Yesterday, Netflix’s stock fell $7.24, which amounts to nearly 3 percent, closing Tuesday at $239.04. The shares have continually dropped by 18 percent since the company announced its first rate increase on July 12. Now, the streaming movie giant is at it again, and people are no happier about it than they were last time. In fact, many people may be even more ambivalent in the face of new pricing announcements.
Netflix last month decided to unbundle its unlimited video streaming option from plans with disc rentals. This is part of their strategy to cut down on shipping costs by trying to get as many people as possible on their streaming services instead of ordering discs through the mail. Starting on Sept. 1, these new changes go into effect, and users who want both streaming plans and the ability to rent DVDs will have to purchase two plans instead of one combined.
The nice thing about the new Netflix is that titles availble on DVD only will no longer show up when customers are browsing their apps.
Netflix is rumored to be working on developing a change that would do away with household sharing of video streaming and would instead require each individual user to pay a separate monthly fee. This is not expected to go over very well with customers, either.
In our opinion, Netflix is making itself less and less attractive and setting itself up for a fall. Competitors that didn’t exist four or five years ago are gearing up for battle against the streaming video giant, and several look to have promising chances. Amazon, Hulu, Vudu, and others could seriously give Netflix a run for its money as users defect en masse in protest to the company’s sudden and radical restructuring of pricing and features.
