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New Netflix Pricing Strategy

Posted on the 15 July 2011 by Jesusmsanchezl @JesusmSanchezl

Netflix LogoA few days ago, Netflix released a new pricing strategy on their products which not only affects their customers but their DVD rental scheme as well. Clearly it is a move that focuses on the future: Customer engagement in content streaming.

Initially, there was a unique plan that included streaming and DVD rentals. The customers were able to select that plan just for $7.99 and if they wanted to rent DVDs at same time, just for $2 more they could do so. But now the strategy includes 2 new plans: A streaming plan for $7.99 and a DVD plan for another $7.99. As you can see, this represents 60% increase for the DVD rentals and clearly not an option for those who wanted to do it. This following image explains what I said before (Troll face apply to this case):

Netflix Pricing Startegy
I completely agree that streaming is the present and future. Nevertheless, in the case of Netflix some movies were not available for streaming, so the backup option of  the $2 DVD offered was not a bad idea at all. Some customers that were using the DVD option are complaining a lot about this move. And they are right. I would suggest using the streaming option only when Netflix's library becomes bigger than the DVD one.

In conclusion, this is a direct hit to the physical formats and a move to the future. Netflix is not only focusing on the business itself but also on the current trends and future customers.


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