If you're a Netflix subscriber, you've no doubt head about the pricing changes taking effect on September 1. DVD and streaming services will now be separated, and consumers will be paying at least 30% more to keep the same service. Personally, since I don't have many movies in my Instant queue, I will be churning through those in the next month and discontinuing streaming starting in September. This will actually reduce my monthly cost. But back to the company. The main issue for Netflix is not how current subscribers will react to the price increases, it's how non-subscribers react. Already we see that subscribers in the most recent month are down. Hulu Plus is a more than viable alternative for TV shows. While Netflix remains the king for recently released movies (who has premium cable anymore?) it is taking body shots from all sides and the initial results from its price increase are not positive. It appears that demand for Netflix's services was more elastic than they thought (as opposed to the New York Times, who is seeing enormous growth and revenue from its subscriptions). Time will tell, and a price reduction will be a serious admission of market research failure, but could be a necessity. Bold Prediction: On September 1, 2012, Netflix will be cheaper than on September 1, 2011.
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