One answer to the Netflix price hike: diversify your media portfolio

Netflix’s strategy has yet to gain acceptance

There’s been a lot of uproar about Netflix’s recent price hike of up to 60 percent. Customers who were paying $10 a month for streaming and DVD rentals will now have to shell out $16 for the same service.

The uproar has been so strong that people have lost sight of the game. Many people are just cancelling out of anger, leaving all reason aside, as this comment illustrates.

“I can definitely afford it but I dropped them on principle,” said Joe Turick, a technology engineer in Monroe, N.C., who has been with Netflix for about a decade, canceled his subscription within an hour of learning of Tuesday’s price changes and plans to try competitors. via stltoday

You can get angry at Netflix, but that still leaves you with one big problem: namely, alternatives to Netflix are just not very good. You simply may not gain that much by cancelling.

So what’s the answer to the Netflix price increase?

Rather than cancelling Netflix altogether, a more reasoned approach is to figure out a best response given the current options and prices.

Just as someone might create an investment portfolio to capture returns at a low risk, one can look into making a “media portfolio” to maximize media options at the lowest cost.

Here are a few ideas on how to mix between the media options.

1. Alternate Netflix DVD and streaming month by month

Since each service costs $8 a month, an obvious way to keep costs the same is by alternating the two services.

This is not likely to please people who are currently enjoying both services simultaneously. But if you truly consume that much media, paying $16 a month is not an unreasonable cost, as pointed out at this article In Defense of Netflix.

2. Rotate Netflix DVD, streaming, and Hulu+

If you want even more selection of TV shows, you can add in a month or two of Hulu+ which also runs around $8 a month. Hulu+ offers a great selection of current TV shows, and it has recently added some films from The Criterion Collection so you can get classics like Seven Samurai.

3. Get Netflix DVD for 5 months, streaming for 4 months, Hulu+ for 2 months, and Redbox / iTunes / Blockbuster 1 month

This is the option I am leaning towards. I just made up those numbers, but the point is I am planning on rotating between a variety of media services.

It might sound overly complicated, but I think it has merit.

One of the things people commonly complain about is how each of these services have limited selections. But this is an artifact of viewing habits: it is because people use a service so much they exhaust the supply of desirable titles.

You can solve this problem by taking a break and letting new titles come in. You might not want to watch anything on Redbox now, but I bet if you wait for a few months, there will at least be a few titles you’ll find worthy.

I do something even more ridiculous and I tend to write down movie and TV titles that I want to watch. While I go through the list, I’ll jot down other recommendations.

I usually end up with a lot of hard-to-find titles (hence my heavy favoring of Netflix DVD), but I also get enough popular movies that I can find at my library or at a Redbox kiosk.

The options listed in this strategy, by the way, usually cost me less than $8 per month. That means I’ll spend no more than $96 a year–which is a 50 percent savings over the $192 a year people could pay for Netflix streaming and DVD services combined.

It may take a little more planning, but alternating services can definitely pay off.

In conclusion: mix it up

Yes, it sucks that Netflix raised its price on its services. But that does not mean it’s a good idea to entirely drop a service that still has value.

The days of subscribing solely to Netflix might be over. But mixing in the Netflix collection with others is a fine way to enjoy plenty of media at an affordable cost.