Netflix: No discount for the "economy size".

Posted by Matt

I just received an email containing what I thought was bad news from Netflix: they are discontinuing the use of profiles within their customer accounts. I'll get to the silver lining in a minute, but first, some background is in order.

As I've mentioned before, my wife and I currently share a Netflix account and have separate profiles. This spares us from arguing over how to order the list of movies we want to see and we also get recommendations from Netflix that are tailored to our individual rental histories. We typically each have movies at home from our queues that we both want to see, but also a disc or two that we can watch if the other person is not at home or too busy for a movie.

We were at first very disappointed to hear that we were going to have to share a queue. We considered setting up two separate accounts, but assumed that there would be additional expense in switching from a single 6-disc account to separate 3-disc accounts. Luckily, my wife called Netflix customer service to register our discontent and was informed that setting up separate 3-disc accounts would actually be cheaper by $2 per month. In every other case, the per-unit pricing goes up (or at least stays even) when splitting an account into two equivalent accounts (i.e., the 4-disc plan is cheaper than two 2-disc plans), so I don't know what kind of crazy strategy resulted in a higher rate for the 6-disc plan.

The only similar pricing that I've encountered is for toilet paper...in most cases, it was cheaper to buy 3 of the 4-packs than a single big 12-pack, but I've been buying the Costco mega-paks (24 rolls) for so long now that I don't know if that is still the case.

Anyway, I guess this is mostly an interesting (to me anyway) finance anecdote with a few suggestions that I'll be remembering for the future: Don't make assumptions about volume pricing and look for ways to be creative when saving money.

UPDATE 6/30/08:

Dear Matthew,

You spoke, and we listened. We are keeping Profiles. Thank you for all the calls and emails telling us how important Profiles are. We are sorry for any inconvenience we may have caused. We hope the next time you hear from us we will delight, and not disappoint, you.
-Your friends at Netflix

Wow, a company that listens to its customers. Of course, we'll continue with the plan to separate our accounts for the reasons mentioned above.