Five years ago I ended my Netflix (NFLX) subscription. I have never regretted it.

At the time, I paid around $20 a month to have three DVDs in rotation at any given time. After a few months of watching the signature red envelopes collect dust, which caused me endless guilt, I understood something about myself: I don't watch nearly as many movies as I thought I did. I canceled my subscription. When the service moved to offer a less expensive streaming online-only option, I tried again. And once again, I still didn't watch more movies. For me, paying for Netflix was paying for the option to watch movies, not the movies themselves.

Netflix's Tuesday announcement over changes in its pricing scheme - now $16 for streaming and mail-order, and $8 for streaming-only - incited mass consumer fury. While there were wrinkles in Netflix's execution of its new deal, the customer freak out underscored how tethered we have become to subscription services. The reaction has been akin to a landlord suddenly jacking up rents, and we, as the renters, feel utterly powerless. Except that we do have power, and we don't need movies in the same way we need shelter. That perception of powerlessness is entirely in our hands as consumers to act upon.

Sarah Mees, a Netflix subscriber in Portland, Ore., describes her personal debate over the new price tag, effective September 1:

"I could drop down to steaming-only or one disc only for $8/month, but I love the convenience of having both options. But, then again, if I cancel Netflix all together, what are my other options? It's a goofy little money perception thing that will ultimately force my decision. Eight dollars a month out of my account is nothing, $10 (my current price for streaming and one disc) also goes unnoticed from my account. However, that extra $6 (I know, a whole $6?!? haha!) makes it feel like an actual monthly bill, and therefore, a burden."

The price hike makes the previously invisible spend now feel like a burden. As it should. The jump for the whole-hog Netflix plan represents a 60% increase for some of its customers -- a giant step up by any standard. And the unspoken cost is, of course, the price of broadband Internet service customers also pay, likely on top of a cable bill, cellphone bill and other media subscriptions. In the end, how much media - and how many subscriptions - do we really need? Even as the offerings around us increase, there are still only 24 hours in a day.

The move into a subscription-based consumer economy has been dramatic over the last 10 years. Recurring monthly bills, once limited to utilities and rent, are now part of every aspect of consumer life. Digital books, apps, magazines, movies, games, news, cars, furniture - whatever, you name it - can all be secured for a monthly fee. But the accumulation of these fees, which all seem very reasonable when presented alone on a virtual cake stand, quickly add up into the hundreds, if not thousands, of dollars. Add to that cost, the time spent managing accounts and chasing down billing mistakes, the guilt of paying for unused goods and services, and the effort of retrieving forgotten passwords.

The trend toward subscriptions is not going away anytime soon, and growth of the tablet industry will only add more pressure. One industry analyst predicts that 40% of all businesses selling media and digital products will rely on subscription management partly or entirely as a business model by 2015. This represents a slippery slope for all consumers: The option and availability of services and media galore is tempting, but getting roped into long-term spending relationships with multiple media outlets can represent a money pit, particularly for the services underwritten with credit cards.

J.D. Roth, founder of the personal finance blog Get Rich Slowly, told DailyFinance his preferred money-saving technique to eliminate all subscriptions. I don't disagree. It is liberating to read a monthly statement that is devoid of membership and subscription fees. Today, I still consume plenty of movies and other digital media, whether going to the movie theater or paying for on-demand, which can cost me up to $13 a movie. (Hulu (GE) and Apple iTunes (AAPL) are my preferred online sources.) My per-movie individual cost over the year may tally up to slightly more than a monthly unlimited plan, which is now almost $200, but in the end I am happily off the subscription merry-go-round.

Catherine New is a staff writer with DailyFinance.com. You can reach her here.









Increase your money and finance knowledge from home

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Add a Comment

*0 / 3000 Character Maximum

19 Comments

Filter by:
Linda

They only way to beat the price change is to not pay this price until they bring the price back down. Stop watching completely, then they will have to bring it back down. If everyone did this they wouln't have a choice.

July 14 2011 at 9:50 AM Report abuse rate up rate down Reply
Ann

My On-Demand movies are not $13. They are $5.99-$6.99. The ones that are $13 don't require a "wardrobe department". :-)

July 14 2011 at 8:26 AM Report abuse rate up rate down Reply
tiredoffreeloaders

Well I just dropped netflix. I refuse to pay double wht did before for less service then when i started. There throttling bad on turn round time lately. so given price hike i will go back to downloding torrents.

July 14 2011 at 7:26 AM Report abuse rate up rate down Reply
melogee

pardon my spelling - don't want to seem as dumb as the people who are over-reacting about netflix:)

July 14 2011 at 6:49 AM Report abuse rate up rate down Reply
melogee

I like Netflix, just casue the author was not inclined to watch to pix, does not devalue you the service for people like myself who manage to catch up on all the oscure foreign fillm )(and classics) I would never have a change to see, and stupid ones that i would never go out of my way to see. The mob mentality here seems unreasonable at this point, and streaming is great -- My ownly issue is that they might lose the criterian collection to cater to the dummies out there:)) Joke, kind of:)

July 14 2011 at 6:48 AM Report abuse rate up rate down Reply
1 reply to melogee's comment
Ann

Why the name calling because someone has a different opinion? ("don't want to seem as dumb"), among others. Seems you do (sound dumb.)

July 14 2011 at 8:30 AM Report abuse rate up rate down Reply
occhurchpastor

I agree, when I purchased my new lap top I received a free 30 days of netflix and it was terrible. I turned it off within two weeks. Now all we get is netflix popups it is so irritating.

July 14 2011 at 6:25 AM Report abuse rate up rate down Reply
Carl Ray

Well said! And I agree. STILL the best deal around. I said good-bye to cable a while ago and I have no plans to go back. But don't get cocky Netflix. We do have limits. Stay UNlike cable and we'll keep on loving you. http://bit.ly/pnc4yq

July 14 2011 at 6:01 AM Report abuse rate up rate down Reply
dvdfrnzwbr

Blame Obama.

July 14 2011 at 1:38 AM Report abuse rate up rate down Reply
fgoldsm170

Well done Seashorev!!!!!

July 13 2011 at 11:49 PM Report abuse rate up rate down Reply
fgoldsm170

Dear Sarah Mees,
When was the last time you ever visited your local library???

July 13 2011 at 11:48 PM Report abuse rate up rate down Reply