July 13, 2011 04:00 pm EDT

Editorial: Netflix was too cheap before, but now it's just wrong

Yesterday Netflix did something pretty big: it cut the umbilical cord on its streaming video offerings. What was once a funny little niche offering, a rag-tag collection of canceled TV shows you never watched and '80s movies you never rented, had grown into something big, something that still wasn't quite great but was legitimately very good. As such, that service deserved its own plan, to stand tall and apart from the red envelopes that made the company famous.

But there's one problem: after cutting Instant loose, creating a new $7.99 streaming-only plan, Netflix stuck the dagger right in its own side by not re-thinking its disc-based rentals -- plans that looked a lot more valuable before than they do now. Netflix has succeeded in making its on-demand offerings so good that those unlimited snail mail samplings can't quite stand up on their own two feet anymore. At least, they can't stand up tall enough to support their $7.99 and up prices. Maybe, Netflix, it's time to go back to the fundamentals.

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Editorial: Netflix was too cheap before, but now it's just wrong originally appeared on Engadget on Wed, 13 Jul 2011 12:00:00 EDT. Please see our terms for use of feeds.

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