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Netflix: Pricing Decision 2011

by David Robinson, Max Oltersdorf


Beginning in 2007, Netflix began offering existing mail rental subscribers the opportunity to view a limited number of movies through internet streaming and no additional fee. This 'free streaming' continued until mid-2011 when Netflix announced a split to their business with separate monthly fees (and separate websites and names) for streaming and mail disk subscriptions. The resulting customer backlash and threatened defections caused the company's stock price to drop 60 percent. As movie studios (the owners of the content) saw sales of DVDs drop, they began to sharply raise their prices for online content. Moreover, Netflix which had been dominant in the mail disk rental model began to face substantial competition from other streaming video providers. The case study provides students with an opportunity learn about pricing and to develop a pricing strategy for Netflix.


Details

Pub Date: Jan 19, 2013

Revision Date: Jan 20, 2013

Discipline: Marketing

Subjects: Crisis management, Public relations, Marketing, Consumer behavior, Pricing, Pricing strategy, Business models, Corporate strategy

Product #: B5766-PDF-ENG

Industry: Film

Geography: United States, California

Length: 13 page(s)


Berkeley Haas Case Series
Berkeley Haas Case Series The Berkeley Haas Case Series is a collection of business case studies written by faculty members at the Haas School of Business. Cases are conceived, developed, written, and published throughout the year, on subjects ranging from entrepreneurship and strategy to finance and marketing. Each case includes a teaching note for use in the classroom.

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Berkeley Haas Case Series

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