During the past year, Netflix averaged 2.8 million cancellations per quarter. Without providing specifics, a Netflix forecast issued in late July acknowledged its higher prices will result in an unusually high cancellation rate. Pachter believes somewhere between 2 million to 3 million customers will simply close their Netflix accounts and abandon the service entirely to protest the higher prices. Netflix predicts about 10 million customers will avoid the higher prices by limiting their subscriptions to an $8-per-month streaming plan that doesn't include the latest theatrical releases available on DVD and pay-per-view. Keeping both of those options will cost $16 per month under Netflix's new pricing system. Its service emerged as a household staple during the past few years while bundling rented DVDs through the mail with unlimited Internet video streaming for little as $10 per month. Netflix, which is based in Los Gatos, has given its subscribers little reason to stray until now. population now lives within a five-minute drive of one of the company's red vending machines, which are largely stationed in Wal-Marts, drug stores, supermarkets and convenience stores. Most people won't have to go far before coming across a Redbox kiosk two-thirds of the U.S. That's because millions of people are expected to keep paying for a Netflix service that streams video over high-speed Internet connections, but will look for other places to rent DVDs at a low price. Netflix Inc.'s higher prices will drive business to video rental chain Blockbuster and other home entertainment rivals too, but none are better positioned to take advantage of the disruption than Redbox, according to Wedbush Securities analyst Michael Pachter. "Redbox is all about simplicity, convenience and value." "We are very cognizant of the value of the dollar," said Gary Cohen, Redbox's senior vice president of marketing and consumer experience. The sticker shock is expected to make Redbox, which rents DVDs for $1 per day through kiosks, even more enticing to movie lovers. video subscription service, will hit its nearly 25 million U.S subscribers with rate increases of as much as 60 percent. Beginning Thursday, Netflix, the largest U.S.
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