I think there are �convenience oriented� customers (those who enjoy not driving to BBI), there are �movie addicts� (those who see lots of all kinds of movies), there are people that only want to see new releases, etc.
But there�s a very important group of customers out there, the VALUE customer, that will evaluate NFLX on a cost-per-movie basis vs BBI. Is NFLX in a position to retain those customers?? Let�s find out.
Based on a post made by luckyinvestrgrrl (Msg # 765), �If you're watching more than 5 movies each month, you'll come out ahead $$-wise if you use NFLX instead of BB.� So 5 movies is the break even point for the Value customer, if he/she has a $20 NFLX subscription. She also said �I'm still averaging 12+ movies/month ($1.66/movie).� You�re really lucky, luckyinvestrgrrl!!!
I invite all of you to post your average movies per month ratio, together with the kind of NFLX subscription you have, and then the average cost per movie you�re getting. There�s a link where you can see your rental history at Netflix: go to Your Account, then Your Rental History at the bottom of the page.
So let�s start with me:
- Average movies per month: 7 :( - NFLX rental program (after tax): $26.57 - Average cost per movie: 3.8 $/movie
After a few days, I�ll post a summary with the results. There could be some learning after this exercise.
Renting 5 movies / month Paying $21.60 / month Average Cost Per Movie = $4.33
Interestingly enough, until I did this calculation, I thought I was paying more than I would at video stores because I have the tendency for keeping some movies for weeks on end. I guess not. It's better value than I expected I was getting.
My first movies were shipped June 17. I have watched nine movies.
A little over $2 a movie at my basic membership. I guarantee you that my chronic late return habit placed my average movie price much higher when I rented at the stores.
I had told myself that, if an impulse buy is necessary, I will pick one up at the grocery store on occasion. So far, that hasn't happened. Besides, when you live out in the boonies, there are few impulsive shopping trips. You tend to plan your errands so as not to waste time and gas.
I am watching more movies lately but that's because I quit cable tv for the summer (a little test of my t.v. addiction).
I have the basic membership and I am surprised at the number of people who have opted to a higher rate here. I didn't think it would be that common.
I have eleven movies in my queue and all are available now except for one obscure italian zombie movie that, I think, is the oldest film on the list. Go figure.
Given the market, I cannot say what the stock price is going to be. If it drops to the twelves, and I have any capital, I might jump in there, or lower, or higher.
The point is, if I buy, I am not buying the stock, I am buying the business. I'll buy because I believe in the model and the company's future. Of course, I also have to have some money. Like a lot of others in the market, I'm a little short at the moment. :^)
Netflix shows the last three months of history so I used that. 43 movies in 3 months on the 19.95 plus tax plan. Worked out to $1.49 a movie.
I was really surprised that it was that many movies - but we pretty much always do three a week so 3 a week for thirteen weeks is 39 - add in a couple quick turnarounds and I guess we are doing better than three a week by a bit.
Movies are a mix of new and old - maybe 35% new/65% old