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My suspicion is that this has more to do with propping up their falling stock price, through increasing prices and profit though this is secondary to the stock

My suspicion is that this has more to do with propping up their falling stock price, through increasing prices and profit though this is secondary to the stock price. They've already maxed out their US and international subscriber base, they're likely running out of show ideas to bring in a new audience, and any subscriber base increase from here on is an uphill climb. So simplest way to increase revenue, profits and hence stock price? Increase monthly subscription fees and hope that those who stay and pay the higher prices make up for people who will jump ship. My guess is they have done this analysis already internally and determined that it's the right way to go for company finances. Just to summarize their financial situation: in 2020, they made $25 billion in revenue and $2.76 billion net income (slightly over 10% profit margin). Revenue grew 24% from 2019 to 2020 (I think likely subscriber count increase.) Their stock price high seems to be $691 in November 2021, and since then their stock price has fallen roughly 25% to mid or low $500s now.

GravitasFailure 5y ago
> they're likely running out of show ideas to bring in a new audience I keep hearing that they keep cancelling shows, which makes people more reluctant to engage with new shows, which makes them more likely to get cancelled, which makes...cue self fulfilling doom spiral. It'll be interesting to see if the price increase does increase profits or if it just chases off everyone that thought Netflix was barely worth it as is, and what that means for the streaming landscape overall.
- jelling 5y ago
  Someone in the industry told me that they don’t renew shows after a couple of years because they would have to pay more for them. Basically, they’re operating like a sports team that relies on rookie contacts to maintain profitability.
  - nickff 5y ago
    My understanding is that television staff unions all include jumps in pay after certain numbers of seasons. That, coupled with declining viewership after 3-4 seasons (most shows seem to peak in season two or three, means that the show gets more expensive per view.
    - londons_explore 5y ago
      They might be able to get around this if they could design a show that has a constantly rotating cast and crew, so that by season 4 they don't have any original people left.
      - EduardoBautista 5y ago
        The Crown changes the main characters’ actors every two seasons.
- jimmygrapes 5y ago
  I am nowhere near the type to complain too much about "woke" things but I certainly haven't seen many "originals" on Netflix that appeal to me in years. I don't need representation, I need interesting stories.
  - GravitasFailure 5y ago
    Heh, the really sad thing is that there are so many golden age sci fi stories that explore issues of race, sex, and gender, and could be adapted, or at least used as a template to start exploring with new material, but instead we get...Cowboy Bebop "fixing" Gren. It's frustrating.
    - nickff 5y ago
      Most of the golden age stories seem to explore one aspect of these issues, but don't prioritize 'representation'; Stranger in a Strange Land comes to mind. It's probably easier to just put a diverse cast into a bland story.
ksec 5y ago
I don't think it is just about increasing profits and revenue. They are still investing the same percentage if not more to make shows. And International market expansion, even ignoring China is far from finished. ( South Korea, Japan, Taiwan, India, SEA, ) It is about leaving money on the table and sucking out oxygen from competition. Disney should raise price as well. Probably to $9.99 per month once they have enough content or other bundling as they already do now with premier and ESPN+. In terms of household ( multiple devices ), that is $30 / month. Most people get Amazon Prime for the services of Amazon, not its content. So this leaves family to decide whether they want to subscribe to Hulu, Cables, HBO or AppleTV+. Both Netflix and Disney are well aware of Apple's play here.
- brutus1213 5y ago
  Disney raised prices in Canada recently. I came very close to canceling. The hike felt significant and not bundled with any increase in value. Netflix just announced a price increase in Canada. With Netflix, it is a bit stickier but previously, there were months we didn't watch it and I kept the subscription going. I might be paying more attention to these monthlies as they are starting to rack up.
WheelsAtLarge 5y ago
"My suspicion is that this has more to do with propping up their falling stock price, through increasing prices and profit though this is secondary to the stock price." Netflix has borrowed billions to finance their content. Debt that hasn't been fully factored into their monthly subscription prices. At some point they need to reduce their debt so they have to increase their monthlies to do that. Yes, it's about their stock price but it's mainly about making sure that they stay in business. I suspect that they will need to raise their prices even more. Also, expect commercials/ads to be introduced a little at a time in the future. It wouldn't surprise me to see an Ad system similar to the one that powers YouTube.
- indigodaddy 5y ago
  Who’s going to pay more than $20 a month for ads?
  - wiseleo 5y ago
    Comcast customers.

GravitasFailure 5y ago

> they're likely running out of show ideas to bring in a new audience I keep hearing that they keep cancelling shows, which makes people more reluctant to engage with new shows, which makes them more likely to get cancelled, which makes...cue self fulfilling doom spiral. It'll be interesting to see if the price increase does increase profits or if it just chases off everyone that thought Netflix was barely worth it as is, and what that means for the streaming landscape overall.

jelling 5y ago
Someone in the industry told me that they don’t renew shows after a couple of years because they would have to pay more for them. Basically, they’re operating like a sports team that relies on rookie contacts to maintain profitability.
- nickff 5y ago
  My understanding is that television staff unions all include jumps in pay after certain numbers of seasons. That, coupled with declining viewership after 3-4 seasons (most shows seem to peak in season two or three, means that the show gets more expensive per view.
  - londons_explore 5y ago
    They might be able to get around this if they could design a show that has a constantly rotating cast and crew, so that by season 4 they don't have any original people left.
    - EduardoBautista 5y ago
      The Crown changes the main characters’ actors every two seasons.
jimmygrapes 5y ago
I am nowhere near the type to complain too much about "woke" things but I certainly haven't seen many "originals" on Netflix that appeal to me in years. I don't need representation, I need interesting stories.
- GravitasFailure 5y ago
  Heh, the really sad thing is that there are so many golden age sci fi stories that explore issues of race, sex, and gender, and could be adapted, or at least used as a template to start exploring with new material, but instead we get...Cowboy Bebop "fixing" Gren. It's frustrating.
  - nickff 5y ago
    Most of the golden age stories seem to explore one aspect of these issues, but don't prioritize 'representation'; Stranger in a Strange Land comes to mind. It's probably easier to just put a diverse cast into a bland story.

ksec 5y ago

I don't think it is just about increasing profits and revenue. They are still investing the same percentage if not more to make shows. And International market expansion, even ignoring China is far from finished. ( South Korea, Japan, Taiwan, India, SEA, ) It is about leaving money on the table and sucking out oxygen from competition. Disney should raise price as well. Probably to $9.99 per month once they have enough content or other bundling as they already do now with premier and ESPN+. In terms of household ( multiple devices ), that is $30 / month. Most people get Amazon Prime for the services of Amazon, not its content. So this leaves family to decide whether they want to subscribe to Hulu, Cables, HBO or AppleTV+. Both Netflix and Disney are well aware of Apple's play here.

brutus1213 5y ago
Disney raised prices in Canada recently. I came very close to canceling. The hike felt significant and not bundled with any increase in value. Netflix just announced a price increase in Canada. With Netflix, it is a bit stickier but previously, there were months we didn't watch it and I kept the subscription going. I might be paying more attention to these monthlies as they are starting to rack up.

WheelsAtLarge 5y ago

"My suspicion is that this has more to do with propping up their falling stock price, through increasing prices and profit though this is secondary to the stock price." Netflix has borrowed billions to finance their content. Debt that hasn't been fully factored into their monthly subscription prices. At some point they need to reduce their debt so they have to increase their monthlies to do that. Yes, it's about their stock price but it's mainly about making sure that they stay in business. I suspect that they will need to raise their prices even more. Also, expect commercials/ads to be introduced a little at a time in the future. It wouldn't surprise me to see an Ad system similar to the one that powers YouTube.

indigodaddy 5y ago
Who’s going to pay more than $20 a month for ads?
- wiseleo 5y ago
  Comcast customers.