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The fact that new releases cost $lots doesn't affect the viability of Netflix's operation, any more than the fact that a new car costs $20,000 affects the viabi
by archangel_one 15y ago
The fact that new releases cost $lots doesn't affect the viability of Netflix's operation, any more than the fact that a new car costs $20,000 affects the viability of selling it secondhand later on for $5,000. Any costs related to property, rent etc are not relevant, and the (much larger) licensing costs of movies are arbitrary figures set by the industry. They could set them pretty much wherever they want for Netflix and still make money since their marginal cost is pretty much zero. And while they may not want to do that, the alternative to customers paying $10/month for Netflix is probably not customers paying $100/month when most people know there are other alternatives.
- res0nat0r 15y agoNetflix had to raise prices eventually, I wonder if they will have to do it again in the future to stay in business. Their licencing fees went from ~200 million in 2010 to ~2 BILLION in 2012. They must raise prices somewhere along the line. $10 a month is a hell of a deal for all you can watch movies. This is the price of 2 trips to McDonalds. They have to charge more somewhere due to their skyrocketing license renegotiation costs the studios are charging. And they can charge this, because there is a demand for their content.