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Jeffries isn't thrilled with Netflix's (NFLX +2.9%) price hike, which was received well by the...

Jeffries isn't thrilled with Netflix's (NFLX +2.9%) price hike, which was received well by the Street. With prices rising 60% for many customers, Jeffries believes churn could grow, damaging Netflix's subscriber growth and valuation. But Jeffries does see Netflix's average revenue per user increasing to as much as $14 from the current $11.80.
Comments (9)
  • SlingWing9
    , contributor
    Comments (486) | Send Message
     
    I'm a Netflix subscriber. I kept streaming and dropped DVD service. My subscription rate went down. I'll get the latest and greatest DVDs from Redbox which will still be less than their new subscription rate that includes DVDs. I suspect there will be a sizeable percentage of subscribers that go this route. Ultimately, their annual revenues probably won't change much, just churning as Jeffries said.
    13 Jul 2011, 08:53 AM Reply Like
  • Haotian
    , contributor
    Comments (132) | Send Message
     
    Sure but this churn shouldn't be seen as solely negative. Netflix gets to not only lower costs but also get a nice environmentally-friendly boost from the decreased DVD-subscriptions. It's surely a win.
    13 Jul 2011, 08:57 AM Reply Like
  • HiSpeed
    , contributor
    Comments (1107) | Send Message
     
    Since Netflix NEVER has any of the popular new releases available on instant viewing, I'm using their price increase as an excuse to downgrade my plan (no instant viewing).

     

    So not only will Netflix be getting LESS revenue from me, anything I would have watched over the internet will now need to be mailed to me as a DVD, costing Netflix the extra expense of postage!
    13 Jul 2011, 08:57 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3337) | Send Message
     
    Same here, HiSpeed. Plus I never liked the quality of the instant viewing, especially the sound. I'm saving money sticking with just the dvd's.
    13 Jul 2011, 09:10 AM Reply Like
  • Duude
    , contributor
    Comments (3376) | Send Message
     
    This price increase might only get people off the fence about whether to downgrade their service. I don't see how this will be of benefit to Netflix unless the hybrid user is more expensive to service.
    13 Jul 2011, 09:26 AM Reply Like
  • ToddT
    , contributor
    Comments (9) | Send Message
     
    I, too, am a subscriber who will be using this price increase to downgrade my plan. To increase my bill by 60% in this economy, what are they thinking?
    13 Jul 2011, 11:28 AM Reply Like
  • tiger8896
    , contributor
    Comments (622) | Send Message
     
    One thing Netflix doesn't have to be concerned with is competition in the DVD mail delivery business. Blockbuster is still around but they want $16.99 for an unlimited 2 disk sub. So Netflix will be 5 bucks cheaper than Blockbuster for 2 DVDs, is the cost of entry so high that another deliver by mail option can't emerge to challenge Netflix, seems Walmart with all their stores and warehoused could challenge them.
    13 Jul 2011, 02:39 PM Reply Like
  • biobat
    , contributor
    Comments (3223) | Send Message
     
    Yes, but Blockbusters service also includes video games and you can exchange in store.
    13 Jul 2011, 08:50 PM Reply Like
  • jazzmanstore
    , contributor
    Comment (1) | Send Message
     
    came you xplane to why nflx keeps going up even after they raised their price from $8 to $16 nothing stops nflx.
    14 Jul 2011, 10:40 AM Reply Like
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