NetFlix likely to lose DVD Revenue
Yesterday NetFlix Inc. (NASDAQ:NFLX) annoyed the majority of its customers with the new pricing plan that goes into effect on Sept 1st. The company won't lose many customers, but the vast majority may only pony up for the $7.99 unlimited streaming and bag any DVD options.
WallStNation.com Sponsors - Become one Today
(TheStockMasters.com | Frank Lara Jr) Redbox's Coinstar (NASDAQ:CSTR) is a great solution for the few DVDs Americans actually watch every month. Its cheap, easy, and yes you do have to get in your car but its a great alternative. I would much rather pay $1 for each DVD than add another $9.99 each month to my bills. It doesn't sound like much, but these days, everything adds up, and I'm not willing to add a recurring expense.
There's no way NetFlix consumers are giving up streaming video on their iPhone, iTouch, XBOX 360, PS3, or Android. But the company will give up some revenue as a result of the new pricing plan -- good thing they are planning on international expansion to make up the difference.
SO LONG $9.99
It really was too good to be true, but its how and why NetFlix (NFLX) shares increased over 1,200% since the recession. Currently, Netflix offers a streaming-only plan for $7.99 per month which is not going to change. Users who want to receive a single DVD at a time as well as have unlimited streaming pay $9.99 per month, and users who want to receive two DVDs at a time pay $13.99 per month.