How to play Netfix's price hike
Coinstar stands to benefit as Netflix raises subscription rates, an analyst says.
By Jeanine Poggi, TheStreet
On Tuesday, Netflix announced that it is separating its DVD and streaming subscriptions, charging $16 per month for access to both forms of content. This is a 60% increase from the prior rate of $9.99 per month. Users can gain access to each individual subscription for $7.99 per month.
While Wall Street has been praising the move from Netflix, customers are enraged, with many claiming they will cancel their memberships completely as a result.
This could benefit Coinstar, which has been trying to ramp up its offerings to better compete with Netflix.
"For those consumers that request only a limited number of DVDs per month from Netflix, but still see value in accessing streaming content, one option would be to downgrade to Netflix's $7.99 per month streaming-only plan and then rent individual DVDs from Redbox kiosks at $1 per night," Merriman Capital analyst Eric Wold wrote in a note.
Netflix, it seems, is purposely forcing users to move away from DVDs and to streaming content, leaving its share of DVD rentals up for grabs.
Another potential tailwind for Coinstar is the possibility of NCR (NCR) exiting its Blockbuster Express DVD kiosks. According to PiperJaffray analyst Michael Olson, NCR recently indicated that it is exploring strategic alternatives for its entertainment business, which could mean the sale of the kiosks.
"After a year of delayed studio deals, aggressive management guidance and inconsistent earnings results, we now believe positive momentum is finally back on Coinstar's side and Coinstar's shares are poised to continue their recent move higher," Wold wrote. "We believe Coinstar's valuation multiple will expand further with additional positive earnings surprises in the coming quarters, further DVD market share gains, the long-awaited digital strategy announcement and confirmation of accelerated kiosk concept rollouts in 2012."
It's called bait and switch. I am cancelling my membership. I can get the same with various other providers. Screw u NETFLIXSour Grapes, huh. I only use stream, so I pay 7.99 month. I consider that CHEAP. i don't have time for gripes I'm a working man so chill and take a
Having the streaming only plan would not be so bad if ALL the movies were available but they are not! So your forced to get the DVD...This was my only luxuary I COULD afford being on unemployment...no cable, just reg TV and wireless where Icould find it. So I would watch movies at McDonalds or something or at the library. I cant afford $16 a month not on unemployment...Thank YOu netflix for taking the one little piece of entertainment I had!
I got this statement from Science and Technology section of MSNBC from a person who instead of finding a JOB wants to stay up in McDonalds to watch Netflix.
I would make my statements on Newsvine but Newsvine is political biased. Newsvine is the worst discussion blog modernators I've even encountered. If your opinions are not Progressive Democrat Leftist, you will be kicked out without a e-mail explaning why but referer you to the Code of Conduct eventhough Progessive Democrats made far more offensive statements without punishment.
Also I have noticed in the last 3 months that Amazon and Hulu content loads much faster and and at a better quality to Netflix's ....methinks they are cheaping out on the CDN side.
1. Amazon is not impressive
2. Hulu offers NOTHING but old foreign movies(excluding Japanese) and re-runs
3. You have a S-L-O-W connection.
I have 12.0 mbps and it's fast. Plus it depends what kind of internet box you have?
I have a ROKU XDS, top of the line and it works flawless. i hook my ethernet and watch netflix and youtube and other channels, even RT. I do not watch television, I have no cable nor satellite, because TV is bad for you, especially mainstream news Media.
Also, you guys are cheap. When Blockbuster and Movie Gallery was around you were paying out of the gadzoo. With netflix you only pay 7.99 month, it's not like you are paying for a cell phone bill which will cost you 100.00 a month. I understand you can't get ALL the movies streamed, but heh it's better than renting movies in the past with scratches and damages. Look how much it's costing Netflix to keep it going compared to your whinning and complaining you need to find a job first then worry about netflix like the one I mentioned in the above statement.
I netflix, eventhough i don't use it much, I it. If you are complaning, then you need a JOB. If you have a JOB and still complaining, maybe you need to work harder and earn more money, that always stops complaints.
Really enjoyed Netflix at the reasonable price for streaming and 1 DVD - but the greedy 60% increase Nexflix is going to charge is not in my budget and I'll be cancelling my membership. Hello Hulu for streaming and a DVD from Redbox will now be my "new Netflix".
This decision will have no effect on me. I will continue to use the netflix streaming service and not rent DVDs.
I like netflix and their streaming options. 90% of my video watching time is through netflix. renting DVD's is not worth my time and effort. I stay away from any services like cable TV or hulu where I have to watch commercials. I hate commercials!
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The solid report comes a month after the retailer closed all of its Canadian operations.
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