2

Netflix doesn't want to send you DVDs

Red Netflix envelopes sit in a bin of mail at the U.S. Post Office.

To view this content, Javascript must be enabled and Adobe Flash Player must be installed.

Get Adobe Flash player

JEREMY HOBSON: Netflix is raising prices for its nearly 23 million subscribers. And the company is de-bundling its DVD-by-mail service from its streaming videos.

Marketplace's David Gura reports.


DAVID GURA: Netflix will charge up to sixty percent more for some of its subscription plans.

TONY WIBLE: I think it reeks a little bit of desperation.

Tony Wible is a media and entertainment analyst with Janney Montgomery Scott. He says the company's old pricing model was unsustainable, and it's been losing money. Netflix's most-popular plans bundle unlimited streaming with DVD rentals. The company will now split apart those two services, and if you order both, it'll cost more. Streaming saves the company money, on distribution and postage, but the catalog of movies Netflix offers online is much smaller. It hopes to change that.

WIBLE: They are trying to push more people to streaming, but they're also trying to make more money and make their business model ultimately work at the end of the day.

Against competition from Amazon, Apple, and Blockbuster.

I'm David Gura, for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
Brian Hobbs's picture
Brian Hobbs - Jul 13, 2011

Today there are only about 7 movies in the Netflix top 100 that you can watch through streaming. That's absurdly low if they plan to go to all streaming.

Andrea Cassidy's picture
Andrea Cassidy - Jul 13, 2011

Still cheaper than cable.