Netflix Upgrading Content and Charges

Netflix

At a time when Netflix is struggling, as recent shares have dropped about 25 percent, they certainly have an end game in mind to help provide them with some relief and hopefully raise their worth back up. The company is supposedly planning to add ultra-HD content, and of course higher content means higher charges.

It has been in the works that Netflix, the major video streaming network, plans to add a line of movies to its roster that are in 4K, or ultra-HD. This will be higher resolution streaming, expecting to host shows such as House of Cards, Breaking Bad, and The Blacklist, where the amount of movies available on 4K will be a short list. As many films are still shot traditionally, leaving only a handful of shows that are even available in ultra-HD, many are making the change to shooting in 4K. For now, however, this limited supply of ultra-HD is leaving Netflix users and critics, alike, wondering if the limited supply is worth the price hike.

Netflix plans to charge users a whopping $11.99 per month to get content in the highest resolution, though this is not much more than the, now $8.99, that is being charged to users on a monthly basis for basic and HD streaming television shows and movies. However, the problem that users are seeing in this new plan that Netflix has, is not the fact that they are charging so much for ultra-HD, but rather that their recent rate increase is what originally caused their shares to drop.

For the last two years the price of having Netflix’s streaming service was $7.99, but a recent price increase by $1 caused the price to raise monthly to $8.99. This price increase is what supposedly caused many users to drop the service and, as well, caused a decrease in the amount of people that were signing up. At least, that is what a letter said from Netflix to the investors. The company wrote the investors after their prices fell in the third-quarter. In years before the company was adding thousands of subscribers to an already established base of about one million users. In the letter they blamed their price increase to the loss of users and decrease in expected results for newly signed up users.

This causes an unusual situation among the media, being that many users think that paying $8.99 for a monthly service where users can stream unlimited, available content, any time of day or night, and in any order they wish, is a small price to pay. Users have traditionally seemed to enjoy having the service, especially being that paying such a limited amount for streaming services far outweighs the price for cable or satellite television, where users are limited to what the cable or satellite company wants to show. (Especially after the cancellation, and continuing cancellation, of many networks.)

Netflix is justifying their rate for the ultra-HD availability, stating that because higher resolution costs more, it is only fitting that they charge more for users to have it.

The recent acquisition of the company for 4K content comes with the addition of 4K TV’s. The only users that will have the content and will have to pay for the content are those who have a 4K television, or any users who get one in the future. This type of television and streaming bring the highest quality content to the screen but it’s not without a price.

By Crystal Boulware

Sources:

The Wall Street Journal
Bloomberg BusinessweekMoneybox
BGR

Your Thoughts?