What news organizations can learn from Netflix's success with multi-platform pricing

By: Damon Kiesow

April 22, 2010

NewTeeVee.com
Netflix’s cross-platform delivery strategy, including DVD-by-mail and streaming video to both desktop and mobile devices, is driving increased profits, lower customer churn and reducing acquisition costs for new customers.

Netflix grew by 1.7 million subscribers in the first quarter of 2010, driving profits for the company up 25 percent over Q1 2009. According to Ryan Lawler at NewTeeVee.com, the company’s improved performance can be attributed to their pay-once, get multiple platforms subscription model.

“[CEO Reed] Hastings said … that Netflix attributes this quarter’s record low churn to an increase in streaming. Moreover, the company’s investment in streaming titles, as well as the availability of the service across multiple devices and an improved user interface, is driving more subscriber additions through word of mouth, therefore lowering Netflix’s cost of adding new subscribers.”

Media companies with a print significant subscriber base should look at Netflix’s approach. Their pricing structure, from $9 to $24 per month is based on home delivery of DVD movies, which also includes unlimited movie streams on any device they support, including the iPad and the Xbox360, PlayStation3 and Wii gaming systems, among many others.

Support high-integrity, independent journalism that serves democracy. Make a gift to Poynter today. The Poynter Institute is a nonpartisan, nonprofit organization, and your gift helps us make good journalism better.

Donate