This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Netflix Should Raise Prices Again

Stocks in this article: NFLX AMCX SIRI

Before it does anything, Netflix should sell its DVD unit prior to Hastings running it further into the ground.

Right now, DVD is a death trap, a suicide rap for Netflix. Hastings has to get out while he's young. Put it up for sale. Somebody will be more than willing to overpay for the business.

From there, raise prices. But do it the right way. Actually use some marketing and customer relations to pull the move off.

Observe how Sirius XM (SIRI) handled its price hike. Pretty much flawless execution by CEO Mel Karmazin. I'm not a fan of much of what they do over there. But, he deserves credit.

SiriusXM basically said to its customers, "Listen. You really love our service and, given the economics of our business, we have no choice but to raise prices now that we are able." It worked like a charm because, if you really like or find satellite radio useful, an extra buck or two a month most likely means nothing to you.

Of course, Hastings has a history to deal with.

I would be blunt. Make the value proposition. Stress that without DVD, Netflix becomes a different company. A pure play streamer. We have exciting plans both on the content and delivery fronts (maybe preview some of them) and, to ensure that they happen and we remain healthy, we're going to start charging you $9.99, $10.99, maybe even $11.99 a month. Cable keeps getting away with much worse; why should the public treat Netflix, the anti-cable, differently?

If I'm Hastings, I would cut deals with high-profile networks and celebrities to offer customized, ultra-premium programming for an additional a la carte fee. But, that's just a thinking-out-loud aside.

The price hike, this time around, if executed with even a hint of competence, will not hurt the business. In fact, it would likely raise revenue, raise Netflix's profile, allow it to secure much better programming (on that basis, I would consider $12.99 or $14.99 across the board or as a "premium subscription" price) and, as a result, help it return to subscriber growth.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs