Oh c'mon -- you had to know this was a possibility, right? As Netflix's
Watch Instantly service becomes more viable and its library expands, more and more users are going to start tapping into those servers for instantaneous enjoyment. Eventually, suggests Cowen and Company analyst James Friedland, all that instant gratification could lead to more costs, and not surprisingly, it'll be the end-user paying up. As an increasing amount of subscribers use the online streaming feature,
Netflix is asked to shell out more cash to studios for the content. Friedland predicts that "the company will charge an extra fee for the service [if it] starts to squeeze profit margins," just like it
already did with Blu-ray Discs. We get the feeling most customers wouldn't balk at another $1 per month charge so long as the instant library started to include new releases, but if not, who knows what the backlash would be.
posted Jan 23rd 2009 7:32PM
If they were going to charge extra then why did they change it from a specific amount of hours you can watch it depending on plan to unlimited hours?
I can see Netflix doing this, just like they did with Blu Ray.
They are going to have to have some extra cash laying around to manage that infrastructure for streaming media :)
If people are using Watch Instantly instead of having DVDs sent to them, then WI is saving them a fortune in postage and inventory storage costs. I think this story is probably false. I see Netflix expanding WI in the near future, making available newer releases and looking into ways of making STBs more effective so there are less reasons to actually have discs sent. It makes more sense.
They can also lower the number of discs at a time and therefore price if watch instantly is supplementing disc viewing. If this starts happening, then they have to make up that lost profit.
actually this news is the best ive heard in a while (but it is another "prediction").... i want them to charge more so they can start doing things like new releases. they really should break out the streaming service on its own. if they added new releases i would rather stream everything than worry about dvd or bluray.
do something on the order of: $14.99 for watch it now as a stand alone version and a smaller monthly addon to any dvd/bluray plan. but i would then expect new releases.
New releases can't happen until they get a 5.1 solution. I'd vote for that over anything else, even more HD.
I'd happily pay an extra $1 or even an extra $5 per month for the current service as-is.
It's a steal if you watch a lot of TV. I use Netflix as a substitute for regular cable TV and my daughter gets a good 2-3 hours of use per day out of this, seven days a week.
Why don't you have your kid read a book or go outside and play rather then sitting 3 hours a day 7 days a week. Use your head dumbass!!!!!
I guess Netflix is a good baby sitter, as well as substitute parent...
I won't mind as long as they add more content, specifically more HD content. Though I'm not getting my hopes up after the whole Blu-ray thing.. Increased fees, but no increase of Blu-Ray stock apparently.
From IMDB's Studio Breafing
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Studios To Netflix's Online Service: No New Films For You
23 January 2009 1:38 AM, PST
The major studios have balked at allowing Netflix to include their latest films on its streaming video service, leaving the online video renter only older titles and documentaries to offer subscribers, Investor's Business Daily reported Thursday. Netflix does not charge for the streaming video service, including it in its subscription plan, which begins at $8.99 per month. Although it has a library of 100,000 movies, only 12,000 titles can be seen via its streaming service. Asked whether Netflix would begin charging "rental" fees so that it can include newer titles, Netflix CEO Reed Hastings, replied that it was unlikely. "We're focused on the subscription segment, which is less expensive for the consumer."
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Basically what Reed Hasting is stating is if the studios request more money to stream new releases they'll just wait until those releases go to Stars or fall under their streaming contracts with the studios, basically meaning your waiting 6-12 months before you'll be able to stream the video, if it means they can avoid charging extra over the subscription fees.
If they add a surcharge they certainly better at least provide 5.1 sound and more HD content.
They need to switch to an a la carte method now that they've got so many different products. Here's an example....
Nevermind the dollar amounts...I'm just making 'em up.
Prices are per month
Baseline service charge = $6
Snail Mail Services
1 disc at a time = free
2 discs at a time = +$2
3 discs at a time = +$3
blu-ray rentals = +$1
Streaming Services
Standard Def older movies = free
High Def upgrade = +$2
Newer Releases = +$3
So if I wanted to get the works...3 blu-rays mailed to me at a time and HD movies streamed to my PC...I'd pay $13 a month. Like I said...don't worry about the dollar amounts. I have no idea what Netflix needs to charge to remain profitable. I just feel like we need to be able to pick and choose what services we want. McDonalds doesn't make me order a cheeseburger if I just want a soda. This should/could work the exact same way.
But... that's exactly what Netflix does now.
They give you a choice regarding the number of discs at a time...
they give you a choice about adding BD or not for $1
Watch instantly is free, so there's no choice involved.
If you're talking about potential pricing for watch instantly, then I totally agree.
I'm glad someone mentioned the IMDB news article. The 'analyst' is either a shill for the studios -or- is drawing a conclusion based on studio wants.
Netflix does have a $7.99 Starz streaming only (I.e. the worst encoded crap we have, you'll hate the picture quality).
If they do go to charging extra, I'm dumping them all together and will deal with the TV shows / movies on Hulu. They are becoming like the cable company, nickle and dime you until your $8.99 plan is $89.99 and you get less than you were getting when it was $8.99.
Possibility? More like inevitability.
Physical rentals may be advertised as "unlimited" with Netflix but there are plenty of barriers to control what we actually consume (mail times, throttling of new releases for heavy renters, etc). But unlimited in the on demand world means the floodgates will open for Netflix. Who do we think is going to pay for this unpredictability?
New releases are going to bring hell of a lot larger surcharges than a dollar a month.
They better not charge another dollar! Hell they need to send the movie that I have in my Queue. Its been weeks since I've seen a good Blu-ray and they charged me a $1.00 and the service is worst now than it was before. Charge me another dollar for watching something instantly and I'll drop Netflix.
it's reasonable to expect some kind of bump in fees if the 'instantly watch' function begins eating at profits. bandwith costs money.
it's all about balance. if they can improve their catalogue to include recent or semi-recent blockbusters more frequently than, yea, that would offset the pain of higher fees. if not, well...
it's reasonable to expect some kind of bump in fees if the 'instantly watch' function begins eating at profits. bandwith costs money.
it's all about balance. if they can improve their catalogue to include recent or semi-recent blockbusters more frequently than, yea, that would offset the pain of higher fees. if not, well...
You have more people signing up to Netlix for the Streaming Content. That's MORE PEOPLE PAYING for the service. So why would they also have to bump up costs? That just seems DUMB. They're already getting more Income. If they raise prices I'd drop the service!!! In fact I think Blockbuster will get in on the act at some point and especially AMAZON. Not the Per Movie, but Unlimited also. More Competition, Prices go down, or more Newer Releases get posted for Instant Streaming. This is where the Future is going.
Put it this was, would the Movie Company's make MORE MONEY if you have 100 people per month streaming all they want paying a monthly Subscription, doesn't matter how much or little they watch, or a few of that Hundred buying a DVD here and there, or just Renting DVDs. Which Business Model will in the end makes more money for these movie Studio's?!?!
The rental model would make more money than the streaming model.
With the rental, they pay for the DVD once and rent it out dozens of times (or more).
With streaming, the more people watching, the more it costs Netflix. Postage is cheaper than bandwidth, especially considering that even the fastest movie watchers will only have 3 disks shipped every 2-3 days. Streaming can theoretically occur 24/7.
Netflix has made no secret that their ultimate goal is online delivery. Eventually they will charge for this, and I doubt it will be an extra dollar.
"You have more people signing up to Netlix for the Streaming Content. That's MORE PEOPLE PAYING for the service. So why would they also have to bump up costs? That just seems DUMB."
Do you honestly think Netflix pays a one time flat fee to content providers to license their property? No movie studio in the world would be stupid enough to agree to such an arrangement. I guarantee you that every time a movie or TV show is streamed the studio that owns it gets paid. More streams means more money Netflix has to pay out.
"Put it this was, would the Movie Company's make MORE MONEY if you have 100 people per month streaming all they want paying a monthly Subscription, doesn't matter how much or little they watch, or a few of that Hundred buying a DVD here and there, or just Renting DVDs. Which Business Model will in the end makes more money for these movie Studio's?!?!"
Given that there are reasonable limits to how much people can watch with with the current "unlimited" plans on Netflix its pretty easy to calculate what most people will actually watch and set the fees accordingly. A one at a time plan means the average renter will see x movies a month. An 8 at a time plan means they will see Y movies a month.
None of this is true with streaming. There are no differently priced tiers and there are no physical barriers to consumption. A 9.99 renter can watch just as much as a 59.99 subscriber. So the average number of movies and TV shows watched each month will be much, much higher. If anythig, Netflix is likley losing money right now on the watch now plan. This is just them jockying for power and getting eyeballs. Don't think for a second it will stay this way forever.
An unlimited streaming plan with all major studios ain't gonna cost 10 bucks. And extra dollar ain't gonna cut it either. I doubt it will even be available for 20 a month. I predict 30 or 40 when all the major studio content is available. And maybe even a higher priced tier for access to HD content.
@minimalist
"I doubt it will even be available for 20 a month. I predict 30 or 40 when all the major studio content is available. And maybe even a higher priced tier for access to HD content."
If that's the case, very few will pay. I don't know anyone who would pay that kind of money from month to month just to stream content. We're not paying that kind of money now for Netflix for unlimited rentals; why would we for streaming?
Couldn't Netflix set up similar limits with streaming that they do with DVD's? With streaming, you can only get one movie at a time, instead of three to eight DVD's at a time. What would keep them from saying that for a flat fee, you can only stream "X" amount of movies per month? Nothing. They could do whatever they wanted in regard to that.
So what exactly are you basing your figures on? I would NEVER pay over $30/mo just to stream content, even in HD. I don't think many people would. Most don't pay more than that for Netflix now. They aren't going to just because of streaming or HD. Streaming and HD is where everything has been heading for some time now and will become the norm some day. Netflix isn't the only one's doing it. But even so, they aren't going to be able to charge some outlandish price for it. It's going to have to be reasonable, otherwise, people will just stick with physical HD media for the foreseeable future.
I want to clarify one thing with what I said...
When I said I wouldn't pay more than $30/mo. to stream HD content, I'm saying that I wouldn't pay that over and above my current Netflix membership. That price would need to include unlimited Blu-ray rentals every month as well as HD streams.
@Cassini
"So what exactly are you basing your figures on? I would NEVER pay over $30/mo just to stream content, even in HD."
Unlimited streaming of every movie ever made, plus all TV shows released on DVD all available at your fingertips in HD 24/7/365? Sounds a lot like cable TV to me. And what do people pay for that? 50 60, 80 dollars?
"Couldn't Netflix set up similar limits with streaming that they do with DVD's? With streaming, you can only get one movie at a time, instead of three to eight DVD's at a time."
They certainly could. And if people want really cheap plans this is the most likely scenario. But all the people bitching about the current lack of content for what amounts to a free value add are being unreasonable. For them to claim that they wouldn't even pay a dollar more than they are paying right now means they will have a rude awakening. unlimited in a digital world is a totally different beast than "unlimited" with discs delivered by the US postal service.. You don't get something for nothing.
Yeah, they definitely have to add more new release titles to the Watch Now service. New movies and episodes of TV shows from the night before would make it worth any extra fees.
Seriously, I don't see what is the point of streaming this video thing with Netflix. I went ahead and tried that service and all the movies the had were all freaking old crap movies...none of the recent movies were there to stream.
I believe the analyst is wrong on this one.
Unlike Blu-ray, streaming should cost less to deliver, this is especially true because when the number of customers increases, the cost per movie/customer decreases.
Netflix's long term goal here is to stay in business. That is to keep giving everyone a reason to give them $20/mo. If streaming from Apple, Vudu or the 360 took over, Netflix would eventually lose all it's customers.
So Netflix figures it'll buy all of Hollywood's seconds and b-rate titles to build its business and then when streaming does take over, it'll be poised for growth.
would be nice if they had a better HD selection. its dreadful. only like 7 pages and most are crappy tv series that im not interested in. theres virtually no good movies in there.
I'm still wishing they added better content in the Watch Instantly HD section. Just about the only good movies there are recent TV shows and old movies. And even the regular Watch Instantly section, it mostly old stuff.
Oh well, maybe in a few years when DVD is dead.
"Unlike Blu-ray, streaming should cost less to deliver, this is especially true because when the number of customers increases, the cost per movie/customer decreases."
This is completely false. The exact opposite is true. The more people watching, the more bandwidth consumed, the more Netflix must pay for the bandwidth.
Look at the radio vs podcast model. On radio if you have 1 or 1 million people listening it costs exactly the same to send out the broadcast. For a podcast, the difference would be a million times more bandwidth, and since bandwidth is charged per byte, their costs increase as the popularity increases. (Obviously this ignores bandwidth sponsors and services like Libsyn.)
Yes! Please do! More money = more content... and NetFlixs' Watch Instantly needs more content! I'd gladly pay up to $5 more per month.
I don't see this happening until the quality of the streamed netflix service closer to higher resolution.
it is a good service, but it is not used by most people who use Netflix, it is a growing service for netflix. a placeholder for the future and it is growing in use. but if Netflix charges more ... i don't know if most people would pay for it.
as it is... the digital streaming service is a loss leader ... but it gets people ready to use netflix in the digital age. so it becomes more important to them to keep positioned for the digital age. amazon, hulu and others are doing impressive digital service. itunes is expanding nicely. so it is obvious netflix needs to attract people to its digital offerings.
I wouldn't mind paying $1 if I can force the stream to be the highest quality/HD. I can pause it and wait a few minutes.