MIchael Andrew (07.16.11, 10:55 PM): Thanks for the article- I believe I hit a number of points dead on, however, I do not agree with what Netflix is saying about contract costs not affecting this decision. When your contracts cost 11 times more (thats just for the Starrz stuff, ie 32 Million vs 350 Million) it absolutely will have a negative result on "profitability" which is what this rep is claiming to be the "real" issue. (Btw....any idea how much money Netflix made last year? Any idea how much this new contract bites into it? Yes, the contracts are absolutely a factor whether they want to admit it or not).
This is the problem I have with Netflix, even in the article, they are trying to spin a price increase as a good thing. Their customers are smarter than they are giving them credit- Netflix should just admit "Our costs are going up", instead of clinging to "its still a great deal."
Jason (07.16.11, 7:55 PM): Here is an article explaining the reason for the price hike. And according to Netflix spokesman Steve Swasey it has nothing to do with contracts! Here is the article. http://finance.yahoo.com/news/Why-Netflix-Raised-Its-nytimes-3842223211.html?x=0
Shaun (07.15.11, 11:43 AM): I chose to go with Blockbuster at first and I really enjoyed it. In my opinion the option to turn in your video in store and exchange it for one there was the best thing they could have done. It allowed for both the "i'm ok waiting" and the "i wanna see this movie now" within the same plan. But they couldn't keep the prices cheap enough to compete and went out of business, and now Netflix raises prices. Almost seems "robber baron" -esque.
Adam (07.14.11, 9:49 PM): Great writeup michael! Totally agree!! I've been trying to explain the same thing to everyone on Netflix's facebook page.
Natalie (07.14.11, 8:46 PM): Great food for thought. Just what I needed to read. From a business owner point of view (movie biff also) makes sense. Thanks!