Netflix changed their price structure and most of the streaming contracts are expiring in next two year.
I really don’t care if they charge $15 or $10. It’s still cheap. They’re not going to lose 1/3 of their customers over this, so higher profits expected.
Eventually they have to charge high as the new contracts they will be getting at much higher price. I think Google and Amazon will make them lose a significant market share.
I don’t think the big issue is them raising their pricing initially, it’s that their costs for obtaining the movies to stream are going to go up exponentially. They were really the first mover into this area and got some great deals on the content. Now they have much more competition and are going to have to pay a lot more for new content than the did for their old content.
Also, their online content is increasing quite rapidly. To many customers (like me), $10 for the online-only subscription is equal or better value compared to $10 for online+mail two years ago. So, to some people, the value of the service has actually increased since they signed up, despite the higher subscription costs. As for competition from Google, Hulu, Amazon and friends… I don’t know - still undecided. I know that in the short to medium term, people like me are unlikely to change services, since Netflix has provided a pretty good experience. We’re also unlikely to sign up for a second, similar service. But then again, things change pretty quickly in this sort of industry, so maybe something else will happen. Edit: We should probably not underestimate the value of brand loyalty either. Brand loyalty is basically what prevents Google search users from using Bing, other than the f-ing stupid name.
I still have to think that eventually, all movies watched at home will be streamed. If streaming costs go up, they will go up for everyone. Netflix has the advantage of having a heck of a lot of subscribers automatically paying for services.
The price increase make sense to me. I think increasingly more people fall into the either a DVD watcher or Online watcher category. So not offering two services for the price of one is a good way to keep their costs down per customer even if they lose a few customers here and there due to the new prices. I think their biggest hurdle is staying competitive with the online content. There is simply too much alternatives out there (legit or pirated) for people to ignore a limited collection.
el duque Wrote: ------------------------------------------------------- > I agree that future competition in streaming content is going to be a major challenge for Netflix in the future. Right now, Netflix has an advantage because the universe of online content is much smaller than the universe of DVDs and BluRays; by offering both online and physical media, they offer great balance between convenience (online) and availability (DVD/BluRays that are not online through any service). Eventually, everything is going to be online, so this advantage will dissipate over time.
Until blu-ray level quality is available over the internet (or blu-rays get cheaper), companies like Netflix will be around. I could pay $20-30 for a blu-ray disc once a month or pay $20/month for unlimited blu-rays 3 at a time. There’s no comparison for people that are interested in having that 1080p 7.1 audio experience that just can’t be had via streaming. And the number of people going blu is only going to get bigger as players and TVs get cheaper. The HD streaming service from Netflix leaves a lot to be desired IMO. There is definitely a market for streaming because some people simply don’t care about quality. But there will always be a market for hard copies of movies. By the time the internet has enough bandwidth to play blu-ray quality movies, the next generation of HD will be here and the cycle will start over again. Many companies are already working on 1440p.
People who care about 1080p and 7.1 audio are a pretty small percentage of the population. It’s probably worth differentiating between people who want such premium quality (few people) and people who just want broad availability of content with reasonable quality (most people). In this sense, it is reasonable for Netflix to offer different tiers of service - for instance, streaming only, or streaming+Blu-Ray. I guess this is comparable to how car companies have luxury models and mass market models.
Yeah, most people can’t tell 720p from 1080p. I’d say Bluray’s uptake has been underwhelming at best.