Netflix: From hero to goat?

Netflix’s recent (and surprising) round of price increases drove a lot of commentary at the RetailWire blog site. Here’s my opinion:

The biggest issue with the Netflix move is the lack of any offsetting strategy to improve its service levels as the company migrates from DVD rentals to live streaming.

As a longtime subscriber, I’ve noted two big problems: The delays in release dates compared to pay-per-view operators, and the amazingly thin selection of live-streaming movies. The price increase may beintended to turn the DVD rental business into a “cash cow” that can help solve the streaming-assortment issue, but Netflix also loses its competitive-pricing edge vs. Amazon, iTunes and local cable operators by jacking up its fees.

If Netflix isn’t careful, it can turn quickly from a well-respected e-commerce innovator into an online Blockbuster. Only “best in class” service is going to placate longtime subscribers.

 

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