Netflix movie charges for every movie?

[hawkifann]

I'd bet that the majority of what is watched on Netflix comes from a small percentage of power users. And that a large percentage of subscribers go weeks or months without even using it.

Netflix is better off with more very active users. Collecting $9/mo from non-users doesn't move the meter. If they have more subscribers and can demonstrate that those subscribers are very active, then they can get better rates on content...and better content will drive more subscribers. Having to add some additional hardware infrastructure to support more connections is small potatoes compared to the content side.

 

[longliveCS40]

Netflix is better off with more very active users. Collecting $9/mo from non-users doesn't move the meter. If they have more subscribers and can demonstrate that those subscribers are very active, then they can get better rates on content...and better content will drive more subscribers. Having to add some additional hardware infrastructure to support more connections is small potatoes compared to the content side.

I'm not sure if this is really true. The bandwidth required to service the amount of traffic they have is quite expensive. Having to add OC192s and larger and larger network infrastructure can add up in a hurry but I do not know who services their traffic, either.

They certainly seem to be doing pretty well no matter what their costs. They have enough money that they're producing pretty expensive in-house shows like House of Cards and Orange Is The New Black. OITNB is over $4M an episode to produce...and House of Cards was over $100 million.

I'm guessing Netflix is doing just fine.

 

[Jim Grizzly]

Well I just signed on to NETFLIX and picked Sherlock from BBC and there are two options on the screen : Preview and Buy HD for $6.99. I must be doing something wrong. I tunes charged me $ 8.49 for the service last month. I have not paid for a movie yet just a monthly fee.

Are you sure you're not on Amazon?

 

[Jim Grizzly]

That and having to pay the extortion, yes extortion, from the Comcast's/Time Warners out there. But I agree with you, how they make money is simple. They spend X on licensing and need Y subscriptions, with Y being larger than X. Not really that difficult. Also why they don't have any "new" movies.

These streaming companies aren't being extorted. Many came out for net neutrality simply because they didn't like the flavor of the proposed classifications. Netflix, Amazon etc. are more than excited to pay for fast lanes to get a competitive advantage, provided it's on their terms.

 

[hawkifann]

I'm not sure if this is really true. The bandwidth required to service the amount of traffic they have is quite expensive. Having to add OC192s and larger and larger network infrastructure can add up in a hurry but I do not know who services their traffic, either.

They certainly seem to be doing pretty well no matter what their costs. They have enough money that they're producing pretty expensive in-house shows like House of Cards and Orange Is The New Black. OITNB is over $4M an episode to produce...and House of Cards was over $100 million.

I'm guessing Netflix is doing just fine.

I didn't mean to completely minimize the cost of infrastructure, But the reality is that bandwidth and storage have long trended cheaper year over year. Jumps in video quality (such as streaming 4K video) is going to have way more impact on the bottom line than adding incrementally more active users. But yeah, they're doing pretty well.....but the content side is still the great limiter. Getting new release movies and other highly desirable content is really expensive.

 

[theIowaHawk]

These streaming companies aren't being extorted. Many came out for net neutrality simply because they didn't like the flavor of the proposed classifications. Netflix, Amazon etc. are more than excited to pay for fast lanes to get a competitive advantage, provided it's on their terms.

I guess I completely disagree and don't see the argument otherwise. Users of Comcast/Mediacom/TW/whoever pay to have access to the internet, including Netflix. Comcast/M/TW/whoever then throttled Netflix until Netflix paid them specifically to open up the bandwidth (?). Who gets screwed? The user who pays for the internet, and now must pay more (at some point, at some level) for Netflix as well.

How is that not extortion? "Pay us or we throttle your speed".