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Comment by seem_2211 | Hacker News Reader

Completely disagree. Having to make a purchase decision is stressful and a cognitive nuisance. I'd much rather pay $10 a month for Netflix and not think about it, than $.20 to watch an episode.

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I fret much more over subscription purchases than one time purchases. They can be annoying to cancel, they can be forgotten, and they can be heavily underutilized. In fact I think these attributes are a cornerstone of the business plan.

I'd love to know what the demographics of this split are. I feel precisely the same way, but the success of e.g. microtransaction games suggests that it's not a universal view. Whereas for me, microtransaction games are worth either 0 or 1 transaction and then I never even contemplate further payments.

(Hating small purchase decisions might be a common view, since microtransactions are all about long-tail profit exceeding a normal purchase price. But I'm still curious what the demography looks like.)

Netflix would prefer you do this, too. In subscription models, you are almost guaranteed to be paying more than you're using. Only when a service is first starting and trying to attract subscribers is it likely you are paying less than you use.

Netflix mainly has fixed costs from licenses. The marginal cost of delivering another video to a subscriber is negligible. They want you to keep watching and stay engaged.

How do you measure the value or cost of how much someone uses for s product like Netflix? Compared to equivalent iTunes purchases, a Netflix subscription is inexpensive. If you are referring to the bandwidth, the cost is close to zero anywhere.

No, I'm not talking about bandwidth. iTunes isn't generally selling one-time access, but perpetual ownership (kinda) of a single episode. This accounts for the outlandish $2 per episode sort of thing.

A non-subscription model for a Netflix service would be closer to fractions of a penny per view.

Fractions of a penny per viewing can only refer to bandwidth costs; it's 1-2 orders of magnitude too small to cover the costs of producing or licensing a show, let alone Netflix' other fixed operating costs.

Everything Netflix talks about is getting users to spend more time watching shows, not less. They certainly want subscriptions because they make more money, but they do it by aggregating a ton of content into one subscription and providing it at effectively no variable delivery cost. The result is that users pay less per hour watched than can be provided by anyone a la carte.

I don't follow your reasoning. Whatever the delivery costs may be, they don't determine the service cost. That's determined by value to the customer (though delivery costs sets the minimal viable service cost).

Their adherence to a subscription modivates the view of getting users on the platform for as long as possible, regardless of what they're watching. A pay per view model would twist motivations another way.

Yes, that is my original point I wanted to make in disagreement with you. Netflix does not make more money off a subscription because of underuse, they make money because of, if anything, overuse which is possible because the value to the watcher (some number below the a la carte rental price of $2-5 set by competitors) greatly exceeds the variable cost of providing the view of the show (nearly $0.)

What happens when Netflix no longer carries your favourite show, and now you're paying $X for a service you use less and less?

You eventually quit. That's only one purchase decision compared to many. Even if you evaluate the decision every time a show you like gets pulled, that's still less financial decision making than paying per piece of content.

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