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View Full Version : An Analysis Of Why Netflix Changed Their Prices

Richard Chao
07-16-2011, 08:12 AM
<div class='os_post_top_link'><a href='http://pogue.blogs.nytimes.com/2011/07/14/why-netflix-raised-its-prices/' target='_blank'>http://pogue.blogs.nytimes.com/2011...sed-its-prices/</a><br /><br /></div><p><em>"Sad, sad, sad. The world's best deal in TV and movies has just gone away. I refer, of course, to Netflix's $10-a-month deal: unlimited DVDs by mail and unlimited streaming TV shows and movies."</em></p><p><img height="300" src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/wpt/auto/1310799567.usr117680.jpg" style="border: 1px solid #d2d2bb;" width="250" /></p><p>Ever since Netflix announced they were going to increase subscription rates, many different people have proposed their thoughts about the reasons behind this increase. &nbsp;The following article is David Pogue's thoughts on why Netflix increased subscription rates and debunks a few others'&nbsp;explanations. &nbsp;&nbsp;</p>
Sven Johannsen
07-18-2011, 03:05 PM
I think the paragraph towards the end says a lot
Want to know the worst part? He’s right. PCWorld.com has a nice summary (http://www.pcworld.com/article/235629/netflix_alternatives_other_places_you_can_get_streaming_media_dvd_rentals.html) of Netflix alternatives. There’s Amazon Prime (no DVDs by mail, small streaming selection). Blockbuster by Mail (pricier mailed DVDs, no free streaming at all). Hulu Plus (no DVDs at all). Redbox (no streaming, pay by the day). In other words, even at $16, Netflix still gives you more than anyone else.
So, why? Because they can. If their intent is to kill the 'DVD by mail' side of the business, just make everything available via streaming. I dumped the DVD part a while back, but am periodically irked by titles that are available DVD only. Wasn't irked enough to pay $2 more per month, certainly not enough to pay $8 more per month.
I expect with all the streaming entertainment evolving these days, it is just about time for ISPs to invoke and enforce data caps, and establish tiered pricing. That is so well received in the phone space.