By
Rick Aristotle Munarriz
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July 16, 2011
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When bloggers spotted Netflix (Nasdaq: NFLX ) quietly offering a DVD-only plan for $7.99 a month, it was easy to speculate that Netflix was going retro. Instead of trying to get everybody to embrace its instant-streaming offering, the company was now appealing to technophobic couch potatoes.
What was going on became clear when Netflix announced that it was splitting its two plans. DVDs? Streams? Subscribers hooked on both will have to pay as much as 60% more, seemingly forcing members to choose one over the other.
The uproar was easy to predict. No one likes price increases. The real debate here is whether this was the right move. Splitting its user base in two will make it easier to justify either spending more on streaming-content rights or realizing that it can't neglect its regional distribution network that mails out optical discs.
The upside and downside have just expanded. Bulls? Bears? Pick your plan.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Clorox (NYSE: CLX ) is Carl Icahn's latest target, with the activist billionaire offering to swallow the company whole for $12.6 billion, although he's probably interested to see whether someone can cash him out at an even higher price. If all Icahn needed was some bleach, I could have lent him a jug.
- Who says consumer electronics is dead? hhgregg (NYSE: HGG ) officially opened 10 new stores in South Florida on Thursday, and it's already hiring to open 14 locations in Chicago in the fall. I wonder how many of these were surrendered Circuit City or book-superstore sites?
- Sirius XM Radio (Nasdaq: SIRI ) was added to the Nasdaq 100 index on Friday. That's validation -- with a volume knob.
- This week, Research In Motion (Nasdaq: RIMM ) held its annual shareholder meeting, which was reportedly tame despite the company's cascading share price. I wonder whether those in attendance were asked to turn off their BlackBerry devices when the meeting began.
Until next week, I remain,
Rick Munarriz
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