Thursday, February 2, 2012

Is Netflix a Monopoly?

Clearly, they don't care.
When I think about my options for renting a movie only two companies come to mind: Netflix and Redbox. Both are different in their own way but both have the same purpose, which is to provide movie rentals to us. Netflix has already been raising prices and now Redbox might be facing that choice as well. MSN just released a short article about the fact that Warner Brothers wants the two companies to wait 56 days after a film release to provide rentals (the current wait is 28 days). In this request, Netflix agreed with WB while Redbox refused. The bottom line is that Redbox will now have to pay more for Warner Brothers releases because they will have to turn to sources outside of the film company.

My question has to do with why Netflix didn't back up Redbox's choice. It's clear that Netflix has the upper hand, what with subscribers paying monthly fees to have access to a much broader range of films. Redbox relies almost entirely on new releases and rarely carries the same films more than a couple of months. Also, if Redbox has to start raising prices it is more than likely that people will turn to Netflix as the smarter way to get 'more bang for your buck.' So what do we do? If people continue to turn to Netflix for movie rentals there will be nothing to stop the company from consistently raising prices. I don't see them going anywhere in the future but up and there really isn't any true competition to stand in their way. Any thoughts on this? Am I crazy for even caring?

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