There's simply no other choice when it comes to quality content that's conveniently streamed. Netflix is banking on the quality of their service to win back customers after its recent price hikes.
Why Netflix had to raise prices.
- $1 million paid for each new "Mad Men" episode.
- New licensing deals with Miramax, Revolution Studios, Viacom and NBC Universal. This continues to be where the majority of new costs come from.
In reality, the previous $7.99 deal for streaming was probably priced too low. Most consumers don't want to hear that and want to feel rightfully enraged, but the truth is that these contracts are a huge cost for Netflix.
Why consumers will come back to Neflix.
The exodus of Netflix subscribers was overstated by the media, but it is still a sizeable chunk of people. Netflix is estimated to be losing roughly 15% of its customer base (about 2.5 million people). Netflix has plans for winning some of these people back, and many will simply come back for one simple reason: Netflix has the most content and plays on the most devices. Since Netflix is a well entrenched and recognized brand, they will also have no problem garnering new subscribers to their service.