Maggie,
I recently cut my cable cord to save some money. I use a Roku box for all my TV needs. I subscribe to Netflix primarily for movies and documentaries. And I have a Hulu Plus account so I can watch recent and current TV shows.
I read your article from earlier this week that Netflix is going to focus on acquiring more TV content instead of getting more movies. Anyway, movies are exactly what I want from Netflix. I used to really love Netflix, and now I’m annoyed. They’ve increased the price of the service, but I’m going to get less of what I want. Also, if Netflix is focusing more on acquiring TV content, won’t it pretty much have all the same stuff that Hulu Plus has? I’m already a Hulu Plus subscriber, so why should I pay for both? And what are my alternatives for access to movies as Netflix adds more TV content?
Thanks,
Angela
Dear Angela,
Let me start by saying that you and I are in the same boat. I canceled my cable service last winter. And like you, I rely on Roku as my “cable box,” offering me access to content on Netflix, Hulu, and Amazon streaming. In addition to my Netflix and Hulu Plus subscriptions, I have an Amazon Prime subscription, so I also get access to some movies and TV content from there, too.
Until Netflix changed its pricing, I subscribed to the $15-a-month plan that gave me unlimited streaming and two DVDs. I pay $8 a month for Hulu Plus. And the Amazon Prime membership, which also gives me free two-day shipping on items ordered from Amazon, is $80 for the year or about $6.67 a month. That comes to a total TV spend of $30 a month. Even with Netflix’s price hike, which now means I pay $5 more a month, I’m still only paying $35 a month compared to the more than $100 I was paying for cable TV.
There’s no question that this is still a bargain. But I think you bring up a very good point. As Netflix changes its content acquisition strategy, is it really worth it?
When I first cut the cord, I used the Netflix streaming service mostly to watch movies and to catch up on past seasons of certain TV shows. Hulu Plus was where I went to watch the current season of my favorite TV shows. And Amazon I rarely used because everything available for free using my Amazon Prime membership was already offered through either Netflix or Hulu.
My biggest complaint about Netflix has always been that it lacks quality movies for streaming. I understand that a lot of newer movies aren’t offered as part of the streaming service. I can accept that. But what’s more frustrating is that its streaming catalog is clogged with hundreds of really crappy B-list and C-list movies. More often than not, highly acclaimed movies are not available on the streaming service, even if they’re several years old.
My guess is that I am not the only person who uses and views these various streaming services this way. So what value does Netflix add if it stops acquiring more movie titles and instead adds more TV content? To be honest, I’m not sure I have the answer yet.
Netflix CFO David Wells said at the Goldman Sachs conference this week, where he talked about this strategy, that Netflix customers are more interested in getting good-quality content, regardless of whether it comes from TV or a movie studio. And I agree with this to an extent. If it’s quality programming, I’ll watch it.
But Netflix must continue to offer a differentiated service. Up until now, that differentiation has come from the larger movie catalog and the fact you don’t have to suffer through commercials.
As it adds more TV content, Netflix risks competing more directly with Hulu. And that could be dangerous. Netflix and Hulu already have some overlap in terms of content.
But they’ve each tried to carve out their own niche in how they’re offering that content. For example, Netflix and Hulu Plus each offer the TV show 30 Rock. On Netflix I can’t watch the currernt season as its airing on TV, but I can watch all previous seasons back-to-back without any commercials.
Meanwhile, Hulu, which inserts short commercials that cannot be skipped, typically offers me the most recent season of 30 Rock. Still, the advantage Hulu offers me is that I can also watch the current season of the show. I just have to wait until the day after it airs on regular TV to stream it.
If Netflix continues this existing delivery mode, then it could be enough to keep subscribers on the service. But if the company starts monkeying with how many seasons it makes available and when people can view them, it risks losing my business.
So for now, I am going to keep my Netflix service. It doesn’t offer me everything I want, but it offers me enough to pay $20 a month for DVDs in the mail for the latest movies plus unlimited streaming for content that’s available on that service.
Now for the second part of your question: Where can you get access to more movies?
There are other services you can access through your Roku box that also stream movies. Hulu has started offering some movies. Its catalog is not as extensive as Netflix’s, but it does have some movies. Amazon streaming also offers movies. Unfortunately, what’s offered for free as part of the Amazon Prime membership is similar to what’s offered on Netflix and Hulu. But you can get newer movies and even great older movies that aren’t available on Netflix or Hulu for rent or purchase on Amazon.
And there are other ways to get movies, but it might require that you buy a different box, gaming console, or hook up a PC to your TV. For example, Apple TV, which costs about $100, offers movies and TV shows through Apple’s iTunes store.
Movies can also be purchased through Google’s Android Market for use on some Android smartphones and tablets.
Wal-Mart has a streaming service it calls Vudu, which is offered on the PlayStation 3, Boxee, iPad, and Windows-based PCs, allows people to rent movies for between $1 and $5. It also offers some titles the same day they’re released on DVD, unlike other services that require waiting periods.
And then there are streaming services that are available through paid TV subscriptions. There’s a service called Epix on the Roku box that’s offered to paid TV subscribers on Charter, Cox Communications, Dish Network, Mediacom, Verizon FiOS, and some Insight and NCTC subscribers. But its catalog is similar to Netflix’s catalog.
Dish is also expected to announce a movie streaming service with Blockbuster later today. Like the Epix service, the Dish/Blockbuster streaming service will likely be available for Dish satellite TV subscribers. But the company may offer a standalone service for non-Dish subscribers in the future. And that service could offer a viable competitor to Netflix. Stay tuned for more details on that.
What all this means for cord cutters like you and me is that for the widest and best selection of movies, we’ll likely have to rely on DVDs. So you may not want to cancel that Netflix, or should I say Qwikster, subscription just yet.
Confusion in smartphone upgrade discounts
Dear Maggie,
I have a family plan with three lines all with “dumb” phones. My wife and I have data plans ($10) and text plans ($5) on our phones. We both have the LG ENV Touch. And the third line has just the basic service. My wife is looking to upgrade to an iPhone 5 and I thought since we got our phones at the same time, we would both be eligible for an upgrade. However, when I log on to the Web site it says that we are all eligible for upgrades, but only my line can receive the subsidized price for a phone. The other lines must pay full price if they want to upgrade.
This seems unfair to me since I would be asked to pay the full price for service and a data plan on each of these lines if I were to upgrade both to a smartphone. The main issue here is that I’m not the one looking for a smartphone, so I don’t need the upgrade. I’m happy using my LG phone, because I actually use my phone for calls, not Web surfing on a tiny screen. I use my iPad2 with Verizon 3G service for that instead.
Is there a way to get the discount for both of our lines if I did want to pursue an upgrade to a smartphone for us both? Or if that isn’t an option, apply the discount for my line to hers? Our contract is up in January.
Thanks,
Cisco
Dear Cisco,
Let me start by saying you are free to upgrade your cell phones whenever you like. You can buy a new phone every week of your contract. But only the first one you buy when you sign up for the service will be at the discounted and subsidized price. After that, you have to pay full price for whichever device you want.
Verizon Wireless has long had one of the most confusing discounted upgrade policies of any wireless carrier. And to make matters worse, it changed its policy to “simplify” things in January. So now there are customers, like you, who signed up for service before January 16, who are subject to one policy. And customers who signed up after January 16 who are subject to a different policy.
The old upgrade and device discount policy allowed subscribers to get a subsidized price on devices early. Depending on how much you spend on your monthly service, you could get a discounted price on a new phone a year before your contract expires. But if you have a family plan, only the primary line is eligible for the early upgrade.
Under the new policy, there are no early upgrades. And every customer is eligible for a new phone at a discounted price 20 months into a two-year contract.
What has likely happened in your situation is that your account is eligible for an upgrade discount, but because it’s a family plan, only the primary line can get the discount. The other lines will have to wait until their individual contracts expire to get the discounted price on new phones.
So you have two options. The first option is you and your wife can just wait. You said that your contract expires in January. So at that time, your wife will be eligible for the new iPhone 5 at what ever discounted price Verizon is offering. And considering that this new iPhone hasn’t even been announced yet, it might not be too much of a burden to wait.
But if she really, really needs the new iPhone the month is comes out, you can buy the device at the discounted price and activate it on your line. And then you can call customer service and have the iPhone switched to her line. Keep in mind that this will extend your contract an additional two years and not her contract, since your line is the one that is being upgraded with the phone discount.
I hope this helps and good luck.
