Monday, September 19, 2011

Analyzing my Netflix history

I joined Netflix in July 2000, over 11 years ago. In that time, My family and I have rented 481 discs and watched some 462 hours of streaming content. I've rated 2074 movies. I've been a member for so long that my 4-out-at-a-time plan has been grandfathered in at $19.99 for some time, but that ends with my billing cycle next week.

So considering dropping Netflix wasn't really on my radar until recently. But Reed Hastings' recent note got me thinking. Have I gotten my money's worth out of it? So I did some math.

The first chart below shows the 3-month moving average of my rental and streaming history. For streaming, I felt that simply counting shows would overstate my usage for two reasons: (1) We didn't really watch everything we started, and (2) A DVD of a 30-minute TV show typically has 6 episodes, which considering that each episode is typically 22 minutes, works out to 2.2 hours per disc. So instead, I totaled up my streaming usage for the month and divided by 2.2 hours to come up with a "DVD equivalent" metric, so we're closer to comparing apples to apples.

The main point to note from the above is that our streaming usage far outstrips our DVD usage by a significant margin.

Next I took a look at how much my DVD usage was costing me. That's in the next chart.

Hmm. Seems like I could have saved some money by buying discs off from instead of using Netflix at all. In fact, for my first 10 years as a Netflix customer, I was paying $4.61 per movie. But then it got worse. Since July 2010, my average cost shot up to $8.54 per movie. The bargain rack at Target compares favorably now.

But wait a minute, that's not factoring in my streaming usage. So let's do that:

Better - under $2.00 per DVD-equivalent (remember, that's 1 DVD or 2.2 hrs of streaming). Since July 2010, it works out to $1.57 per DVD.

Factor in that as of next week my price for the same level of service based on the average usage I've had since July 2010, my unit cost is going up to $2.50 per DVD. But that's hiding something else: If I were to drop to the 1-DVD-out plan, and maintain current usage, I'd be paying $3.63 per actual DVD-in-the-mail versus $0.81 for the equivalent via streaming.

So I'm left with a quandry. Is Netflix worth it? Sure RedBox is competitive on price with respect to DVDs, but it lacks the selection and I have to go there. Clearly I've been getting more use out of the streaming side. But I am extremely frustrated with Netflix' patronizing attitude towards its existing subscribers. Will I cancel? I'm not sure yet. I'm leaning towards total cancellation just to register my discontent. Not that they'll care. Clearly they haven't thus far.

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