Netflix Raising Prices on Miserable Movies

NetflixAll subscribers to Netflix must be aware of the plethora of B List movies available on its streaming service. The television content remains top notch, with the company’s own House of Cards leading the pack. For those frustrated with the movie selection, the thought is generally that retaining the service still works because of the affordability factor. Unfortunately, Netflix has announced a plan to raise prices on its streaming content of good TV and miserable movies.

Netflix just announced its intention to raise prices for new subscribers this quarter by $1 to $2. Subscription fees for existing customers will remain the same for an unspecified “generous period.” Netflix also announced that its customer list grew to 48 million globally, an increase of four million customers. Further, the net profit per share of $.86 exceeded the expectations of stock analysts.

The increased revenues is good news for the company as it finds new ways to expand its reach. The company plans to push into the French and German markets later this year. As an additional growth strategy, Netflix has also produced its own shows, such as House of Cards and Orange is the New Black. The company branded list will also include a live action show done in conjunction with Marvel to be filmed in New York.

While the streaming TV show quality continues to develop in a positive direction, Netflix’ list of miserable movies will remain a constant even with raised prices. Netflix keeps a treasure trove of data regarding customer viewing habits. Instead of paying high licensing fees to allow streaming A List movie content, the company tracks what kinds of shows and movies subscribers prefer and offers B List fare consistent with those preferences. The only thing missing from the equation is the quality component, which is a source of frustration for many subscribers.

The increase in prices for new customers, from the current level of $7.99 per month, will still keep prices no higher than $9.99, which analysts feel will not significantly limit subscription growth. Raising prices beyond the magic ten dollar level could be another matter. At that point, analysts believe subscribers could balk at purchasing the internet content service.

The internet content provider made public its opposition to a proposed Time Warner merger with Comcast. Netflix is concerned that merging broadband cable giants will pose a threat to net neutrality, which is the concept that content providers are treated equally on broadband systems. For their part, both Time Warner and Comcast have expressed support for net neutrality, although the chances of service degradation for some content providers has seemingly become at least possible due to the Verizon decision announced by a federal appeals court in January in which the FCC’s regulations prohibiting internet discrimination were struck down.

Netflix continues to flourish with streaming offerings that include a multitude of miserable movies and projects confidence that raising prices will not deter its upward revenue and profits trend. Given their home run with House of Cards, the company does have a plan that works, even if subscribers remain frustrated trying to find good movies in the streaming content.

By William Costolo



The Wire

Los Angeles Times