The news about Netflix increasing their base fee from $10 to $16 in hopes to steer users to online rentals doesn’t really matter to me except for the fact that another online business model is about to go through some seriously tough times.
Along with increasing prices they lost one of their largest content providers Starz which is expected to make a deal with Amazon.com in the next couple weeks.
Now this isn’t really all that shocking… there are always content provider problems for any delivery network. If fees aren’t going up on cable tv then dish subscribers are panicking because the super bowl is being held hostage as a bargaining tool. Glad I don’t watch football … they almost never screw with hockey games..
All of that aside Netflix is not only a big business … it is a business that hires hundreds and thousands of workers in their regional delivery warehouses. By shifting delivery from physical disks to online downloads it means those people will be without jobs. This may be the right direction for technology but you do need to keep things like that in the back of your mind.
Additionally there are still places in the USA where you can’t get quality broadband to your home at any price… You also cant get Cable TV.
So while you are contemplating your stupidity for purchasing NetFlix for $300 just a couple months ago and now it has lost a third of its value…
Maybe you should also think about why you think this company is worth that and how you expect them to deliver content online as well as other distribution networks.