Originally Posted by tjwal
With the switch to streaming they could reduce their per subscriber cost negating the impact of reduced per subscriber revenue.
Except that now the cost of the content is skyrocketing. They lucked out starting up their streaming business because they got the content dirt cheap but now that's ending so they're looking at price hikes AND less content - if anything I'd say their streaming business is even less sustainable than their DVD business. At least with the DVDs they had fixed costs and could get a decent customer base and make some money even if growth topped off. With streaming their expenses can keep going up and up so they either have to raise prices or not increase content as much as they'd like.
I don't know what their best strategy would be - maybe go on a spending spree and get a lot of decent content locked in for a long time even if it costs an arm and a leg and cuts into their profitability but lets them add more customers?
Originally Posted by Jsyedinak
I have always thought they they should have plans to allow the streaming of a certain # of the same movies in their DVD catalog per month. I would gladly pay about $15/month for this ability.
Their DVD library is entirely separate from streaming rights. To stream anything they have to negotiate a contract specifically for that, if they happen to offer it on DVD that's totally unrelated.
Originally Posted by regan
$8 a month for unlimited streaming? Thats insanely cheap.
Cheap, but a terrible selection. If you want to be able to watch all that missing content you have to spend more money and go elsewhere. I'd be fine paying quite a bit more if the selection was quite a bit better.
Originally Posted by solipsism
Wasn't it reported a year or two ago how much more profitable the streaming part of their business was compared to the storing, packaging, mailing, and replacing of physical discs?
True, but a year or two ago they had streaming content at ridiculously low prices because the format was so new and the studios practically gave it away. Now that those contracts (mostly 3 year ones, so they're expiring this year and next) are up, is it still
going to be more profitable to offer content as streaming? Some of the studios are asking for ten times what the fee was for the last contract.
DVDs are just bought so those prices are relatively fixed. With the content costs going way up and all the increased competition on the streaming side (helping the costs go up), maybe DVD won't look so bad to them.