Things are about to get slightly more expensive for viewers, but there's never been a more lucrative time to be a television producer. “And if we do that well, we create more value for our subscribers and then occasionally, we'll come to them and will ask for a little bit more money, so that we can actually start that next cycle of investment.” “The model we've got is a fairly simplistic one where we think our job is to effectively invest the money that our subscribers give us every month, so that we can give them incredible content and a better and better product experience,” said Greg Peters. 36 billion a year instead of 44.4 billion a year (made up numbers based on the 247.2 million paid subscribers worldwide 15 per account per month. In an earnings call at the end of last year following price rises in the US, Netflix’s chief product officer talked about cycles of investment in content. If they have to pay writers more, they have to charge us more because they’ll only be making 3 billion dollars a month instead of 3.7 billion a month. It is the first time Netflix has increased UK prices since 2017. “We change our prices from time to time to reflect the significant investments we’ve made in new TV shows and films, as well as improvements to our product,” they said. In the UK, Britbox – a streaming service that will be populated with shows from the ITV and BBC back catalogues – is yet another competitor.Ī Netflix spokesperson pointed to the significant investments the company had made in UK shows such as Black Mirror, Sex Education and After Life. A US-based survey found 32 per cent of Netflix customers would cancel their subscriptions if shows such as The Office and Friends were removed.Īpple, another rival with deep pockets, is also coming to market with Apple TV+ this autumn, and has partnerships with HBO, Showtime and Starz along with a cast of huge names from cinema and TV, including Oprah Winfrey, Steven Spielberg and JJ Abrams. It reportedly paid $100m to WarnerMedia to keep Friends on its service for one extra year. Netflix also faces other competitors pulling their own shows. Disney hasn’t announced its UK prices yet, but in the US Disney+ will cost $6.99 per month – about half the price of a Netflix subscription.ĭisney is planning on removing all of its original movies from Netflix's catalouge. Disney’s upcoming new streaming service, which will have established hits such as Star Wars and the Marvel films in its catalogue from day one, is a major concern. A small price increase for some of its 150 million worldwide subscribers could make a big difference in keeping a cap on its debt, which currently stands at around $30bn.īut the biggest reason is the rise of new streaming competitors who are all seeking to take a slice of the market, which is predicted to reach $125bn by 2025. There are two main reasons why Netflix is increasing prices now. Netflix is now a media giant and shapes the way the TV and movie industry thinks. "I didn't make the communication and we didn't explain why we were doing it," Reed Hastings said in a letter to customers at the time. What Netflix does is a bellwether for what a lot of other companies are going to do. Netflix launched in Canada in September 2010, charging $7.99 for unlimited TV shows and movies per month.The big lesson Netflix's CEO took away from the debacle was that customers should be given advanced warning about price increases. It let Netflix test out price points almost dollar by dollar before eventually sliding its plan up to match. As always, we will continue to offer a range of plans so that people can pick a price that works for their budget." "Members tell us how much they value variety, and we're updating our prices so that we can continue to invest in more shows and films. "Canadians have never had more choices when it comes to entertainment, and we're more committed than ever to delivering an experience that exceeds their expectations," Netflix said in a statement about Thursday's price increase. And the premium offers four-screen usage and ultra HD video. The standard plan allows two screens with high-definition resolution. The basic plan lets subscribers watch on one screen at a time at a lower-quality resolution. At that time, it bumped up the basic monthly plan by a dollar to $9.99, the standard by $3 to $13.99 and the premium by $3 to $16.99. The company's last price increase in Canada was announced in November 2018. Netflix has cancelled some of its programming recently due to COVID-19 pandemic-related issues, including Glow, The Society and I Am Not Okay With This. Analysis Why Netflix and HBO don't care if they lose $500M a year to password sharing
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