With more than 23 million customers, Netflix (NASDAQ:NFLX) apparently isn't too concerned about losing some of them. The company decided Tuesday to bump its price for a combined streaming and DVD-by-mail service by nearly 60 percent to $15.98.
It also began offering a streaming-only plan or DVD-by-mail only plan for $7.99, in line with its streaming only offering in Canada, which is the same price as Hulu charges for its Hulu Plus premium service.
The move immediately drew howls of protest from a number of customers and raised concern among pundits who questioned the move and predicted subscriber erosion.
Wall Street, however, apparently liked the move, rewarding Netflix with its second consecutive day trading above $300 per share. The stock closed, however, at $291.27.
The move was nonetheless somewhat expected, with CEO Reed Hastings in the past saying that Netflix was far more interested in streaming content to consumers than in sending it through the mail, a delivery method that, because of postage cost increases and the expense of maintaining staffed mail drops centers, has become more expensive.
A Netflix spokesman said the company expects to lose some subscribers because of the price increase but the company still believes the combined offering, at $15.98, was "a terrific value."
Janney Capital Markets analyst Tony Wible said some 80 percent of Netflix customers currently use a combination plan and will be affected by the price change.
For more:
- see this Wall Street Journal article
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