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Productivity, streaming video

Up for Discussion: The Netflix Pricing Changes

By July 27, 2011 5 Comments

Netflix caused quite a stir when it announced some major pricing changes. Instead of getting DVDs and video streaming for as low as $10/month, Netflix has separated its plans into DVD only ($7.99/month) and unlimited streaming (also $7.99/month).  Starting September 1, you will have to pay $15.98/month for both services.

Why the price hikes?

This article from the Associated Press gives keen insight to the recent price increases.  To summarize, Netflix is trying to push subscribers away from DVDs-by-mail and encourage them to use the streaming-only service.

Why do they want this?

  • Sending DVDs by mail is more expensive than streaming video to subscribers.
  • Netflix wants to raise revenue for its streaming services (so it can provide a larger variety of premium content to subscribers)
  • It’s all in the name. “Netflix” may have started as DVDs by mail, but its very name indicates the DVD service won’t be around forever.  Netflix sees streaming video as the future (and present) for consumers.  The price hike is just a little nudge to push us in the right direction.

Will these price changes have a negative effect?

Only time will tell, but if my interviews with the Nexxtep team are any indicator, Netflix has nothing to worry about.  I asked a few folks which streaming services they used, if any.  For those that use Netflix, I asked if they were upset by the price increases for DVDs by mail.

Ann Stalvey, Systems Engineer.  I use Netflix DVDs by mail and streaming and love it!  I order everything from movies for my son to workout videos.  I still plan on using both services when the price increases.  It’s worth it to me.

Gil Morris, Systems Engineer. I use Netflix with Apple TV—it’s the best looking interface I’ve ever seen and I would highly recommend it.  I only use streaming services, so the price increase won’t affect me.

Leigh Futch, Director of Web Marketing Services. I use Blockbuster Total Access.  I also watch Hulu and visit Network websites (e.g. ABC and Bravo) to watch TV shows on my computer.

Stuart Avera, Vice President. I use Netflix and HuluPlus.  I use an Xbox, Roku and the apps built into my Samsung TV to watch streaming video.  I also use an Apple TV, but only to view pictures and videos from my iPhone and iPad. Roku is by far the best interface for Netflix and Hulu streaming. I have no issues with the pricing changes as I only stream anyway.  I don’t even own a DVD player anymore.

Richard Baker, Account Manager. I use Netflix (streaming only) with a Roku.  The price changes won't affect me either.

What about you?

Do you use a DVDs by mail or video streaming service?  If so, which one(s)?  If you use Netflix, are you upset by the recent price changes?  I'd love to hear your feedback in the comments.

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