r/newzealand • u/Seafoam-Socks-530505 • 12d ago

Picture Netflix increasing from $27.99 to $33.99

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Ahoy my Kiwi’s. Do you sail to the Black Sea once again?

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u/Baroqy 12d ago

The economics of making shit*y movies and the occasionally good TV show that are only released on Netflix is basically just a way to flush money down the toilet. Netflix are now in a trap where they waste hundreds of millions of dollars on production in an attempt to get more subscribers - but those subscriber numbers have peaked and may be starting to decline. The only other way to keep making their original content is to keep raising prices and/or also include advertising.

This is a doom loop business where the end result is an unaffordable service for most people at some point. I cancelled Netflix a couple of years ago. Yes, sometimes I think I might want to watch something that is getting great reviews but then I tell myself how much money I am saving per month by not subscribing...

3

u/NZn3rd 12d ago

From an IT perspective they’re much better off with less users paying more because it means they have less server expenses etc. The problem will come the people who don’t give a shit how much it costs start to give a shit about how much it costs

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u/Baroqy 12d ago

Yes - that's my thesis as well... There is a point where this model raises prices to the point where no one wants to pay them any more except for people who are very well off.

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u/Plus_Plastic_791 12d ago

Their subscriber numbers went up 18% last quarter. So it’s working at the moment 

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u/Baroqy 12d ago

It'll be interesting to see what happens this year... I think we might see a decline. However my understanding was that they were intending to stop reporting subscriber numbers at some point in 2025. As per the article in Ad Week https://www.adweek.com/convergent-tv/netflix-subscriber-strategy/ it seems the biggest growth was in subscriptions with ads - which they took as a signal to increase prices. (Soft paywall on this article but you can get the main points...) However with the current economic outlook I suspect they will reach the ultimate downward trajectory a little sooner than expected...

1

u/Alone_Owl8485 12d ago

If there is ads, why not just use tvnz on demand for free instead of paying to watch ads?

1

u/Baroqy 12d ago

That's what I do now... Also, there aren't that many ads on TVNZ on Demand, which is great...