Monday, July 18, 2011

Price Hike by Netflix a Smart Move?

Cnet's Greg Sandoval with Eric Garland, CEO of Big Champagne, a firm that analyzes media consumption and consumer net activity, who sees the recent price hike by Netflix CEO Reed Hastings as a savvy move designed to get the jump on the competition as we move away from DVDs as a primary way to watch movies at home.

Here's a couple clips:

...he's convinced that Hastings designed the price hike to rouse the studios and his audience out of their complacency regarding the DVD. Garland says the format was already dying but the price increase is meant to perform a mercy killing on the highest order; so consumers can begin to acquire movies in the more efficient way that benefits them--and Netflix--the most.

"Jobs knew exactly what he was doing when he introduced a new computer for the home that did not have a floppy drive. That disappointed virtually everyone in the market. What it forced us all to do was to reconsider the format. That is exactly what Netflix is trying to do."

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