Netflix Raising Prices Up To 60%

[L.J.]

Since I am a Amazon Prime Member, I get their streaming services as a add on. Since it has no app for the PS3, and I do not like watching movies on a computer, Amazon streaming services is too inconvenient. Even with the Amazon app on Playon, it does not look very good on a larger screen. Besides, they have pretty much the same offerings as Netflix.

Personally I don't know what all of the hubbub is about. It is just a six dollar jump in prices per month, and these increased prices will give netflix the capital to acquire the rights to more movies. Everyone should have known the prices would not stagnate at $8.00 forever, a price hike was bound to happen. Nobody on this website should be a bit surprised, Wooch has done an excellent job at keeping us abreast on Netflix's activity. His analysis has proven spot on, and I thank him for his participation on this website.

Is it possible for PS3 to get an Amazon app eventually?

[GMichael]

Is it possible for PS3 to get an Amazon app eventually?

Dude? Is that really you?

[L.J.]

Dude? Is that really you?

Sup GM, Wooch? How's parenthood treatin ya?

[Sir Terrence the Terrible]

Is it possible for PS3 to get an Amazon app eventually?

They could add the app, but I think Netflix has nailed an exclusive that may prevent this.

[Woochifer]

1. My Costs: Yeah, I'm right back where I started by unbundling from a streaming service I NEVER used. I guess I'm not alone.

But, a lot of people did get hooked on the streaming service. It was a bargain, and as it turns out, one that was unsustainable.

2. Netflix totally underestimated the negative response to this hike.

I think Netflix got caught up in the tech press hype. Techies usually focus squarely on the streaming service when discussing Netflix. In their warped view, optical discs have been extinct since the 80s.

The reality is that 80% of Netflix subscribers use the DVD-by-mail service. This means that 80% of Netflix subscribers will have to either pay more, or scale down their service. Netflix is protecting that 20% streaming-only group from price hikes, when in actuality, it's the streaming content costs that have actually increased.

3. People will vote with their feet and wallets quite quickly on this as there ARE other alternatives out there.

Amazon already has a less expensive streaming option available. But, they haven't done much promotion because it's nowhere near as refined or convenient as Netflix. Rumor is that they are readying a revamped interface and big marketing push towards the end of the year. I think that is what Netflix is scared of, and why they chose to keep the streaming prices the same and shift the costs over to the DVD-by-mail customers.

4. I've no axe to grind with Netflix on this one, costs have gone up or are going to and to cull out the most expesive service and ask people to pay for it makes perfect sense.

I'm not even sure people know about all the behind the scenes stuff with Netflix's content costs. I suspect that they are separating the streaming subscribers from the DVD-by-mail customers to try and limit their content rights fee increases. If they lower their subscriber counts, then they can negotiate the next round of content deals with the studios using that lower number rather than paying for rights on the millions of Netflix customers that don't use the streaming service at all.

It might even be a response to the current fee standoff they have with Starz/Liberty Media, which has forced the removal of all Sony Pictures titles from Netflix's streaming site. Starz/Liberty Media provides the streaming rights to Sony Pictures' library at a cost of less than $30 million/year. However, that deal also has a cap of 20 million subscribers. Once Netflix went over that limit, the contract was no longer valid, so they pulled the Sony Pictures titles offline. Their deal was already set to expire in October, but this accelerated the timetable.

Maybe after the dust settles, Netflix's streaming subscriber count will go back under 20 million, and the Sony titles will reappear.

5. Unlike the cable companies, at least they offered us a choice. I personally can't wait till FIOS hits my neck of the woods so I can tell Time Warner Cable to kiss my bulbous, Black ass.

Better hope that melanin-rich arse doesn't freeze easily this winter! Unless the Albany area is already served by FiOS, it won't be coming to a living room near you. Verizon stopped their national fiber expansion last year, in order to focus their efforts on closing the coverage gaps within markets that they already serve.

[Woochifer]

Since I am a Amazon Prime Member, I get their streaming services as a add on. Since it has no app for the PS3, and I do not like watching movies on a computer, Amazon streaming services is too inconvenient. Even with the Amazon app on Playon, it does not look very good on a larger screen. Besides, they have pretty much the same offerings as Netflix.

From what I've seen, Amazon's streaming library is a far cry from what Netflix has available. But, they also sell and rent movies, which makes their service potentially more expansive than Netflix.

The issue with Amazon is that the user interface sucks, and the Amazon Prime plan is a bit convoluted in that its primary function is unlimited shipping on Amazon retail purchases. Amazon is supposedly prepping a new interface and big marketing push for the end of the year. I think that's when we'll really see how much of a threat Amazon poses towards Netflix.

Personally I don't know what all of the hubbub is about. It is just a six dollar jump in prices per month, and these increased prices will give netflix the capital to acquire the rights to more movies. Everyone should have known the prices would not stagnate at $8.00 forever, a price hike was bound to happen. Nobody on this website should be a bit surprised, Wooch has done an excellent job at keeping us abreast on Netflix's activity. His analysis has proven spot on, and I thank him for his participation on this website.

It might only be $6, but that also works out to 60%. In absolute terms, $6/month is not much, but in relative terms, a 60% price hike on something you're already getting is a big psychological hurdle. My wife is already saying that she wants to cancel Netflix on principle alone, and I don't think she's the only subscriber saying this.

And Netflix's demographic includes a lot of people who otherwise don't want to pay anything for media content. I think that's why Netflix is holding the $8/month streaming-only plan intact. They're gambling that those subscribers that have the $10/month combo streaming/DVD-by-mail plan are less price sensitive than the streaming-only subscribers.

Netflix's position was untenable because they're trying to shorten the window before movies start appearing on their streaming site, and they're moving into original programming. Both of those initiatives cost a lot of money, and for now, they've chosen not to pass them onto the streaming subscribers.

In much the same way that Apple uses iTunes as a breakeven loss leader to promote hardware sales, I can see Netflix and Amazon trying to push for market share by subsidizing their streaming services. Netflix is in the most precarious position because their cash reserves are nowhere near what Amazon, Google, Microsoft, and Apple have at their disposal.

But, Netflix has a growing platform and moving into original programming might be a very smart move, because it insulates them from the exponential content fee hikes, and potentially gives them a revenue stream of their own as they syndicate those programs to other channels and release them in other formats (including ironically DVD/Blu-ray). With a hit series like The Sopranos, I think HBO made most of their money back with just the US syndication deal with A&E, and then you count the overseas broadcast rights, DVD sales. And that's before including the millions of HBO subscribers that kept HBO because of programs like The Sopranos.

If anything, Netflix is following HBO's trajectory. And that's why I thought that the future of streaming might be a balkanized landscape where Amazon has exclusive streaming access to certain studios' titles, while Netflix might have others. Much the same way that HBO, Showtime, and Starz each produce their own original programs and have exclusivity over different studios' movies.

[Woochifer]

Sup GM, Wooch? How's parenthood treatin ya?

My daughter just turned 4! Other than feeling old, parenthood's been quite good.

Good to see you back on the site, hope all's well in mo-town!

[Sir Terrence the Terrible]

If anything, Netflix is following HBO's trajectory. And that's why I thought that the future of streaming might be a balkanized landscape where Amazon has exclusive streaming access to certain studios' titles, while Netflix might have others. Much the same way that HBO, Showtime, and Starz each produce their own original programs and have exclusivity over different studios' movies.

A balkanized landscape is just what the studio's want. That way no one entity has the power to play hardball come negotiation time. What they have essentially done is weaken all the players hands except their own.

[BallinWithNash]

Since I am a Amazon Prime Member, I get their streaming services as a add on. Since it has no app for the PS3, and I do not like watching movies on a computer, Amazon streaming services is too inconvenient. Even with the Amazon app on Playon, it does not look very good on a larger screen. Besides, they have pretty much the same offerings as Netflix.

Roku box for the win!!!

[Sir Terrence the Terrible]

Roku box for the win!!!

Since Amazon brings nothing new to the table, it is not worth adding to an already complex HT system.

[BallinWithNash]

its one HDMI cable and plugging it in ... it has wireless capabilities

[mlsstl]

I've had a Roku for almost 2 years. Pretty neat little device. The first one I got went bad, but they replaced it under warranty and have been plugging along since.

I haven't made up my mind about the Netflix price hike - 60% is extremely annoying just on principle. However, much of their catalog isn't yet available on streaming. There is the option for limiting DVDs to 2 a month. Combining that with streaming would only be a $3 buck a month increase.

Right now I'm just waiting to see if Netflix does anything in response to the overwhelming negative customer reaction.

[Worf101]

Better hope that melanin-rich arse doesn't freeze easily this winter! Unless the Albany area is already served by FiOS, it won't be coming to a living room near you. Verizon stopped their national fiber expansion last year, in order to focus their efforts on closing the coverage gaps within markets that they already serve.

Ding Ding Ding!!!! They just started signin folks up in Smallbany, BUT, Smallbany ain't Troy, there's about 12 minutes./15 miles difference. I don't know if that means I'm in or out.

Worf

[Woochifer]

Ding Ding Ding!!!! They just started signin folks up in Smallbany, BUT, Smallbany ain't Troy, there's about 12 minutes./15 miles difference. I don't know if that means I'm in or out.

Worf

You got a far better chance than I do, since FiOS is already at least in your area code. Verizon has indicated that they will expand, but only in regions where they already provide service.

In Cali, Verizon brought FiOS to the areas around LA where they long served as the local "baby bell" and they've expanded the service in a patchwork pattern. They're still filling in the gaps, and at the rate they're going, it will take years, if not decades, before the entire LA area is covered.

But, in the Bay Area where I live, FiOS has no presence, and it's areas like mine that Verizon has said will not get FiOS service.

[Mash]

I believe NETFLIX pushed their agressive bottom-end prices until Blockbuster, for example, went bye-bye. Blockbuster tried to respond but simply was not nimble enough to adapt. Now NETFLIX has enough commercial presence that building the capability to receive NETFLIX along with wifi into Blu-Ray and DVD players is a selling point for electronics manufacturers.

There are many examples of disruptive innovation:

The mini-mills did not originally challenge J&L, US Steel, and the other large integrateds by producing finished rolled steel, but rather by competing in steel rebar, which was unimportant to the large integrateds. After the mini-mills drove the large integrateds out of rebar, they moved up to simple shapes, and so on upward, until eventually the minimills moved into finished rolled steel.

Toyota and Honda followed the same strategy by entering the econo-bottom of the US auto market, in which GM, Ford, and Chrysler were not really interested. The GM execs "knew" that everyone wanted to drive a Cadillac, so they viewed all their other models as mere stepping stones for the American auto buyer to reach the Caddy and therefor were not really worth "defending". Eventially Toyota moved all the way upmarket and introduced their Lexus line, and the rest is bailout history.

[pixelthis]

I believe NETFLIX pushed their agressive bottom-end prices until Blockbuster, for example, went bye-bye. Blockbuster tried to respond but simply was not nimble enough to adapt. Now NETFLIX has enough commercial presence that building the capability to receive NETFLIX along with wifi into Blu-Ray and DVD players is a selling point for electronics manufacturers.

There are many examples of disruptive innovation:

The mini-mills did not originally challenge J&L, US Steel, and the other large integrateds by producing finished rolled steel, but rather by competing in steel rebar, which was unimportant to the large integrateds. After the mini-mills drove the large integrateds out of rebar, they moved up to simple shapes, and so on upward, until eventually the minimills moved into finished rolled steel.

Toyota and Honda followed the same strategy by entering the econo-bottom of the US auto market, in which GM, Ford, and Chrysler were not really interested. The GM execs "knew" that everyone wanted to drive a Cadillac, so they viewed all their other models as mere stepping stones for the American auto buyer to reach the Caddy and therefor were not really worth "defending". Eventially Toyota moved all the way upmarket and introduced their Lexus line, and the rest is bailout history.

Your view of what happened to BLOCKBUSTER is a bit simplistic.
BLOCK did not fail through any fault of their own, they failed
because their business model was obsolete. every
video store in my town except the one that does tanning beds and porn is gone. You stream a video and you don't have to take it back, pay late fees, etc. AND WHILE it has its limits, redbox replaces an entire store of employees quite nicely.
TALK ABOUT a tempest in a teapot. THE CHEAPSKATES
will gripe and pay and the more reasonable will just pay.
THEY KNOW its a bargain. Meanwhile the video store has
passed into tech history, along with record stores, eight track,
laser, etc.