In Defense Of Netflix

Netflix recently announced that it was jacking up its prices 60% to its existing customers, which — surprise! surprise! — caused nearly every Netflix customer with a Twitter or Facebook to bitch, moan, and complain about it on their social network of choice.

I have a message for Netflix customers: Quit your effing whining.

Netflix was well justified in doing what it did. Here’s why:

1. The CEO took a pay cut in 2010 and has to make it back. In 2009, Reed Hastings made $1 million in salary. In 2010, his salary was cut to a little more than $500k, which is where it stands for 2011. How the hell can he be a titan of industry if he isn’t making a mill per year? He can’t. You have to pay for that, Netflix customers. Sorry.

2. It’s the right thing to do for the country. Netflix’ provision for income taxes in 2010 was 5% of revenue, which came in about $2.1 billion. In other words, it paid out more than $100 million in taxes. If Netflix’s revenue jumps 60% as a result of its price increase — to more than $3.5 billion — than it will pay out roughly $173 million in taxes this year. And that’s good for America, folks.

3. You deserve to pay. If your lazy ass is sitting around watching all those DVDs every day, then you should have to pay for that privilege.

Netflix should have raised its prices by 70%. Enduring a little criticism on Facebook is a small price to pay for making this country a better place.

9 thoughts on “In Defense Of Netflix

  1. This is some of your best writing ever. My lazy ass does sit around all day watching DVD’s – the ones that came in the mail or can stream live on my iPad – so I happily agreed to pay the increase but knowing that I will be contributing to reducing the deficit – I say play on!

    Thank you sir,
    D.

  2. Bear in mind Netflix used to be a one-stop shop for all great indie films. Now they won’t carry most of them unless they make a very high amount of sales in theatrical or home video. They’ve become commercial just like the mediocre Hollywood Studios, hence less and less special. But I guess putting profit before inspiring people is the great American way.

  3. Unfortunately, subscribers so upset and canceling their DVD-by-mail service will lose out on the only exercise they were getting … going out to the mailbox to get their DVD. Suggestion: NetFlix should immediately partner with Dominoes to deliver their DVDs with pizza (and breadsticks … and soda … and wings … and lasagna … and …) … and then use their watched DVD as a $5 off coupon on their next pizza order.

  4. As a Canadian customer,
    A- I don’t care about the taxes the American Government makes off Netflix.
    B- I don’t get access to more than 50% of the Netflix catalogue anyways. I was already considering unsubscribing because of that, and a price hike may just push me off the fence. IF it isn’t accompanied by the release of more shows and movies that are currently unavailable outside of the US.
    Not that you would care what happens outside your borders anyways. But there you have it.

  5. @AngryFrenchCanadian: Totally unfair accusation. I care very much what happens outside U.S. borders. In fact, which Netflix movies Canadians get to see is 41.598,795th on the list, right after worrying about the morning traffic jam on the Dempster Hwy in the Yukon Northwest Territories.

  6. As with most things in our free market society, there’s an easy solution: if you value having the money in your pocket more than you value the red envelope in your mailbox, then cancel your subscription. As for me, I’m not sure if I will keep, adjust or cancel my Netflix membership as a result of the price hike. But I’m sure as heck not mad about a company changing their prices–they can do whatever they want, and the consumer can too.

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