Yesterday Neflix (NFLX) announced its plan to raise the subscription fee of the Internet-plus-DVDs-in-the-mail plan from $10 to $16 a month. The obvious question is “why”, but the better question is if this is a good idea on Netflix’s part.
Being the avid follower of Netflix, I felt I should share my 2 cents:
For the longest time now, I have been pleading my case for Netflix to beef up their online streaming library. As it is now, it… well… sucks. While the company was making decent strides, the recent removal of 200 films due to a contract issue with Sony Pictures only makes matters worse, yet the stock price just continues to soar higher.
Forget that subscribers are on a 3 week delay to get new releases. That was at least manageable. Right now, subscribers will be lucky to have any top notch new releases find their way into the online library.
Who knows… after 3 years of astronomical growth, who are we say Netflix does not know what they are doing? Maybe this will free up the capital needed to create partnerships with studios and/or add hot titles to its streaming library.
Even if they lose a couple subscribers, the increase in price builds in a cushion to take that hit.
At nearly $300 now, you have to believe the company had to shake things up to continue its stride for growth, and this just may be what they need to finally get over that streaming hump.
If the last 3 years have taught me anything, it is to trust Netflix.
Read more on the Netflix price increase.