It certainly has domestically. And you can't blame Netflix for this. It's merely a function of the subscription model. As Greenberg points out, that presents quite a conundrum for a growth company.
He doesn't mention the one thing Netflix is banking on to drive subscriber growth -- international. I don't blame him. It's just not going to happen in any part of the world at the level Netflix needs.
So, what's the solution? In theory, it's simple:
Netflix Should Raise Prices Again
In practice, that's not as easy as it sounds given the way Reed Hastings (mis)handled last year's increase. That's one of the reasons why I argue that
Netflix Needs a Celebrity Spokesperson
. Somebody to massage the public into going along quietly with a significant price hike.
As I explain in the above-linked articles, there's no reason, other than blowback from last year's controversy, why Netflix should not be able to raise prices. It offers a service that is worth way more than $8 a month. Cable, satellite,
(SIRI - Get Report)
-- they all do it.
Some pull the move off without a hitch (SIRI), while others (cable, satellite) get away with price hikes at the same time as customers spew vitriol their way.
I can't see a way forward for Netflix other than a price hike, hopping into the crowded advertising space (they would blow it) or opening its platform up in two ways -- increasing content delivery methods and working in relevant e-commerce components.
In the past, I recommended the company get into the adult streaming market by taking out privately-held
, but that's not happening.
So then, Netflix needs a cash cow. DVD once served that purpose, but Hastings blew the business up. He also says he will not offer on-demand, al a carte options because that's never been what Netflix is about. I assume he's against advertising and e-commerce for similar reasons.
Hastings has a model in his head -- Netflix Streaming at $8 a month across the globe -- and he's stubbornly sticking to it. Not a good idea.