A price increase is always a bad thing for consumers especially when it is going up 60% for some Netflix users. I’m paying more and don’t like it but haven’t forgot paying $20/mo for the same service years ago and this was the mail order only. No streaming back then.
So why is Netflix doing this anyway? I’ve seen polls as high as 50% of current Netflix users are threating to disconnect. The first reason why Netflix is raising rates is because of the cost of content. According to Merriman Holdings research, Netflix paid 600 millions dollars for content last year and the cost is rising. So to some extent, Netflix is getting much of blame for content owners raising their rates on Netflix. A second reason Netflix is increasing rates is due to its streaming only push. Let’s not forget that the streaming only plan will still remain at $8/mo. But 90% of Netflix subscribers use the streaming plus 1 or 2 DVDs out at a time. Netflix wants more on the streaming only and less on the streaming plus DVD mailers making their company much more profitable. Like it is doing globally. I speculate that this free up in expense will be reinvested in content effectively allowing Netflix to enhance their streaming content which is good for end users like you and me. (long term)
I believe this price increase will do short term harm to Netflix but have long term gain for the company. This will make Netflix an even more viable online service for the long haul. While I don’t like paying more starting this September, I’m glad to do so as the service is still a bargain. Right now, I look forward to seeing Netflix enhance their streaming library.
Prediction: Once the media hysteria calms down, Netflix will make a come back.
I would be all for streaming only if Netflix would OFFER MORE movies to stream. Perhaps they will?
ReplyDeleteAs we the users demand more streaming content, the content holders will eventually listen and switch their business model from DVD/Bluray to Streaming. Netflix will certainly deliver it as such as it costs them less to stream than the handling/postage associated with the mailer.
ReplyDeleteAs per your endorsement, I bought a Roku player! Thanks, I love it. I was concerned about Netfilx raising prices, but I only use streaming, so I will not be affected. Now, if only RTC would cooperate and offer fiber optics in my area, I would be a happy camper and get rid of Comcast altogether.
ReplyDeleteThat is great Davis! I just noticed that Fox News streams live TV from 9AM - 3PM every weekday on the Roku Fox channel. I anticipate more live TV on all the boxes in the near future. The roku is the perfect platform for live streaming.
ReplyDeleteRegarding fiber optics, if you haven't already, go to http://www.rtctel.com/ and enter your address into the fiber checker. We take consumer inquires for fiber very seriously as part of our build out plans! Thanks for following the blog.
Plenty of news networks through Newscaster Channel. Personally, I prefer the Al Jazeera channel for a fresher approach to national and international news. And the numerous NPR programs that can also be found on the same channel.
ReplyDeleteAnd I have encouraged my neighbors to inquire about the fiber optics. I do so every once in a while. Thanks.