Dear Lovefilm, thanks for taking the time to compose such a thorough response explaining what you are doing with your customer proposition.
Unfortunately, you haven't addressed the core of my question which was to do with the commercial background to your customer experience design. My point is, the way you've approached this you are simply spreading ill will and damaging what is really quite a nice brand.
Lovefilm was built on a great service experience that trumped the video rental store by not relying on trickery, customer inertia and subterfuge to generate revenue.
Not only was Lovefilm a fairer and more transparent offer (and therefore more likely to engage the customer in the longer term) but the range extended far beyond what Blockbuster could hope to stock. You guys were basically, a 5-star service with a market-leading customer proposition.
So why make a mess of your online offer?
You need to stop explaining how content owners set pricing and new releases cost more and mensch up a bit and design an offer that shields the customer from the greed and foul-play of Big Copyright. The video-on-demand offer needs to give the same ubiquitous access to content the Disk-to-home service does and needs to avoid becoming a 'two tier' experience.
- Lose the multiple price points. The more price points you have the more you feel desperate like a cheap hotel that charges for wi-fi
- Offer Lovefilm at a single price-point: say £10.75/month gets you unlimited streaming access to the entire film library
- Avoid using the word "package". Packages are all about making life easier and more profitable for distributors and not about getting the customer a better experience. Lovefilm shouldn't be like one of those satellite television brands that forces people to buy 300 channels they don't want just so they can see the football
- Lovefilm could be a quality proposition that has "members" and membership gets you into the club (and what a club, where else can I get Russ Meyer, Godard and Die Hard 4 delivered to my door at a moment's notice?)
If you absolutely can't monetise without premiumising new releases, then distribute them through a completely different channel ("Amazon Hot Stuff" or something) so it doesn't dilute the Lovefilm proposition.
From a brand-building point of view, I really hope your research shows that for film-lovers, media quality and the range of the library trump newness in the long run. The movie industry just doesn't release enough good blockbusters to sustain a genuinely high-quality "all new, all of the time" proposition and after all, your logo says it all: "Love Film".
Thanks for your support and please do keep up this fantastic service.