Here's a question I was asking myself last night in the midst of the whole Netflix/Qwikster brouhaha. If Reed Hastings hadn't (perhaps rashly) promised that the companies were "done with" raising prices, I would've guessed that splitting the companies in two would've been a preemptive stab at disguising future price hikes. (And, despite Hastings' protestation, I'd guess that price hikes are still likely, especially if the USPS has to raise their prices or degrade their service much more.)
The question is, would that really be such a bad thing? After spending a good ten minutes browsing my Netflix Instant Queue looking for something I actually wanted to watch, I had to think: how much more would I be willing to pay for a much broader selection of films and television to watch? I cut off my cable recently, saving myself a good 70 or 80 bucks a month, but I'd gladly re-invest some of that cash into a more expensive streaming service, if the selection was much better.
Let's hypothesize. Assume that Netflix could acquire streaming rights to fully half of the Hollywood releases that come out each year, and let's say that they get the rights to those movies a month after they arrive on DVD, on top of their existing library, how much more would you pay for their streaming service? Would it be worth another ten bucks a month to you? Another twenty? Keep in mind that the cable/television window for modern releases doesn't start until a good year or two after a film has hit DVDs, which is why it's already difficult for Netflix to get current releases on their service with any timeliness. I'm not saying I don't get value for my money at eight bucks a month; the ability to stream all of Mad Men, by itself, is a pretty amazing value at that cost when you compare it to buying DVD sets, even if I don't permanently own anything.
Which I guess is my point; I'd be happy to pay, say, $30 a month if it would allow Netflix to go after the rights to these current movies so that I wouldn't have to worry about getting them through Qwikstar (which is a word that is extremely awkward to type, for some reason). Currently they spend around $600 million out of something like $3.2 billion in yearly revenue on shipping costs, so being able to shift that cost towards content acquisitions that directly affect the strengths of their library is good for everyone, which is why people suspect that this split might be a bit of a red herring and that Netflix wouldn't entirely mind getting out of the DVD business entirely, even if they have to set Qwikstar up to intentionally fail to do so.
Regardless of Qwikstar, how do you see your future with Netflix playing out? Is eight bucks a month worth the current selection? Would they need to announce some drastically increased library before convincing you to pay more, or would you pay more right now if they promised that it would enable them to expand their offerings? What's your upper limit on Netflix, basically, and how much content would they have to offer on streaming to get you to pay it?