Netflix increases rates

Posted in Businesson Jul 12, 2011

Occasionally, I’ve subscribed to Netflix for a couple of months at a time.  I’ll subscribe, catch up on a number of movies and shows which I haven’t gotten around to watching yet, and then suspend my account.  One of the attractive things about Netflix is that streaming access was included, so I could watch a show online (through my Wii) while waiting for the next DVD to arrive in the mail.

Today, however, Netflix announced that they are no longer including streaming free with their DVDs-by-mail plans.  Instead, you can pay $8/month for streaming, with no discounts for subscribing to a DVD-by-mail plan.

This effectively separates Netflix into two operations: one for streaming movies, and another for DVD rentals.  By running two completely separate operations, Netflix now competes more directly with competitors in both operations.  Netflix streaming now competes with Hulu Plus, Amazon Instant Video, and others.  Netflix DVD rentals now compete with Video Rental Stores, Blockbuster By Mail, DVD renting Kiosks, and buying cheap DVDs at Walmart.

Perhaps Netflix’s “un-bundle” effort is driven by people who hate my telephone company, Qwest, who thinks that bundling is the best thing ever.

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