Update: Representatives from Netflix have let us know these lower-priced plans are part of a test for selected Netflix subscribers, and the current prices that were lowered last month remain for new and existing customers.
Netflix is cutting the price of two of its most popular plans by $1 today, less than a month after its last cut in July. The pricing hasn't been changed on Netflix's rates page, but the company has been sending out rounds of e-mails to its customers about the change since last night, and made an announcement about it earlier this morning. The change covers the two- and three-out-at-a-time plans, the latter of which is the most popular and competitively priced.
The move is the latest in a series of aggressive cuts to compete with Blockbuster's popular Total Access service, which exploits Blockbusters brick-and-mortar stores to provide on-the-spot rental exchanges for about the same price as Netflix's offerings. Netflix has since fought back with its video-on-demand Watch Now service, which competes with Amazon's Unbox, and Movielink, which Blockbuster snapped up last week for just under $7 million. Interestingly enough, with this morning's change, Netflix is also slicing an hour of Watch Now usage off each of the plans, cutting them down to 13 and 16 respectively.
The three-at-a-time plan is Netflix's most popular, and started out at a flat $19.99 in late 1999. Both Netflix and Blockbuster have since been fierce competitors, lowering prices and adding new features to their services, despite the increasing costs in gasoline and postage.
Editors note: This story incorrectly reported that Stage6 operates on an H.264 codec. Stage6 runs on the DivX codec.
The Internet was supposed to be the primo way to distribute movies, but the past week has seen the sector take some body blows.
Publicity photo from movie '300'
(Credit: Warner Bros.)Google told customers on Friday that it's getting out of the video-on-demand business. Earlier in the week, five of the top motion-picture studios unloaded Movielink when they sold the online VOD service to Blockbuster for around $20 million, according to the Wall Street Journal. The cost to develop the service: $100 million.
Even good news for online video came in a bit smudged. Joost, the video service that operates on peer-to-peer technology developed by the creators of Skype, announced that it has topped 1 million users. The privately held company has signed content deals with some of the biggest entertainment companies, including Viacom, Warner Music and the National Hockey League, and done this while being in business for less than a year.
But Joost continues to wrestle with quality issues.
JoostTeam.com, a blog dedicated to delivery news about the site, compared the quality of video at Joost with that from Stage6, a video site created by DivX, a maker of video codecs. According to JoostTeam, DixX's codec performed better that Joost, which operates on H.264.
All of this only proves that online video still has plenty of technology hurdles to overcome and is still a long way from supplanting traditional television or movie rentals.
Critics blame Movielink's failure to attract a large audience on the company's refusal to relax some of the Digital Rights Management (DRM). The service didn't allow users to burn movies they purchased to disc.
Download speeds at most of the top online VOD services take longer than it does to walk to the nearest neighborhood video store. Video quality is often inferior to a DVD. Selections are modest at best.
The best VOD experience I've had recently was this weekend at my brother's place in Los Angeles. He's a Time Warner subscriber. We watched the robe-and-sandal epic, 300. The picture quality was great; we saw as much blood and gore as any DVD could offer. Scrolling through the purchasing menus took just minutes and the cost was $4.
His service also offers Howard Stern, education shows, music videos, the Food Network, Comedy Central and a lot more. I know buying videos from a cable provider or introducing the words Time Warner into a tech story doesn't sound sexy.
But darn it if the service didn't work and work well.
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