Sunday, July 17, 2011

Netflix justifies its price hike



Netflix abruptly jacked up its price for that deal by 60 percent. Now, if you want to check out one DVD-by-mail at a time, and enjoy unlimited streaming of Netflix’s 20,000 TV shows and (mostly older) movies to your computer, phone or Blu-ray player, you have to pay $16 a month instead of $10. (The price hike hits new customers immediately, and existing customers on Sept. 1.


“Why the changes? Last November, when we launched our $7.99 unlimited streaming plan, DVDs by mail was treated as a $2 add on to our unlimited streaming plan. At the time, we didn’t anticipate offering DVD only plans. Since then we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering.”










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