Friday, July 15, 2011

the Netflix price-hike

It's a no-brainer for me. We sometimes keep our one-DVD-at-a-time for weeks before watching it, and I have found MANY gems (umm, and a few duds) streaming on-line. We will be cancelling the DVD service.

But, I don't get it, from Netflix's perspective. By maintaining both distribution methods, they are not saving money. The cost of supporting the aquisition, storage, and distribution of physical media is not going to be reduced - as long as they still have customers paying for that service, they need to maintain the entire infrastructure.

A few months ago, KPOJ was playing frequent (!) commercials inviting entrepeneurs to get in on the DVD-rental-kiosk franchise business and I scoffed, thinking that that was already a business that had peaked. Now I'm not so sure.

Do they really think that most subscribers will elect the hybrid option, in THIS economy? I have to believe that most will choose one method or the other, reducing Netflix's monthly take by $2 per subscriber. Great business plan. What am I missing, business school graduates?

3 comments:

Joe Litton said...

We've not used NetFlix in at least 8 years, maybe more. I was considering trying them again -- maybe even getting one of the devices to use for streaming / downloading. Not now.

Barry in Portland said...

I connect my laptop to our TV via HDMI, and, over home (DSL) WiFi (transmitter 30 feet and one floor away), stream movies from Netflix without any audio or video issues.

For us cave-dwellers without cable, it's pretty cool.

Dame Edith Divine said...

I think it likely costs them more than $2 per person to maintain their shipping business.