Netflix and NBC Universal have renewed and expanded their live video streaming deal, bringing more content to Netflix. The agreement comes as customer anger mounts over a major price increase for Netflix DVD and streaming services.
The renewed deal not only assures that content from shows such as Saturday Night Live and The Office will remain on Netflix, but it also expands the deal to include shows such as Leave it to Beaver, Psych and Law and Order: SVU. The deal also covers a selection of NBC Universal’s film library.
One major change to the deal: Saturday Night Live will no longer be on Netflix the day after it airs. Instead, the entire season will be available after it ends. Hulu, which is partially owned by NBC Universal, will still have episodes of SNL the day after each episode airs.
Terms of the NBC-Netflix deal were not disclosed. However, The Hollywood Reporter reports the deal could be worth as much as $300 million per year, up from just $25 million.
With the price of content skyrocketing for the DVD rental and video streaming service, it’s no wonder why the company is jacking up its prices. Netflix has split up its video streaming and DVD plans, making each worth $7.99. To have access to both plans, users will have to pay $15.98 per month, a 60% rate hike over the previous $9.99 combined plan.
The result has been a revolt by its customers. The announcement of the new plan generated more than 45,000 mostly negative comments on the Netflix Facebook Page. The company’s blog has received thousands of negative comments. And in our non-scientific poll of Netflix customers, more than 37% of respondents claimed they will be cancelling Netflix altogether. We’ve seen other polls with similar results.
Will 37% of Netflix customers actually cancel their subscriptions? We doubt it, but it definitely has caused a backlash from its usually loyal customers. At the same time, Netflix’s costs are rising and it needs to make its streaming operation profitable. Some even suspect that Netflix is trying to kill the DVD with the new pricing plans.
Before the price hike, Netflix was doing well. Its earnings rose by 88% in the last year, and its stock price has risen from less than $50 to nearly $300.
What do you think of Netflix’s NBC deal and its new price plan? Is it justified given its increasing costs, or did Netflix go too far? Let us know in the comments.
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