New Zip membership plans/pricing (continued from t297)

[hudson3709]

It will be interesting if we see a large roll of advertising by VHQ right now. They must be licking there lips. What happens now if VHQ holds steady with there prices and Zip has to back track. I am not sure how much research Zip did before doing this. But it feels like they jumped pretty quick at the price increase after floating the baloon for a very short term.

If on the other hand VHQ raises prices to match, then I feel that we are in for a TV like price increase every 6 months.

[donoterase]

So, when will this take effect.
Will there be a date announced.
I might be leaving zip, I dont know yet

[theScud]

The cynic might see the delayed start of the ZipRewards program as deliberate. Zip is expecting that they will lose some customers as a result of the pricing change. The members that leave will likely have more than the average number of points accumulated. Could this be a cost-saving measure?

[YKdvd]

It will be interesting if we see a large roll of advertising by VHQ right now. They must be licking there lips. What happens now if VHQ holds steady with there prices and Zip has to back track. I am not sure how much research Zip did before doing this. But it feels like they jumped pretty quick at the price increase after floating the baloon for a very short term.

If on the other hand VHQ raises prices to match, then I feel that we are in for a TV like price increase every 6 months.

VHQ (and DVDhype, and M4M in Ont/Que) used to be 3/$25 when I started back in Jan 2004 - 4/$25 was DVDflix's claim to fame. ZIP started 3/$25 as well, and I remember being (pleasantly) surprised when they went to 4/$25. When they did, VHQ only did 3/$25 at first as a "summer sizzler" promotion (presumably hoping ZIP would back down or not drain their customers), and only went to permanent 4/$25 in the fall - probably to the dismay of their accounting department!

I suppose you might consider ZIP's caps to be crying uncle, but as a medium+ user I like to think of it as tightening up their bell curve (admitedly at the expense and indignation of those a couple of standard deviations off to the right). VHQ may be able to make something out of the "unlimited" thing, but I have a certain admiration for ZIP in grasping the nettle on this. Of course, it isn't my ox being gored

[YKdvd]

More importantly, I bet netflix could judge the introduction of downgraded memberships right at the beginning of a hot summer a careless move. As a matter of fact, let me make this official: I for one, welcome our new netflix overlords! Paging netflix, forget about this "ahhh, not sure, market seem covered, maybe next year" BS, this is your cue

I'd guess NetFlix has their own home market problems these days, and in any case coming to Canada isn't something they could just turn the heat up on and speed up. Also they have their own way of dealing with high-volume folks:

In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service. As a result, those subscribers who receive the most movies may experience next-day shipping and receive movies lower in their queue more often than our other subscribers.

And worse if you believe some of the urban rumours I've seen Also, a lot of their success must come from those 30 warehouses getting speedy deliveries to most of America - it would be interesting to see what strategy they might try to start in Canada.

[Bafflegab]

Honestly, I don't understand all the carping about these new rates. As long as Zip keeps the price at about $2 per rental I find their service to be a good bargain. And where else are you going to go for Zip's great selection? I think we've just gotten spoiled with just how much Zip has improved in the last year or so, what with shipping times decreasing, customer service increasing, and the upgrade to four DVDs out at a time with the 'standard' plan instead of three.

I'm only disappointed that Zip hasn't added a billing option that some of us have occasionally expressed a wish for, namely that we have an option for a flat rental rate per DVD shipped, ie. for a flat rate of $2 per rental, if you rent 5 DVDs you pay $10; if you rent 50 you pay $100, etc. None of this 'plan' nonsense and no surprise charges either, just a nice flat-rate charge per DVD rented.

[~~Darlyn~~]

Honestly, I don't understand all the carping about these new rates. As long as Zip keeps the price at about $2 per rental I find their service to be a good bargain.

It's not the $2 per rental I'm "carping" about. It's the fact that we got hit with multiple changes and a 55% increase to boot. When they did the initial poll we were lead to believe they would make a change. Well, they made numerous ones.

We thought perhaps a shipping surcharge over the cap limits - yes, they did that.

We thought perhaps a slight increase across the board to membership plans - yes, they did that but only if you are in the 6 disc plan.

The sneakest part is if you want to maintain your "unlimited" feature, please pay 55% more. This is great for Zip, they can still advertise as having an "unlimited" DVD service although I think that may be a half truth. Give me a break, why not just say we offer an unlimited service but we don't really want you to use it. If you do, sorry we can't allow you to unless you're willing to pay 55% more.

Bottom line, the people that actually used the service the way it was advertised and intended to be used are penalized for doing just that. How convenient, to lure all these members in with great pricing, terrific service, etc. etc. Then once you have the people, up the prices, cap the rentals. Now that they're in, they may not want to leave but guaranteed, if Zip's site had these packages on it initally, I doubt they'd have the membership numbers they've got right now.

[~~Darlyn~~]

Just curious if the question in the intial poll was about the extra shipping costs why a $2.19 per rental hike? Postage is $1.00 and I doubt that buying all those envelopes in bulk ends up costing $1.19 for 2 envelopes with each shipment.

Manpower is the same. The shipper still works a 40 hr workweek (avg) whether he sends me 14 discs or 24 discs.

[warpdrive]

New poster here.

Have to express my disappointment. The caps are absurdly low. I would have thought that 16-18 discs for 4 disc membership would have been reasonable. In our household, my wife and I have vastly different tastes. So we do about 4 discs per week (2 for each of us).

Well, if Netflix is going to even offer 1 disc more per month, I'm jumping ship.

Also, zip better have a nice way to manage the quantities of discs on the web site....because I'm a fixed cost type of guy. I hate surprise surcharges.

[YKdvd]

I'm only disappointed that Zip hasn't added a billing option that some of us have occasionally expressed a wish for, namely that we have an option for a flat rental rate per DVD shipped, ie. for a flat rate of $2 per rental, if you rent 5 DVDs you pay $10; if you rent 50 you pay $100, etc. None of this 'plan' nonsense and no surprise charges either, just a nice flat-rate charge per DVD rented.

The monthly revenue stream is probably necessary for these companies. The only place that offered a "pay-as-you-go" option that I know of was the late unlamented Hollyweb. Theirs were $5 each (they were a 3/$25 company in Edmonton that died in 2004). If ZIP wanted to do it there would probably be two things affecting the pricing. They would have to make it high enough to fairly cover the rental's share of the various overheads (profit, salaries, operating expenses, etc), not just the shipping cost. FWIW Rick has posted here that they figure that around $2.50. I suspect that to make it worthwhile for them you'd be looking at something like $3. But the other factor that they would probably consider is not cannibalizing too many existing users who might instead join one of the monthly plans, even if it is more than they might ideally desire. Those people are the ones bringing the averages down and balance out the higher volume renters (not just the biggies, but the 8-14 crowd) - if too many of them drop out to individual rentals, the average on the remainder would go up, stressing their margins again. Or at least that's how it would appear to me.

Given that individual rentals would require a separate set of marketing explanations and extra computer systems design, it probably just isn't a big enough market to be worthwhile - one group of people would want low prices on this, and a good chunk of the rest probably don't mind a few buck a month for one of the lower end rental plans even if they don't use the full capacity.

There might be a market for people who just want to occasionally take advantage of ZIP's big selection (perhaps doing most of their renting locally), but irregularly enough that they don't want the monthly charge. But I'd still guess it would only happen with premium pricing ($3-5). I suspect there is a useful market of small town film buffs and whatnot for something like this, assuming ZIP can't lure them into a monthly option.

BTW, Cinemail has a "Casual Viewer" option of 2/$16 with a cap of 4/month. But unlike ZIP's current capped 2/plan, any unused rentals carry over.