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Comment by forrestthewoods | Hacker News Reader

It's perfectly reasonable if that legitimate and convenient method isn't a sustainable business model. Tragically $10 a month for every movie and TV show ever isn't viable. It is in Starz' interest to focus on acquiring expensive premium cable subscriptions rather than collecting a small portion of the Netflix $10 monthly subscription.

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Tragically $10 a month for every movie and TV show ever isn't viable.

Then they'd better make it viable really quick because that seems to be about the price point that the market has decided on.

I also don't see why it wouldn't be viable as long as you distribute it to the content that's actually being watched.

Lots of people pay $50-$100/month for cable/satellite. I don't.. and I don't understand the value, and you might not either, but a huge amount of the population does.

It's not really that simple when you account for the "triple play" style packages. People are getting their internet, phone, and TV all together for around $100/month. People don't really understand what portion of their bill goes to each of those services, but they view all three of them as critical (with phone service rapidly becoming provided by cell phones). There is pretty well understood psychological effects of bundle pricing.

When you break out just movies, $10/mo might be what people actually want to pay. I suspect the actual right price point for the mass populous is somewhere > $10 and < $50... but Netflix has to live in a world where people already have TV, thanks to aggressive bundle pushing strategies from cable companies. At $10/mo, Netflix is priced the same as Stars & friends: like "channel packs".

Live events. That's the value of that subscription. It's why ESPN can charge nearly 4x what other channels charge providers. Almost the entirety of my value from television I derive is from watching sports. If I can watch 20 hockey games in a month for the price of actually going to one live, then that's worth it to me. If I can watch my alma mater play some hockey, then that's worth the substitution of buying an expensive plane ticket, getting a hotel, and watching them play (I live about 2000 miles from the good ol' alma mater).

I think for this reason, you'll never see that expense go away and TV will remain fairly ubiquitous.

Why has it always got to be this direction though? Next time you watch a film try tracking the wastage, the unnecessary cuts, the plethora of extras, the ridiculous quantity of explosions and/or CGI.

IMO the future is about more films with lower budgets. At present the amount of money that film studios piss away with their bloated budgets is utterly unsustainable.

Not really. The movies which have racked in the most money of all time all cost 200 million+ to make. http://www.the-numbers.com/movies/records/

The public loves and wants big budget expensive movies.

How much of the 200 million+ is marketing?

Even some celebrity actors are marketing.

Does that really matter? The total cost being 200 million plus of every flick on that list shows that big huge expensive movies, marketing, actors included, still are super popular.

It's contributing to the popularity, and there's a belief that hollywood is 90% marketing, 10% fluff. I'm just curious if you knew how much was marketing.

Reported budgets for movies do not include marketing, as such costs are highly variable.

Thus, those $200 million budgets are the budgets for making the movie, with additional outlay for marketing the movie.

They better get used to $10/month vs $0 when consumers go to The Pirate Bay instead.

A smarter move would be to offer their own streaming service, or even a download store.

Agreed. I'm not sure why this doesn't happen. Maybe because the royalties and such get more and more complex with that sort of system? Can anyone shed some light on this?

> Tragically $10 a month for every movie and TV show ever isn't viable.

Why not?

Further, can you explain that in terms an avid Netflix customer can understand?

Why do you think 10$ for all you can eat movie watching via Netflix is sustainable, when new releases at the theater cost $7-12 PER movie? Unfortunately the industry set the price this low and now it is expected to be that cheap. Since the price is going to inevitably go up, or Netflix will just lose more content, the public is going to have to deal with the increase, or the people who don't want to pony up will just have to cancel their service.

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.

Netflix 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.

A movie at the theater and a movie in your living room are two different products.

A true comparison isn't really possible. The closest would be a premium movie channel; HBO, Showtime, Starz. Those cost more than Netflix and have a much smaller selection of titles.

How about that only one or two On Demand movies from Comcast cost as much as a month of all you can watch Netflix?

Because the market size is currently bigger than that [[ keep reading, I am wrong ]]. Lets take 900 million people in the western world (rich like us) x $10 x 12 months ~ 100 billion for movies and tv (independent of ad revenue, etc). This is the upper bound of course, then there is the middle 2 billion people who can watch but have more limited means (no streaming, other formats, etc). So yes, $10 is a perfectly viable number. They just don't want it to be.

Still $10 a is in the order of magnitude. Some will pay zero, some will pay 20 - 30 (netflix,itunes,amazon,etc).

People still have cable?

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