Whenever Netflix increases its prices – which is almost as often as Ben Extay falls in love with A -List Celebrity – the company always gives the same reason. As you are watching, he needs additional funds to programming its 302 million customers and continue investing in products. In this way, the standard monthly price of advertising Netflix increased from $ 7.99 to $ 17.99 Last 13 yearsInvolved An increase of $ 2.50 has just been announced During the company's recent income report. Of course there is still a monthly plan of $ 7.99, but it includes advertisements – and it is a dollar more expensive than a week ago.
But let's become real with each other. You want to know why Netflix Keeps increasing its pricesBecause it can happen. Because Netflix won. The rest of the streaming industry is competing fiercely with a limited pool of money, cairies are dealing with disputes due to the declining number of customers, and are nervous about the future of TV. Netflix Is The future of TV.
Especially over the last few years, Netflix has become practically unavoidable, virtually unattainable part of the mainstream culture from a solid streaming service. It has developed a list of hit origin – Strange things, Wednesday, Squid game, Night agent If we are really generous – then at least give it something to the HBO -style appointment TV. Through things such as Paul/Tyson fight and Tom Brady Rost, it has proved that it can produce more or less cultural programs than zero. It took out one day of NFL Games without any hindrance and spent billions of dollars to get WWE Monday night RawOne of the biggest hits of the cable on the platform. And below all this, it has created a huge library of reality shows, cooking competitions and other filler TVs that make most of our TV audience number.
Netflix has become a practically indispensable, not canceled part of the mainstream culture from a solid streaming service.
Now, for the price of your Netflix membership, you get a group of expensive films, high-end TV shows, sports and low-budget reality programs at one place. You don't want all this, but still you pay for it. My friends, it is called cable bundle. And it is still the best business designed by the entertainment industry.
The average price of basic cable subscription was between $ 40 and $ 50 in 2006, a year before Netflix started streaming content on the Internet. People used to watch TV about four hours a day, which means that they probably watched advertisements about an hour every day. Today, services Like YouTube TV And Cock's new game and news bundle There are $ 70 or more and only provide live programming. Meanwhile, Netflix Customer See two hours of service Every day, in all those categories, and the tenth of the price are paid as less. Many of them do not see any advertisement. Think about savings!
Netflix definitely sees it in this way. The company's co-CEO Greg Peters said This week's earnings call He is optimistic about Netflix's “long -term mudification opportunity”. “Currently we earn only 6 percent of revenue opportunities in countries and regions where we currently serve.” “And as long as we continue to improve the diversity, quality of our TV and film slate, we gradually expand the offer with new content types, we believe that we are able to increase that stake every year. Will be. “
Translation: Netflix is coming for your entire entertainment diet. And your entire entertainment budget.
As it looks at the increase in prices, Peters also said, considering signs such as Netflix engagement, retention and acquisition. All this is equal to a simple question: Do you continue to use Netflix even when the price increases? So far, the answer has almost always been yes. And so prices keep rising. This is really so simple. For Netflix it is clear that it can charge more fees – perhaps too much – and hardly anyone will leave it. So undoubtedly these boundaries are going to cross.
Another way to understand the nuances of pricing strategy is that Netflix wants an advertising plan for you. The company has repeatedly stated that it earns more money on a combination of small monthly fees and advertisements than alone. A large percentage of new customers is choosing an advertisement – about 55 percent in the latest quarter – and Netflix is starting to test how much his current customers will pay to keep their Netflix advertising. It is no coincidence that the advertisement-free value increased to two and a half times the basis of base value. And remember: Even if we switch to all advertising plans, the prices may increase. Cable TV is expensive And Finally, full of advertisements, and Netflix definitely prefers that business model.
Netflix really would like you to have that advertising scheme
Netflix is constantly indicating that his ambitions are also increasing. The company's other co-CEO Ted Sarandos indicated on this week's earnings call that after the success of Christmas NFL Games and Paul/Tyson fighting, the company is more open to live sports than before. The company is also rapidly entering video games, which is another big part of the entertainment budget of many people. Netflix has also started borrowing strategies from YouTube and tickets, so that creators like Ms. Rachel can be brought on stage.
Netflix co-founder and former CEO Reid Hastings said that Netflix's main competitive is sleep. Sleep is still a very powerful market power. And youtube remains even more impressive power in people watching videos. But Netflix is practically rising above all – even its direct competitors are now giving Netflix the license of their show because the audience is there and the culture is there.
Streaming wars are messing up, and they are certainly not finished, but Netflix has already won. The only question left is how rich the loot of victory will be. And it would be better if you believe Netflix is going to detect it.