A lot of people are dropping their cable plans to sign up for Netflix – and unfortunately the television networks and movie production studios are using that shift as an excuse to increase their licensing rates. In turn, this has forced Netflix to raise the price of their various services.
Just yesterday, Netflix announced that they would be splitting the downloaded, web tv part of their business from the DVD rentals. Instead of one account providing both services, users will now have to choose between one or the other or pay the $8 monthly fee for each.
Plenty of people online are angry at Netflix about the rate hike, but the fact of the matter is that Netflix doesn’t have a whole lot of choice in this situation. Since a lot of their contracts were written before they got so popular, they were able to lock in really low prices for many of our favorite shows and movies. Now that more people are signing up and demanding even more content, the cost of acquiring the in-demand shows is up.
Netflix is helping to convince customers to drop cable, but there are other segments of the media business that aren’t doing so well either. Consumers aren’t rushing out to buy expensive new Blu Ray players, DVD prices have dropped significantly, and television advertising is having a hard time. For the most part, the problem in the media industry is that the big companies are set on a TV and disk-based distribution system, but the internet has drastically revolutionized the options available to consumers.
So what do you say? Will you be canceling your Netflix subscription? Downgrading to a streaming-only or DVD-only plan? Sucking it up and paying out the entire price increase? I haven’t personally decided which route to take, but I know for sure that I won’t give up my streaming Netflix service… I might be spoiled, because I refuse to go back to old-fashioned TV now that I’ve experienced entire series on-demand and without commercial interruption!
Posted on July 15, 2011 by admin
0