DEER ISLE, ME (TheStreet) - Netflix, the entertainment delivery king, announced a plan for customers to pay extra shillings for DVD's. Sixty-percent extra shillings, that is.
Nearly everyone braying on Twitter and Facebook hated the idea, though traders liked it. And who could blame either for their gut reaction?
But there is a huge risk inherent to the plan. Worse, too much of the media, which is supposed to reach beyond gut reaction to put issues in larger perspective, failed to touch upon it. Marketwatch, Motley Fool, and Reuters, for example, all failed. The specific risk involves the relative lack of new release availability on the streaming video side. Obviously, Netflix (NFLX) hatched the plan to cover increased costs and prod customers toward streaming.
But what happens if those streaming customers are disappointed by the comparative lack of new titles? That is the operative question.Thankfully, The Wall Street Journal (NWS), The New York Times (NYT) and The Associated Press ask it in varying ways. Remember: this is not only an issue of price and whether customers will, in a Twitter-led mob, bolt to the likes of Amazon (AMZN) or Apple (AAPL). The story of new movie releases and streaming has been messy. Witness the Sony (SNY) /Netflix contretemps. Will the entertainment delivery King's new plan for 60% more shillings work? It will hinge on the new release issue, something way too much of the media did not even deign to mention.
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