Tuesday, May 16, 2006

Netflix and "perceived value"

Hunter McDaniel's comment on my previous post inspires me to look at the perceived value of Netflix versus other forms of entertainment. Hunter says "my brother-in-law pays $75 per month for a satellite package, and ends up mostly catching the last half of movies he has already seen 10 times. Nonetheless he thinks he's getting a good deal, and thinks he doesn't have enough time to get his money's worth out of an $18 NF subscription."

With Netflix, we think in terms of "perceived value," in other words, whether we are getting a good deal. With other things, like water, electricity, cell phone minutes, cable TV, we value these things according to how much or how little we need to use them. But with Netflix, the utility, and therefore, the perceived value, of the DVDs is connected to how many we can get and watch in one month. This makes us feel as though we need to increase utilization in order receive the value we think Netflix "owes us," which, as Hunter pointed out, is where the idea of "throttling" has its basis.

Netflix has other valuations, other than how many discs you get per month. I think Hunter's brother-in-law doesn't feel that he is wasting money on satellite TV, because "he has 500 channels." I don't worry about throttling, because "I have 60,000 movies" through Netflix. Netflix is the greater value to me.


  1. As I was reading this post, it suddenly clicked. Netflix is like an "all you can eat" buffet. You pay the cover charge and proceed to eat as much as you possibly can -- usually too much. There seems to be a sense that if you don't eat a certain amount, you're wasting money. Then after you're stuffed, you wonder why on earth you ate so much.

    Maybe the reason we feel bad when we can't get to a movie and don't want to send it back is the famous sign above most buffets: "Take all you want, but eat all you take."

  2. The choice is perhaps why I don't like Netflix anymore. As mentioned previously, I'm very pressed for time and entertainment isn't worth while for me at present if I need to spend a few hours a week lining up movies on their website. Somehow, spending hours on the Netflix site trying to find a movie that was "worth that value" got tedious. Now I pay $X/mon for the movie package and sometimes it's not the best, but it's there and easy. Really didn't think I'd be saying this but as my financial base grows and time reduces it's a huge flip-flop in preference. When I was in college, there was no CATV, satellite TV, or satellite radio, only entertainment was from Netflix, carefully picked. Now with more money, I'd rather just have convience. I'd probably pay $30/mon if Netflix was video on demand and had something akin to a preset schedule you could look at for help if you didn't know what to do.

  3. I've often wondered if Netflix should offer a "queue-less" service to meet the needs of customers like 'x' Perhaps it could work something like this:

    0)Netflix chooses what to send you.
    1)Price it at $25 per month for 12 rentals, still cheap compared to cable.
    2)Specify what you want in terms of genres analogous to cable channels (Major Network TV, HBO series, Classic Movies, Kids, Science/Nature, Anime, etc.)
    3) Have weights representing how much of your subscription to devote to each genre.
    4) A very generous allotment for how many discs one can have out, maybe 10-15 at a time.
    5) Ratings on the website are used to improve selections by Netflix but are not required.

  4. Hunter, I'm sure there's folks out there who would like that, but it sounds to me too much like TV.

    I do not understand why it would take hours finding movies to rent on Netflix. I managed to fill my queue quite rapidly, within days of joining.

  5. My queue was filled long ago. I don't have an issue about my queue being full. Now I occassionaly shuffle around whats on my list according to what I'm in the mood for next. I'm busy too and it works for me that when I've got that free minute, I've got a movie that I already know I wanted to see handy. I don't have to take it anywhere when I'm done, or go anywhere to get it. Thats Netflix convenience for me.

  6. I used to have a few pay channels but cancelled them because of the timing of when they were on. NetFlix is a godsend for people with kids. The best part is obviously the convinience. I was thinking about how many movies I see on the pay channel plus renting and it was nowhere the movies I can see now on NetFlix.

  7. I think there's advantages to both types of viewing, but I also think it depends on how you watch "stuff". I know many, if not most, people who have premium movie channels who simply sit down to watch whatever catches their interest at the moment. Doesn't matter if the program just started, is almost over, or is halfway through. That's fine for much of the drivel that's on typical TV, but I think you are shortchanging yourself if you are watching movies that way. (I often wonder if these people would go see a movie in a theatre if offered the same way, even if proportionally priced.)

    I have satellite TV service, with which my package includes the Independent Film Channel. There a lot of movies on IFC that I want to watch, but it seems none of those are ever on when I'm actually watching (or think of watching) the channel. Same way with some of the 'hot' series on regular cable. I end up watching or recording an episode out of sequence and find out it no longer makes sense, so it's much easier to rent it via Netflix when it comes out on DVD (or just buy it, as I alluded to in another post).

    I will often alter or rearrange my Netflix queue to reflect my mood at a given point in time, and sometimes it doesn't work out, but it usually does. Between my "movie waiting for me at home" and my own personal collection, I can usually find something to watch that doesn't result in me flipping through random channels to find something interesting at the moment.