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Netlix price change
1. Tatyana Belousov
Shaun Keenan
Sasha Safonova
what Sapan Shah
Netflix
should have done
when
changing its
prices
2. Business model & Shaun
past pricing
New pricing Sapan
Competitors Sasha
Our alternative Tatyana
3. Disadvantages of brick and
Netflix’s core advantages
mortar stores
World's leading internet
no late fees & a
subscription service for wide available
enjoying TV shows and movies selection
4. Focused on customer
experience to drive
additional growth:
More content
Word-of-mouth
marketing
5. Netflix’s revenue comes from
Customer retention is of price
It’s that high because
important, yetof service.rate is
– subscription its churn
not quality fees.
6%
6. Ways to subscribe
Streaming……or DVDs by mail…
both.
85%
of consumers paid for
only streaming or a 1-2
DVD plan in 2010
7. Old prices
$10.99 $7.99
unlimited streaming streaming
or DVDs
from $8.99
to $47.99
for others
8. New prices
$7.99
No Discount for
Streaming
havingNetflix
DVD by mail
Old both plans
:( 2 DVD: $11.99
3 DVD: $15.99
1 DVD: $7.99
4 DVD: $21.99
9. Why the split:
…and to a DVD rental
to remainshift focus to
license price
create more
division they can be
streaming without
aggressivecontent
proud of
sacrificing quality
10. Netflix lost one million
Huge investor more subscribers than
backlash they had originally
expected to
Reaction to Pricing
Change
Anger about dealing Stars would not
with 2 separate renew its contract
accounts with Netflix
11.
12.
13. Netflix messed up!
Underestimated emotions of
subscribers – unquantifiable!
