Belfast Telegraph

Tuesday 2 September 2014

Netflix: good content comes at a cost

Netflix is to raise its prices amid strong first-quarter results (AP)
Netflix is to raise its prices amid strong first-quarter results (AP)

Few household habits have evolved more rapidly over the past decade than how we consume television shows.

A golden age of US television reached our shores in the early 2000s when we fell in love with comedies like Sex and the City, and became hooked on dramas like Six Feet Under and The Sopranos.

Those of us who consumed television via weekly episodes were swept off our feet when box-set DVD packages emerged. We could buy them cheaply on the high street in chains like HMV – who hasn't stood in a long and winding pre-Christmas queue at HMV, clutching the latest comedy or drama box-sets?

Such was the prevalence and popularity of the box-set up until the mid-2000s that they seemed like a sacred cow of popular culture.

But just as video killed the radio star, the convenience online viewing platforms like Netflix, LoveFilm and Apple TV have all but killed the box-set (though framing that trend into a catchy lyric would be beyond most of us).

Now Netflix, which made its mark with a slick US adaptation of the BBC's 1990s political thriller series House of Cards, is putting up its prices after facing rising costs for programmes.

The company has an uncomfortable history of price increases and suffered a customer backlash in 2011 when US prices rose by as much as 60%.

Further Reading

Customers to absorb cost of Netflix growth  

However, it is now a more well-established business with several successful shows in its stable, such as Orange is the New Black, as well as House of Cards – and as analysts point out, the economy is more robust, leaving customers more amenable to absorbing a price increase.

In quarterly results revealed yesterday, its revenues passed the $1bn mark, which will leave it more confident about its judgment in going for a price increase, which it vows to use to fund more content.

And testing out a price increase in Ireland had also left it fairly confident that customers will absorb the increase, reporting that it had seen "limited impact" from the January increase from €6.99 to €7.99.

Putting prices up may be the only way of keeping content up to date in the fast-moving world of home-viewing – and chances are, its competitors will follow.

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Comment

More

Company Profiles

More

Help & Advice

More

People on the move

More