Netflix will raise streaming prices for new members this quarter | Hacker News Reader

Netflix will raise streaming prices for new members this quarter

gigaom.com

41 pointsmikkelewis45 comments

I think this has been a long time coming. $8 a month is very, very cheap for legal streaming video. Single episodes cost $2 or $3 when bought outright, and Hulu Plus exists at the same price point but with a tremendous amount of ads (getting near to broadcast-level). It has been an absolute bargain for a while, and will remain so at $10/m, in my mind.

Absolutely agree.

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...

It's unlikely to be the cause of your quality issues, but there is in fact a magical setting for stream quality in the Netflix player. With the player open (but not fullscreen) and streaming a video, press ctrl+alt+shift+s to select bitrate.

> $8 a month is very, very cheap for legal streaming video.

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.

Any price is more expensive than pirating it. Nobody is going to compete with piracy on price.

Personally, I find the most interesting thing is that the quality of pirated content is often superior to that aquired by legal means.

If the legal distributors can't compete on price, and refuse to compete with quality or convenience, what else have they got?

Arguably, you can compete on price (Hulu).

The ads model works as long as its not too painful. 2-3 ads/show? Reasonable. 12+ ads per show (because you're addicted to ad pricing on broadcast, and for the love of god please can't we get that on the web)? Pirate Bay.

Actually, there are substantial secondary benefits to going legal. Giving back to the creator, guaranteed quality, avoiding legal entanglements, cheaper traffic, higher speeds, etc. All things that aren't typically offered by pirated content providers.

The problem is that legal sources have issues around trying to controlling when/where/how the content is viewed, which might be the majority of the value in the media (over and above the content itself).

> Giving back to the creator

Does the creator truly win out when the content is paid for? I'm using music as an example; not sure how its panning out on the Netflix/video side.

> guaranteed quality

Can you always reliably get 1080p from Netflix? Because you can from TPB.

> avoiding legal entanglements

Which is now a moot point considering the number of judges who have indicated that an IP address in a log can't be tied to a specific end user.

> cheaper traffic, higher speeds

Again, as with quality, I think this depends on your ISP. You'll only get frustrated so many times with Netflix rendition switching or buffering before you'll fire up your bittorrent client, let it suck down 10-20 episodes, and watch at your leisure.

Agreed. I'd pay a couple bucks more a month for twice the selection. I'm a film nut and love a lot of old titles that aren't available. My Disc queue is way more interesting than my streaming queue

If they added more older/rarer/foreigner films I'd happily pay more than they charge now (vs. not subscribing currently)!

I wonder if the reason they don't have a lot of the older films is due to the fact that digital rights were never fleshed out? If so, I'd be curious to know if that's the type of thing that can be resolved (and how).

That's always been my suspicion, and it's probably worse the further in time and space you move from Hollywood. So, beyond the most famous examples, older foreign movies will probably never appear.

If it had 90% of movies and TV shows (weighted by popularity), I'd easily pay $100/month. Of course I could get it all for free by pirating it, but not having to would be tremendously more convenient.

It's cheap, but I wouldn't pay much more for it. There really is very little I find worth watching on Netflix. A couple of TV series, and few random other things. I hardly ever watch a movie.

Well, hopefully the increase in prices will allow them to compete a little better for the good content (either buying what's already out there or producing more of it themselves).

The missus was pretty shocked that Spotify Premium costs more than Netflix. Once she brought that up, I actually thought about it and absolutely agree.

$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.

This is really a false equivication.

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.

I understand the price hike, but Netflix feels like its value to me as a media consumer is stagnating. House of Cards and a bit of laziness is why I've kept it, but I consider ditching it whenever I'm reminded of the fact that I pay for it.

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

Netflix's problem is that they can't prevent #3 - case in point, my daughter discovered Ponyo on Netflix which was possible through NF's agreement with Starz. At some point Starz refused to give Netflix a license to their licensable content (i.e., to many Disney titles in this case) at any cost.

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.

Well Stars would have made a deal with Netflix however they wanted tiered pricing and Netflix said no. The Stars deal also didn't include enough money. $300 million a year is not a lot when compared to Dreamworks deal where they get $30 million per movie.

I'm bearish on Netflix because...

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.

Hulu -> Ads Vudu -> Don't you have to pay way more than $7.99 if you watch a few shows/videos a month? Amazon -> Honestly, not impressed unless they start making it work on all platforms.

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?

>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... )

Netflix has done a great job building that service and it is easy to underestimate how hard it is to build. Amazon has EC2 and Google has Youtube. There are no other realistic competitors in the streaming service at that scale for now in my opinion.

I am not against raising $1 or $2. The service has been incredibly stable and fast for me, even when my internet speed was slow.

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 wonder how much this will bump new subscribers before it takes effect.

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.

The thing I find most interesting about a service like Netflix is the complete inversion of costs of product and delivery for someone in Australia. A monthly Netflix subscription costs less than a couple of coffees here. The data caps on Internet connections and the inaction of successive governments to address market failures means I could pay hundreds of dollars a month to stream a service like Netflix. It can be quite a lot cheaper to buy box sets of shows or take out a cable tv subscription than pay data costs but you don't get the same flexibility.

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.

As expected. Comcast shakes Netflix for more money, Netflix then forwards the bill to customers.

I’m surprised that the quotes, and graphics (unsourced, but presumably provided by Netflix) insist on the international dimension of that decision — and yet, no-one in this discussion mentions that point. Netflix is roughly the same price in countries with different standards of living, and such an evolution is most likely going to mean adapting — and more cross-frontier purchases. I’m already doing it: I first booked Netflix in one country; moved and kept my orignal subscription, out of laziness to be honest, but it would have been expensive to switch.

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.

Look, if it's possible to pay under $20 a month for unlimited downloading from a usenet provider, and take advantage of existing services to stream media to almost all devices, is it really worth it to pay Netflix for a subpar library?

As a developer who expects people to pay me for the software that I create for them and not just take advantage of me, I have no problem rewarding content creators for the entertainment they provide. My Netflix subscription probably works out to be about 25 cents per movie / TV show that I watch. I'm as little interested in pirating this content as I would be paying someone who works at a movie theater $20/month to sneak me in through the back door.

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.

I have no problem paying people for content. However, if I'm not able to get the content I want, I don't feel as good.

The problem isn't trying to save money. It's accessibility.

I'd be really curious to see an aggregate demand curve for Netflix. Find out its elasticity and see how much price increases help/hurt its revenue. Personally, I think I would pay up to $30/month for it.

At $20 I leave unless the quality of movie/documentary/show options increases. Frankly, I'd pay $40 a month if they had better selections. I also think about canceling my service, but then I remember it costs so little. I rarely watch it now though outside of house of cards and super extreme out of ideas boredom.

I mostly use Netflix + Amazon, where I rent movies or buy recent TV episodes from Amazon for a small fee and use Netflix for general exploration and children's programming. If Netflix could offer me the rentals and TV episodes for an additional fee, I'd happily use it... I generally prefer their experience over Amazon's, and Netflix is rock solid for me vs. Amazon's occasional failures at prime time (YMMV, of course). But they've really bought into this "one fee for everything" model, and, well, I guess that made sense three or four years ago, but I fear it may be the hill they die on. Instead they seem to prefer some sort of ideological purity and for more of my money to go to Amazon every month, even though I actually spend more clock time with Netflix.

Good! If they doubled the price and the content I would be thrilled. For 80% of Americans, netflix is a negligibe expense.

#ComcastTax

Why discriminate against new customers? It doesn't seem like a good business case.

Getting a new customer is always more expensive than keeping a current customer - it makes good business sense then, to cover the added cost.

The last time they tried raising prices, everyone threw a hissy fit. This is their way of slowly rolling out a new pricing model. Current users will eventually get the new price, but for right now they feel like Netflix is being loyal to them.

If perspective users really can't justify Netflix at 10 dollars, they probably couldn't justify it at 8 dollars anyways.

To raise prices when apps like popcorn time come around and threaten your very existence seems like the height of stupidity to me.

I can guarantee that Netflix's primary demographic will not think "oh, Netflix raised its prices by a dollar, let's do piracy!"

From TFA: "Netflix now has [..] 48.35 million streaming subscribers worldwide"

"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.

What will probably end up occurring is the countries were torrents are legal will end up keeping the same price of $7.99... Where as countries that have laws against torrents, will most likely have an increase. Popcorn-time doesn't make it legal to torrent/stream videos without purchase in the United States, thus we can safely say that the price in the United States will increase.

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