Media pricing is subjective. Yes, its cheaper than buying outright on iTunes; but its still more expensive that pirating it. It'll make a great pricing experiment.
Everyone values content differently.
EDIT: Easy on the downvotes y'all. I don't pirate my content, I'm saying people will.
$7.99/mo had that perfect impulse-buy attraction to it, and got me into the game. But after using it and seeing the kind of content they've been building (even despite the content that they've lost, and will contractually have to lose later), $10/mo still seems pretty palatable to me too.
The price of $2 or $3 per episode does not itself justify that the cost of Netflix streaming should increase.
I could create an alternative service that charges $50 or $100 per episode, and the existence of such an absurd service does not itself imply that Netflix should charge $20/month.
Recently, I've been really impressed by the quality of the streams I'm getting from hbogo vs typical show on Netflix. Hopefully this allows Netflix to push higher quality streams down the pipe.
Or there is a magical setting I'm missing...
If they want to survive they need to do 3 things imho: 1. Improve their recommendation algorithm 2. More high quality original series (preferably without extorting Maryland for its arts funding) 3. Stop losing quality content
Of course, we now own the video as it's highly rewatchable for the kiddo, but I wouldn't doubt that Neflix would have happily paid ever increasing content costs to a point but their supplier cut them off because they felt Netflix was competing with them.
a) Everyone and their sister seems to have the technology for a streaming video service.
b) They have no shortage of big name competitors like Amazon, Hulu, and Vudu.
c) Content companies that provide the bulk of value to Netflix subscribers can keep raising their licensing fees until Netflix is left with zero profit.
That said, I think C is always going to be the anchor that drags Netflix down which is why they started generating their own catalog. If they can get up to a HBO quality of selection/service on their current model...with the same level of original programming...who wouldn't pay $120/year for streaming everything HBO has?
For me, the appeal of Netflix in the DVD-by-mail era was a large complete-feeling catalog of movies. They have not been able to recreate that experience in the streaming era, which is why they lost me as a customer a couple years back (replaced by a la carte rentals from iTunes, and a great local video store).
They indeed seem to have decided to become another HBO, with "must-watch" original content, but that feels like a very different business, and one that is a lot more difficult to dominate--they will always be one of many channels, instead of being the platform.
IRONIC, SAD EDIT: That great local video store is in trouble ( https://www.indiegogo.com/projects/save-le-video-a-sf-film-i... )
I love how they now make "Netflix original series." I hope they can release more of that with partner studios. More.
Regarding movies collections: please work harder to convince the industry to load contents over streaming. I don't care about owning a digital copy. I don't care about the whole Netflix DRM. I don't want to own that copy. I used to own many CDs and DVDs and they are just sitting there wasting space (I do care about owning my digital books I purchase, I want to own that PDF).
I just want to be able to click and watch on a monthly subscription. I am okay with new movies shown only at theater and streaming after theater. I am fine with that; I still love theater.
I guess it's Pingdom and Founders Card who took the "escalating price grandfathered-subscription model" to the limit, but it might be interesting if Netflix committed to roughly the same thing.
(with FC, it started out as $99/yr renewable at that price indefinitely for ~$300 in benefits, and went up $50 every half-year along with increased benefits; it's now about $400/yr and maybe $400-600/yr in value).
This might be an interesting model for SaaS startups, and is sort of related to the kickstarter "50 units at early adopter discount" model of tiered pricing.
I thought the towns local video store would have followed others around the world into bankruptcy by now but they are still charging $7 for an overnight rental and still have customers.
About outright piracy: all the shows available on Netflix are available ‘elsewhere’, and many here (me included) have previously expressed their frustration of local limits for certain shows when one travels. Paying for Netflix is made out of convenience and respect for the economics of video creation: I don’t think a price-hike, combined with announces about investment in new content, will trigger that many pirates. At least, I hope I’m not wrong about that.
It's a good product. They ask a fair price. I'm happy for them to take my money. Amazon, Redbox, and movie theaters also take my money when I want something Netflix doesn't offer.
The problem isn't trying to save money. It's accessibility.
If perspective users really can't justify Netflix at 10 dollars, they probably couldn't justify it at 8 dollars anyways.
"Netflix generated revenue of $1.07 billion in Q1 of 2014, compared to 1.02 billion in Q1 of 2013"
Don't think they have any short-term threat to their existence at this point.
