Ready for a laugh?
Yesterday's Los Angeles Times carried a story about a consumer lawsuit against Netflix
I'm no legal eagle, but I can spot more holes in this litigation than some of M. Night Shyamalan's recent plotlines.
For starters, let's recall that Wal-Mart had roughly 100,000 members at the time. It was just a small player, unwilling to take on Netflix and Blockbuster
The plaintiffs accuse Netflix of raising its prices by $3 a month as a result of the Wal-Mart grab. Really? A year earlier, Netflix had slashed the monthly tab for its most popular plan -- one that allows unlimited rentals with no more than three titles out at a time -- by $4 to $17.99. The catalyst for the price cut is that it feared that Amazon.com
In recent years, Blockbuster has gone from pricing its Total Access plan at price points lower and slightly higher than Netflix. Amazon remains a threat to throw its hat in the ring, but it has decided to focus its efforts on digital delivery, like Apple
Oh, and where exactly is the Netflix pricing strategy today? The same monthly plan that set film buffs back $21.99 in 2004 and $17.99 in 2005 is now just $16.99. Netflix has also gone on to include digital streaming at no additional cost. If the minor deal with Netflix is collusion to inflate prices, why are prices heading the other way?
Again, I'm no courtroom expert. Maybe there is some legal precedent behind the case. But everyone from Blockbuster to Netflix to the McDonald's
Did I say frivolous? I meant hilarious.
Other headline relics:
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Longtime Fool contributor Rick Munarriz has been a Netflix shareholder -- and subscriber -- since 2002. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.