Netflix Pricing Analysis

Nicholas Kissick

Professor Liu

BADM 326

16 October 2018

Netflix Pricing Analysis

        Netflix’s pricing strategy is a very skeptical move by the firm. It’s no surprise that the firm needs to raise prices to cover the rising costs that streaming requires. Its changing price structure between a variable costing means to one that is more of a fixed expense requires that Netflix change its strategy; however, I feel that the strategy they went with was a poor decision. The biggest problem lies with the subscribers value of the program. Online subscriptions, by the time the price switch was made, made up a massive majority of the revenue brought in. The new pricing strategy seemed to exploit those uses rather than give value to them. People who use the online subscription would have no use for the mail rental system, yet they are forced to buy both systems. On the other hand, those who just use the mail system only have to pay for one. This incentives resistance to the technological change that Netflix was so keen on transitioning to as stated in the apology method. Additionally, the mail order system customers also suffer as they are being forced to switch to a new platform and a different brand