Netflix is obviously finding their success in the law of supply and demand. Two weeks ago, on July 12th Netflix announced plans to raise prices this September by changing the packages offered in a subscription.
Customers will no longer be able to rent or stream unlimited DVD’s from Netflix for the low price of $10 a month. Instead Netflix will capitalize by separating DVD mail rentals from online streaming, requiring consumers to pay either $7.99 for one or $15.98 for both.
Did Netflix know what they were doing when they came out with the decision to raise their monthly subscription fees? Absolutely! When Sony’s Playstation Network went down, users threatened to trade in their PS3 consoles for Xbox systems claiming they were extremely upset and unhappy. Increasing trade-ins opened the door to Sony’s PSN competition, unfortunately for Netflix consumers red means stop. Redbox does not even hold a match up to the Netflix flame, limiting customers to rental choices based on location.
When Netflix first emerged on the scene people said it was the end of Blockbuster and video rental stores throughout the country. Truth be told, Netflix has been enjoying the top spot for some time since, but now others are emerging onto the scene with online video streaming. With Apple taking huge strides with its iPad device, iTunes may soon be the choice of Mac enthusiasts as it also offers online video streaming. Walmart is powering through the declining DVD sales, announcing VUDU, its new fully integrated digital video streaming source. Other competitors include the online gaming network worlds of Xbox, PS3 and Wii to name a few. For now according to BeSpokeInvest.com Netflix has been able to build the stamina to stay on a steady climb upwards.
Chief Executive of Netflix Reed Hastings seems confident that the company will see an increase in profits in the upcoming quarters as there are no comparable services out there for customers, forcing them to stick around.
CNet reported that Hastings message was “a disaster,” according to Howard Belk, co-CEO and chief creative officer at Siegel + Gale. Belk would know as he is in charge of the company who advises other companies on their brand strategies and customer experience. “The tone was wrong, the quantity of information was too little, and it came out of left field. The message didn’t reflect any value to their customer base.”
Netflix still has one of the better deals out there and if you’re like me and want to watch older movies, less popular titles and not fill up your hard drive in the process. Although Netflix may not have the competition, consumers are unhappy with their message, the delivery and the 60% increase coming in September.