One day after rankling its 23-million strong subscriber base by almost doubling the fee for the Watch Instantly+DVD rate plan, Netflix Inc. has added a little balm to the wound.
The over the top (OTT) video leader has renewed a content deal with NBCUniversal and expanded the selection of film and TV titles on offer. There is, however, a catch: No more day-after 'Saturday Night Live' airing.
Netflix has been trying to actively beef up its television viewing options. Programming under the deal includes NBC hits like 'The Office,' '30 Rock,' 'Parenthood,' 'Law and Order: SVU' and 'The Event,' all available on a one-season-delay basis, so current programming is not included.
Also available to watch instantly will be shows from NBCUniversal's cable networks including prior season episodes of 'Warehouse 13,' 'Psych,' 'Keeping Up with the Kardashians' and 'Kimora: Life in the Fab Lane'; classic television series such as 'Leave it to Beaver,' 'Adam 12' and 'Crossing Jordan'; and Universal Pictures movies like 'Eternal Sunshine of the Spotless Mind' and 'The Motorcycle Diaries.'
Terms of the deal were undisclosed. Analysts however have been eyeing Netflix' spend on content licensing. Itís estimated that the company will be paying the Starz premium cable channel as much as $300 million per year for programming; thatís up from the original $20 to $30 million it was paying before it signed a contested renewal deal. The company has also earmarked a full $70 million for a planned expansion into Latin America and the Caribbean this fall. That's all putting a squeeze on the company's margins, giventhe low monthly ARPU it sees fro most subs.
In a move likely calculated to help fix the issue, Netflix recently announced that it is launching new unlimited DVD-only plans in the U.S. for $7.99 per month for the one DVD-out at-a-time plan and $11.99 per month for the 2 DVDs out at-a-time plan. The unlimited streaming Watch Instantly plan will remain at $7.99 a month. But most significantly, the price for getting both unlimited streaming and unlimited DVDs now will be $15.98 per month ($7.99 + $7.99). Thatís up from $9.99 per month. The increases go into effect Sept. 1 for existing subscribers. The rate hikes have angered some Netflix subscribers, who have taken to teh Web to protest the almost doubling in subscription costs fr the DVD-inclusive plans.