Why Do People Sign Up For Netflix?

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Netflix Thumbs UpI don’t understand why people have Netflix subscriptions.

I never rent movies and when I do, I usually turn to the $1 a night RedBox vending machine at my local Giant. For $1.05 (MD sales tax is 5%), I get a recent release that I happened to miss in the theaters (I enjoy going to the movie theater, paying $9, and watching a movie with my girl) and most of the time I can find a coupon online that gives me the rental for free. That being said, I don’t really understand why people sign up for a recurring rental service when something like a RedBox exists (unless it doesn’t in your area). And no, Redbox isn’t paying me. In fact, if you sign up for Netflix through that link above, Netflix is paying me a commission so enjoy my brutal honesty.

Let’s take a look at the cheapest Netflix plan, $4.99 for one movie out with a maximum of two movies a month. That makes it $2.50 a movie with the only advantage being that you can have that movie for as long as you want. How likely is it that you’ll be watching that movie more than once? I’d say the probability of that is exactly 0%, certainly 0% within a one month period. Netflix says they can send out a movie within a business day, and let’s say they’re right, that means the lag time between when you order a movie and when you get it will be at least one business day. So, if you wanted to watch a movie tonight, you wouldn’t be able to unless you already had it in your hand.

Like I said earlier, I’m not trying to validate the RedBox video rental model. What I’m actually trying to do is understand the psychology behind why someone would use Netflix because everything I read about American consumerism seems to point towards RedBox and not Netflix. For example, Americans are impulsive. That means we don’t, in general, plan what we will watch on Thursday the Tuesday beforehand. We plan what we watch on Thursday night at around Thursday afternoon. Another point, Americans love cheap. Redbox is $1.00+tax a night, I will only watch the movie for one night, so it’s cheaper than Netflix. Why pay more just so I can have it sit around on my coffee table?

So, for all those folks out there that use Netflix… why?

(Photo by brymo)

{ 105 comments, please add your thoughts now! }

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105 Responses to “Why Do People Sign Up For Netflix?”

  1. thomas says:

    the cheap plan is a ripoff. I’ve had Netflix for awhile, and I’m pretty sure that I’ve come out on the better end. My queue is over 400 movies. Movies I know that aren’t available or sold at *ockbuster or whatever movie store is around. They also have HD movies, which will be good once i have a HD player. You can also watch movies online, which has come in handy when working on the road.

    The dollar movie is okay, but that’s only for new movies.

  2. Forgive me for not reading through all 54 comments and any redundancy that may create!

    I use Netflix for a couple of reasons:
    1) TELEVISION. I don’t have a TV, so I use Netflix to get DVDs of TV shows. Netflix is way cheaper than cable, and significantly cheaper than renting all those DVDs from a video store.

    2) Selection. My reluctance to spend $11 on a movie ticket often means that I miss movies I want to see. Many of them are arthouse films that video stores won’t necessarily stock, but I can always count on Netflix.

    3) Rental prices. Last time I rented movies from a video rental store, I paid $12 for two. That means if my boyfriend and/or I watch 5 Netflix DVDs a month on our unlimited 4-at-a-time plan ($26), we come out ahead. We usually do.

    And then there’s a certain extent to which the flexibility and convenience of Netflix (as well as their impeccable customer service) is worth paying for.

  3. Allison says:

    I use Netflix for a couple of reasons

    1) The closest Blockbuster or such is 50+ miles away
    2) The local rental store rents for $4 a movie.
    3) I can get older, more obscure titles from Netflix
    4) We do have a redbox, but it’s only new releases

    So, simply put, it’s quite convenient and inexpensive for me

  4. RR says:

    Exactly! Why the heck do so many people use Netflix? Maybe I’m just cheap, but I use the library, which has new releases (yes, you have to put it on hold and wait a while), older movies, and even tv shows. I get to keep them for two weeks, more if no one else wants it, and the only OOP cost is a late fee if I forget to return it on time.

    Now, if I lived in an area with a really crappy library system, I might consider Netflix.

  5. Steve says:

    I use NetFlix because it’s convenient, cheap and their selection is huge. For $8 a month, I can watch around 15 movies and TV series. And no badgering to return any movies. I thought it was a perfect deal.

  6. escapee says:

    As a lot of other people have mentioned- We have Netflix because we don’t have cable TV.

    I don’t go to Giant and I have never seen a Redbox machine anywhere I have been- maybe they aren’t in my state?

    Our Netflix is $17.95/month and we can have 3 movies out at a time. We get probably 15 movies every month, which works out to about $1.20/movie. And I don’t need to get in my car and go anywhere to pick them up or drop them off, so I save in gas, and more importantly, time. I think it makes financial sense for our family.

  7. juliamo says:

    we pay 18 a month and go through about 20 dvds a month, so we are already down to less than a dollar a rental- new releases, tv shows, classics, whatever plus, no car usage! then add in the fact that we can watch 18 hours a month online at no charge, and you just can’t beat it!

  8. Catherine says:

    We have Netflix for the following reasons:

    1) Deep catalog. Especially foreign movies and music/concert releases, for us. (We rarely watch recent blockbusters.)
    2) TV shows. We don’t have cable and aren’t home enough to watch a weekly show regulary anyway.
    3) Convenience and time-saving. Currently, the nearest video rental store is a 10- to 15- minute drive away. Add to that time spent browsing and waiting in a long line, and it could take over an hour just to get the movie. By that time, we’re tired and probably out of whatever time we had to watch something. (Plus, there’s the cost of gas and the guilt about polluting by driving just to rent a video.) We also may not have the time to return the video by its due date. I may keep a video for a while not because I’m watching it more than once but because I’m watching it in installments over four (not necessarily consecutive) days.
    4) My husband finds the process of getting and returning the movies by mail to be kind of fun.
    5) “Turn of mind.” We tend to think that if we’re going out for entertainment, we’re going to DO something while out, not just get a video from a box and come back home. (Somehow, I find that a touch depressing. Probably it’s just me–I tend to find errands in general to be a little depressing.) Another connection I didn’t make until just now is that I do the majority of my shopping online. I, in general, prefer to select what I want from the widest possible options and then just have it shipped to me.

  9. Amber Yount says:

    I get two movies at a time and only pay like $15 a month, assuming I watch them the same day and send them back the next, I normally get 4 movies a week, sometimes more depending on the mail… our local movie rental place, their movies are like $3-4 to rent for 5days only. You do the math.

  10. Michelle says:

    I do like Redbox for the “hey-lets rent a movie right now” moments, but unfortunately, I have recently found myself car-less… which means that I can no longer drive to the Redbox or any other video rental store (none of which are within walking distance) So I signed up for Netflix because they come straight to my mailbox. The selection is unbeatable, and I like the surprise of getting a different movie once or twice a week.

  11. Anthony says:

    My girlfriend and I watch between 2-3 movies a day between the two of us (we like different kinds of movies and she works from home). So, let’s assume 2.5 movies a day times 7 days a week comes to 75 movies per month. Jesus, really? Okay, 75. Redbox doesn’t have anywhere close to the selection we require, even if we watched every movie they have at the box. Also, the cost of $75/mo. vs. $35.99 we pay to Netflix (plus tax for both) speaks for itself. On top of that, we can keep a cue, watch previews, look at reviews, rate and discuss movies, share movies, ratings and reviews with friends, and watch a lot of movies online (Netflix has thousands of movies stored on their web site for instant watching). Also, no late fees and no going out to Blockbuster/Redbox to return movies.

  12. Fortunate says:

    Wow! So I guess it’s clear why Netflix works for some people. I am one of those people and I use it for many of the reasons cited. I don’t have a TV. I’m afraid to get a TV because I find that commercials make me want to buy things I don’t need. Going to the rental store means going to a shopping center where there is more temptation to buy what I don’t need. And I look at going out to the movies as a special treat where I know the experience itself will be worth the time and money (like getting together with friends or on a date). Especially since movies are expensive and nothing sucks more than paying $10 for a movie that isn’t any good!

  13. jim says:

    I understand now that most people use Netflix for the reasons I didn’t realize before, that is they like the non-traditional stuff (like indie movies) or television DVDs, which RedBox does a poor job of service. I’m not a big movie watching person in the first place and I’m the typical movie consumer, watch the big blockbusters, so Netflix might not appeal to me but it certainly has a following. Now where did those 200k video-by-mail renters go? (between Blockbuster’s loss and Netflix’s gain, there was a negative 200k in total customers)

    • Michelle says:

      The loss is for people like you who have become a Redbox customer apposed to Netflix.

      I personally use both.
      -Redbox for the new releases i want to watch now
      -Instant Que for most of what I watch through Netflix (which fits into typical American consumerism behavior)
      -video by mail for the rest.

  14. Randall Bott says:

    Has anyone heard of a library? I get three or four movies a week there and many are just released. Best of all you can go online and reserve the ones you want or have them sent to a library close to you. The cost is zero.

  15. Caeli says:

    We don’t have RedBox in our area. But we do have a Blockbuster right next door. With the online membership, I pay $17/month for two movies at a time, unlimited amount per month. When I pass the store on the way home and have finished a movie, I return it to the store. They treat the return envelope as a coupon for a free movie, so I pick out a brand new one, absolutely free. They also send me a coupon for an extra free in-store rental once a month. We watch a movie every night. Your RedBox would cost me $30/month.
    For another $5/month, the store has a snack card. Every time you rent a movie in store you get to choose any snack $1 or less for free. Since we are there at least every other day getting movies for free, this is a great deal.

  16. wewally says:

    It limits my kids to two movies a month. I don’t have to drive anywhere to get or take back a movie. It has lots of older g rated movies for the kids.You never have to wonder what the next movie is going to be.
    Love it.

  17. Webomatica says:

    I really enjoy netflix, and it saves us money. Reason why: we don’t subscribe to cable because of it. Only the best tv shows end up on DVD anyway.

  18. Greg says:

    I’m sure someone else already brought this up, but our family enjoys classic movies that we can’t get at Redbox or at our local Lackluster Video or our local WhollyBored video store. So, for us, the subscription fee is not really about saving money or impulse buying…it’s totally about the fact that I can show my pre-teen kids great classics like Ben-Hur, 12 Angry Men, The Music Man, South Pacific, etc.

  19. Candy says:

    We watch up to 20 movies a month (no TV/Dish/Cable connection), so the $9.99 saves us up to $11.

  20. ericaceous says:

    I have the 3 at a time, unlimited plan. My household has no cable tv, and without it we get 2 TV channels. We would rather watch movies (or premium cable dramic series like The Sopranos and Rome) than network television anyway. Compared to basic cable, netflix is much less expensive even without the advantages other have mentioned about the deep catalog and convenience. For my carless household, having a movie come in the mail instead of having to walk 2 miles or catch a bus to go to the store is priceless. Although my local grocery store just got one of those redbox things, we have yet to notice a movie in there we actually want to see: they typically have 20 selections of genres we dislike.

  21. mizjellybean says:

    Red what? LOL. Never heard of Redbox. Just looked it up though. None in my area at all. Probably would not use it much though. Netflix is great. I can fill up my queue, get it out of the mailbox, and drop it back in the mailbox. It’s called convenience.

  22. Gabe says:

    That’s funny. I’ve often looked at those RedBoxes and wondered who would rent movies from them. I’ll admit that before I started using Netflix the idea sounded crazy, since I was used to browsing through Blockbuster while deciding what to rent. But now that I use it, I love it.

    Like others have mentioned, the great majority of what I rent is TV shows, because it’s great to watch them in big chunks instead of having them doled out in pieces along with scads of commercials.

    I also just built a home theater PC which is hooked up to our big LCD TV in the family room. If you weren’t aware, Netflix has an On-Demand function now with about 5,000 titles that you can watch via the internet. We just got finished watching seasons 1 and 2 of the Office.

    Honestly I think that’s the future of movie rentals. Once the majority of households have broadband and they work out storage and distribution issues, there won’t be any point in physical rentals. My dream set up is having Netflix’s entire catalog available online.

  23. JB says:

    Convenience. Don’t have to spend gas/energy/time going to the video store and renting/returning movies. The no gas/time thing is the biggest reason for me.

    Online queue is easy to manage, add movies you want to see and they will be sent to you. No searching for a movie to be in stock or not.

    No late fees, these can add up for some people. Same price per month, this can be worked into a budget easily.

    It’s cheap, mine is 10 dollars a month and well worth it. Hardly see movies in the theaters anymore. Sometimes I feel like I’m ripping them off it’s so cheap.

  24. Macintosh100 says:

    Hi there, this is my first post on your blog. I really like the stuff you write. But, as a big fan of Netflix and also a shareholder, I beg to differ. I really enjoy getting the movies in the mail and then sending them back the same way. I have the $8.99 plan and I really use it.
    Netflix has some really good titles for kids as well as grown ups. Not to mention the TV shows that you can get, like the sopranos.
    I think in the near future we are going to see an explosion of VOD (video on Demand) and netflix is going to be at the center of it. Keep an eye on the stock.
    humbly ,

    P.S. Please check out my website if you get a moment and post a comment. I would appreciate it. Thanks.

  25. big mike says:

    I like going to the redbox, I only rent newer movies and the $1 price is a great deal. I would never consider netflix.

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