It looks like Netflix could seeking to increase its streaming customer base (and lead over competitors) by offering one-time discounts to subscribers who use the company’s streaming service. The Motley Fool has run an interesting piece reporting that mere days after the author received his disc enabling the use of Netflix streaming on his Nintendo Wii, Netflix sent an email with a one-time 10% discount.
While 10% off of one month of Netflix’s pricing plans (the most popular of which cost less than $20 per month) may not be a large discount, the Fool conjectures that it’s all about encouraging subscribers to stream films rather than receive discs. By cutting out the costs associated with by-mail DVD service such as postage, inventory, handling, etc., Netflix can earn higher margins from subscribers, the Fool postulates.
Furthermore, with the unlimited streaming playing field mostly to itself, Netflix could be attempting to build an insurmountable lead over potential competitors such as Redbox, Amazon, Apple, etc.
Recent trends in Netflix’s advertising and website layout would seem to support the Fool‘s theory. The streaming option is now promoted as the primary method of delivery, with the by-mail service being positioned as a bonus for subscribers.
Netflixing Insiders, do you find yourself streaming more than getting discs by mail, despite the smaller selection? Will this strategy pay off for Netflix? Tell us what you think in the comments.
(via The Motley Fool)