Competitors move in after Netflix price hike
Netflix, the popular DVD-by-mail and online video company, recently announced $6 a month subscription hike, catching many of its 23 million subscribers off-guard.
"Early Show" co-anchor Chris Wragge reported the DVD and streaming video giant is at the center of a customer complaint firestorm. Two weeks ago Netflix announced it was separating its DVD and streaming video subscriptions, resulting in a whopping 60 percent price hike starting in September for existing customers.
There were over 80,000 comments on Facebook alone, including this message from an angry follower: "Netflix stock down today...laugh out loud...poetic justice for a greedy company that turned its back on a loyal customer base."
After Netflix announced depressed third quarter projected earnings on Tuesday, Wal-Mart struck back.
To get a bigger share of the market, Wal-Mart announced it's offering many movies the same day they come out on DVD. Wal-Mart already offers 20,000 streaming movies through Vudu.com, which can be viewed on over 300 Internet-connected devices.
On "The Early Show," Jason Cochran, contributing editor for DealNews.com, said Netflix has ripped a page from the airline playbook.
"(They've) unbundled their services," he said. "It used to be you pay you pay $10, have streaming movies unlimited and also be sent DVDs. Now if you want them you have to pay for them separately. If you want to keep the old services you had, pay $16 a month, rather than $10, does not make people happy."
He added, "We're moving toward streaming movies in general. It costs a lot of money to send things out, the warehouse, pay for postage. And since we're moving toward streaming a lot of the companies need to have better libraries available. To do that, it takes money because you have to negotiate with the studios. Netflix is trying to position itself to where it is more of a streaming company in the future."
But if you're looking for other video options, Cochran discussed the following options:
Blockbuster Total Access
Subscriptions starting at $11.99 per month
Cochran said, "It costs more than Netflix, but you can get movies right away as soon as the DVDs are released. Netflix has a waiting period of almost a month."
Subscriptions starting at $9.95 per month
Cochran said, "It's essentially art house, classic movies. Because Netflix and Blockbuster tend to be a little more mainstream, a lot more Hollywood. So if you want something more obscure, you might look at GreenCine."
$1 per night
"Kiosks have downsides," Cochran said. "There's often a line, one person at a time can use them. It eliminates the ability to sit there and browse, which is one of the pleasures of a video store. (You see them) at drugstores and grocery stores."
iTunes & Apple TV
Best Buy's CinemaNow
$1.99 and up
$7.99 per month
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