Monday, July 25, 2011

Is Netflix ironically pressing cord cutting with a price increase?

Ouch: The Netflix Price Change Hangover | TechCrunch

Netflix is not sooooo cheap anymore. Do people now ask themselves, "What would I rather have: Cable and $20 extra bucks each month; or Netflix and $100 extra bucks each month?

Many might say, "Keep Netflix" Netflix is not a Giffen good, but the same sort of logic applies. Increase the price of the lower priced (also lower quality) product and people buy less of the higher priced (also higher quality) substitute.  If Netflix popularizes cord cutting more people will become educated regarding its advantages by visiting the homes of those with cut cords.

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