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The Wall Street Journal promised and, on the last Friday of October, Netflix delivered. The long foretold streaming service rate increase will be hitting my bill before November ends.

I wrote before about how Netflix and The Journal seemed oblivious to the coincidence whereby their subscriber count dropped just as they last hiked their prices. I still consider this a case of blatantly obvious cause-and-effect- and yet intervening Netflix performance may lead one to a different conclusion. Certainly the management folks at Netflix are not buying into my analysis.

Netflix has continued to mollify their investors by identifying ways to squeeze more money from their existing subscriber base. A few quarters ago, the company identified “password sharing1” as a major drag on their business model. At the time I wondered whether “cracking down,” removing Netflix access from those who weren’t paying or weren’t paying adequately, would really help their bottom line (rather than simply reducing freeloading). It did both. Many, if not most such freeloaders seem to have broken down and signed up for a legitimate account, boosting Netflix’s recent results. It would appear those freeloaders were both able and willing to pay Netflix’s subscriber rates – they just didn’t feel they had to while someone was willing to give them free access.

Thus, investors have also applauded Netflix’s plan to extract more from their customer base via the price boost. Is the possibility that subscribers might leave Netflix due to the higher price being considered? Or is it just a fair assumption that any losses will be made up by those who remain to pay the higher fees?

This all leaves me with my own decision to make. I can eat the couple-of-bucks a month and resign myself to paying more for less. I can, instead, switch to the lowest tier of service. In exchange for about $60-per-year savings, I’d have to swallow the highly-unpalatable prospect of paying a monthly fee to watch streaming ads. Third option – I could say goodnight and goodbye to Netflix and do without.

Ironically, a WSJ article last week suggested that the ad-supported tier is not going to bring in much revenue for Netflix. Their issue is that there are too few takers so the model doesn’t have sufficient scale to efficiently bring in advertising dollars. I gather that it is their expectation that rising prices will generate more ad-viewing customers and the revenue situation will eventually stabilize. It could also mean that Netflix will run a middle-term loss leader, subsidizing its entry-level tier as a way to attract viewers who can then be upsold on one of the higher-priced options. It might also mean that the lowest price offered now, like the DVD service, is not going to be around in a few years.

If that weren’t enough to chew on, I have one more factor distorting my decision making. Years ago, possibly in reaction to a similar price hike, I signed up for the then-bargain-level service. I am paying a little less than $10 per month to receive a lower-resolution delivery. That price point, even after a $3 rise, is no longer an option for new subscribers. Netflix reminds me that if I downgrade my service now, I will never be able to return to that service which I have long enjoyed. The next available fee above the ad-tier runs about $20 per month.

So what to do? What to do?

I think I’ll stick with what I have until it’s time to be billed at the new rate. Until then, I’ll concentrate my mind on the question of how much Netflix, in its current form, is actually worth.

As I try to figure out what on Netflix and/or Amazon I’d actually want to watch, I noticed that my choices are comprised about 80% by “series” offerings and with a heavy skew towards exclusive content. Not surprising, this is consistent with the business model touted for Netflix and (to a lesser extent) Amazon in the financial pages. In some ways, I see it as an attempt to return to the “glory days” of Network-dominated TV when a provider could dictate what we watched and when.

But that’s not what I want. It runs counter to a major reason I’ve been so pleased with this new golden age of television. After a decade or so of hearing about how great The Sopranos was, I could decide to try it for myself. I could choose to return to old Seinfeld reruns, or grab the latest Game of Thrones season as soon as it hit DVD. Even when I am genuinely interested in, say, the latest The Haunting of Bly Manor, I need to jump into it while mostly blind. Can we really expect objective reviews of content exclusive to a single streaming service?

So I ask myself, is the likes of Netflix becoming not worth it at any price? Is the price just getting “too damn high?” Or is 12 bucks a month a reasonable amount to part with so as to have an ever-present, on demand (and commercial free) entertainment menu; ready whenever a mood, whatever that mood, strikes me?

– Photo by Pixabay on Pexels.com
  1. Surely we all know what this means. Maybe not. The idea is that there were a large number of viewers who would, despite a lack of cohabitation, share a single account in violation of Netflix’s service terms. ↩︎