Going off on a tangent about Netflix's "woes" I think there are a couple of things worth considering:
- While password sharing isn't a new thing, I think that what Netflix has come to realise is that once you top-out in a territory, as it basically has in the US, then to continue to grow the market, you'll have to start being tougher on password sharing. You can convert at least some of those people to a paid tier. How they go about that will be interesting, but it's inevitable. Other subscription services have done the same before. The only other place they can really go to is advertising, although that's not easy for them to do. They'll have to rework nearly all their programming to encompass it. In this forum we all know that TV designed for ads has to have an act structure that leaves cliffhangers at ad-interval points and so on. Shoe-horning those breaks in won't be easy. (Although I'd note that nearly everything from HBO that was also designed to be ad-free gets ads in the UK when it airs on Sky Atlantic including first-run Game of Thrones on day of release or whatever. It's do-able). They'll also have to get a sales team in place. - Most of Netflix's continued growth is going to be international, and that means they have to keep investing in localised regional programming around the world. Sure there are a few breakout hits that work everywhere - Squid Games, Stranger Things, The Crown - but if you want to make an impact in India or Poland or South Korea, you have to commission locally. That's going to keep pushing their costs. - Netflix and others are bound to start locking people into longer contracts. The month-to-month model must hurt them. I guess the way to do this is put the price up for monthly subscribers but lock people in on "cheaper" plans if they pay for annual deals. The other part of this is less dropping entire seasons in one go. Like many others, they miss out on so much buzz that can be created when a show goes weekly. While I don't think they need to go entirely one way or another, I think week by week can make sense for things that will have people talking online, and perhaps the weekend binge model works for other event series. This also lets them produce slightly fewer shows. I'm still smarting that a decent show like Archive '81 got cancelled probably in large part because it went totally unnoticed in tsunami of series that keep dropping all the time on the platform. Getting back to the original theme of this thread, on this side of the pond there was a report (from a proper research company, Kantar) about how the number of UK households that have a subscription streaming service fell last quarter overall. The report claims that this is a cost of living effect. https://www.kantar.com/inspiration/inflation/cost-of-living-crisis-bites-uk-streaming-market-shrinks With fuel prices skyrocketing here in the UK leading to utilities costs close to doubling (not helped by the war in Ukraine and a general European reliance on Russian gas which inflates those prices even for a country like the UK that doesn't use Russian gas), as well as food costs going up, households are looking to cut costs, and streamers are one of the places they go. Adam On Wed, Apr 20, 2022 at 8:54 PM PGage <[email protected]> wrote: > As I noted, comparing pricing is complex, as there are several options. I > decided a priori to use the lowest non-ad tier price for each service. > > Once you get into ad supported services (partial or full) I think you are > talking about something substantially different from what has become the > standard Netflix model streaming service (even as Netflix itself begins to > move away from that model). I think non ad streaming is what most people > still have in mind when they complain that streaming services are too > expensive, or not worth the price. As I noted, ad supported services are > either free, or significantly cheaper than what the Fandom survey estimated > its members thought it was worth. No doubt, ad supported streaming is where > most of the growth will be in near future. > > Regarding Tom’s post, while the price at which consumers decline to pay > may be what an economist would define as the best definition of what > something is worth, there is no easily available list of those prices to > use for analysis (though I guess some economists would say the actual Price > at any given time is the best estimate of what customers will pay, and > that’s what the service is worth. > > While, as I did point out, the fandom poll is of limited value given its > non-representative sample, I don’t think it’s worthless. As a highly > motivated sample they probably will pay more for streaming services than > the average American, but as I say I think the value of the poll lies more > in its ranking of the streaming services then it’s estimate of the true > cost. > > Whether a streaming service is “worth it“ or not depends less on what a > bunch of 20- something stoners living in their parents basement think then > on multiple individual variables, but I think the fandom numbers offer as > good a starting place for that kind of analysis says anything, unless we > can find a better survey from a more representative sample out there > somewhere. > > On Wed, 20 Apr 2022 at 11:45 AM Ben Combee <[email protected]> wrote: > >> That analysis has the wrong pricing for Netflix, in my opinion. The >> $9.99 price is for the basic plan which isn't HD and only allows one >> screen. I'd expect lots of subs are for the standard ($15.49) or >> premium ($19.99) plans that allow higher resolutions and more streams >> at one time. It also misses that many streamers have ad-supported >> plans for lower cost, including Hulu, Peacock, and Paramount+. When I >> last heard numbers from Hulu, about 70% of their subs were >> ad-supported ( >> https://variety.com/2019/digital/news/hulu-ad-supported-subscribers-70-percent-1203227954/ >> ). >> I bet a lot of users now are on the D+/Hulu/ESPN+ bundle too which has >> the ad-supported Hulu as default. >> >> On Wed, Apr 20, 2022 at 12:43 PM Tom Wolper <[email protected]> wrote: >> > >> > The Variety article is a recap of a Fandom press release with no >> critical eye or assessment of if the Fandom numbers mean anything. The >> survey is self selecting and the data gathered respond to one small group >> who are already committed to streaming TV and not the general population. >> Asking people for an opinion of a fair price can be meaningless. There is a >> true metric for finding out what people will pay for a streaming platform >> which is how many quit when the price goes up. Using the survey to give >> solid advice to streamers is like going to financial traders after closing >> time and asking why the market went up or down 20 points and what investors >> should do. >> > >> > Netflix is having trouble because they were first out of the gate and >> they had a huge library of old movies and TV shows. They added prestige >> movies and series. Now competitors have sprung up who took the rights to >> the libraries and turn out their own prestige series and series. Netflix >> has to find a different way to keep growing. >> > >> > On Wed, Apr 20, 2022 at 9:45 AM PGage <[email protected]> wrote: >> >> >> >> So I did a bit of a deep dive into this (though may have hit my head >> on a few rocks). I don’t think the main take-a-way from the survey is that >> streaming is overpriced (in fact, of the 8 premium streamers considered, >> three are viewed as actually underpriced). >> >> >> >> >> >> One thing to keep in mind is the survey is done by Fandom, and the >> population is their members, not the US at large. I am not that familiar >> with Fandom, but from what I gather it caters to kind of super and online >> fans of consumer entertainment. I suspect they skew younger than the US >> population as a whole >> >> >> >> >> >> Fandom seems to think the main take away is that the most important >> characteristic for streamers is “genre” – that consumers sign up for >> specific programs initially, but stay because they will find additional and >> consistent content in the genre that first attracted them. They argue that >> churn is most likely when new subscribers don’t know what to watch next on >> the service, and rather than search for new content, they unsubscribe and >> maybe go elsewhere. >> >> >> >> >> >> This seems unlikely to me, mostly because it runs counter to what we >> know happened with cable TV, where narrowcasting, genre based programming >> inevitably gave way to more broadbanded, less predictable programming. The >> Fandom analysis will inevitably favor Disney+, which offers clear genre >> based programming; if you signed up to watch Black Widow, or Encanto, or >> Solo, you are very likely to find other programming on the service that you >> will also be interested in. But, if you are not a child, adolescent or >> young adult, this may not be very important to you. I find so far I have >> probably saved money with my Disney+ subscription compared to the cost of >> going to a theater to see current and archival Marvel and Star Wars films >> just to be able to discuss with my young adult children. >> >> >> >> >> >> I find the survey most helpful as an indicator of which streamers are >> seen as most desirable or worthy. The average US home has about 4.5 >> streaming services, but the fastest growing services are the “Free >> Ad-supported Streaming TV (FAST) services (like TUBI or IMDTV, or whatever >> that is called now). I could not find a good source on the average number >> of premium services a US household subscribes to (and there are more than >> just the big 8 discussed in this survey), but lets say that households that >> subscribe to any premium service at all average 3. Kevin reports his 3 are >> Paramount, Disney and Apple+. In the survey, the top three ranked streamers >> clearly are: Netflix, HBO-M and Disney+. If I had to limit myself to 3 it >> would probably be Netflix, HBO-M and Apple+ (I would miss Amazon the most >> of the rest, but could pay a la carte for most of what I wanted). The list >> below is in order of how much Fandom members thought each service was >> worth, and also includes the actual cost, and the percent above or below >> the estimated worth each service is. Note that the actual cost is >> complicated by the offering of multiple tiers – in each case I intended to >> use the cheapest ad-free option. In most cases, the with ad option is >> significantly below what the survey valued the service at, which makes me >> think they were not targeting FAST versions. >> >> >> >> >> >> Worth >> >> >> >> Worth Cost % >> >> >> >> Netflix: 10.60 9.99 -06 >> >> >> >> HBO-M 9.30 14.99 +61 >> >> >> >> Disney+ 9.20 7.99 -13 >> >> >> >> Hulu 8.60 12.99 +51 >> >> >> >> Amazon 6.90 8.99 +30 >> >> >> >> Apple+ 6.80 4.99 -27 >> >> >> >> Paramount+ 6.80 9.99 +47 >> >> >> >> Peacock 5.50 9.99 +81 >> >> >> >> >> >> This list can also be sorted by the best and worst bargains; below I >> list the three best and three worst values, defined as the percent below or >> above the price the survey judged each service to be worth the actual cost >> was: >> >> >> >> >> >> Best Value >> >> >> >> Apple+ 6.80 4.99 -27 >> >> >> >> Disney+ 9.20 7.99 -13 >> >> >> >> Netflix: 10.60 9.99 -06 >> >> >> >> >> >> Worst Value >> >> >> >> Peacock 5.50 9.99 +81 >> >> >> >> HBO-M 9.30 14.99 +61 >> >> >> >> Hulu 8.60 12.99 +51 >> >> >> >> >> >> Two associated points, not included in the survey or Variety’s article >> about it. >> >> >> >> >> >> Netflix’s stock price took a huge dive yesterday after the market >> closed (at one point at least 25%), this on the heels of reporting that not >> only did they fail to meet even the low end of their estimated new >> subscribers, but they actually lost subscribers for the first time in years >> (though the loss was due to cutting services in Russia). See: >> https://www.cnn.com/2022/04/20/investing/premarket-stocks-trading/index.html >> >> >> >> >> >> Netflix spun this in part as being due to password sharing, which kind >> of pissed me off, as it seems unlikely that practice suddenly and >> dramatically spiked in the first quarter of this year; this seems more like >> their way of justifying coming practices to curtail password sharing. >> Clearly the real reason for the dip (and Netflix is preparing investors to >> expect a lost of 2 million subscribers in the second quarter) is mostly >> due to the increased streaming competition. Netflix may be viewed as the >> most important and best valued streaming service, but it is no longer a >> necessary service for many, and is now subject to the same Churn forces as >> everyone else. It does seem obvious that there are more streaming services >> than the market can really bare (here include what I think of as Ad-ons >> like Acorn, Epix, AMC+, Brit Box, PBS, Masterpiece, etc.). I don’t expect >> Netflix to go bankrupt, but I do expect over the next 2-3 years to see some >> significant reduction in premium streaming services, either by merging, or >> the acquisition of content libraries. >> >> >> >> >> >> As noted above, FAST services seem to be the wave of the future. In >> his explanatory note to investors, Hastings announced that he has begun to >> re-think his famous, long standing opposition to ads on Netflix. He did not >> exactly announce an ad-supported tier, but made clear that we can expect >> one over the next year or two. Peacock, justifiably rated as the least >> valuable of the big 8, still reports big growth in its ad-supported tier. I >> did not search for relative growth in ad-supported tiers at other >> providers, but suspect the same is true there. Ad support on premium >> services is not exactly a FAST service, more of a hybrid, but for a service >> with an elastic demand curve, ad-supported tiers is a way to keep the cost >> in a tolerable range. I am in the group that Hastings referred to as being >> advertising intolerant. I despise being made to watch commercials on a >> service I am already paying a monthly subscription fee to watch. I much >> prefer watching TUBI or IMDTV with ads (which I do on occasion) than >> watching ads on Peacock. They would have to make Netflix or HBO almost free >> for me to pay them and sit through commercials. But I am older, with a >> little more income, and no young children at home. I expect not only more >> ad-supported tiers on premium services, but being asked to pay a higher >> premium to avoid ads in the near future. On Netflix it may not be so much >> that the ad tier is a discount, but a way to avoid paying future price >> increases. >> >> >> >> >> >> On Tue, 19 Apr 2022 at 7:44 PM Kevin M. <[email protected]> >> wrote: >> >>> >> >>> I’ve said before, I feel I’m getting my money’s worth with Paramount, >> Disney, and Apple, but there’s not much of a draw to me for Netflix, >> Amazon, HBO, or Showtime. >> >>> >> >>> On Tue, Apr 19, 2022 at 1:47 PM 'Bob Jersey' via TVorNotTV < >> [email protected]> wrote: >> >>>> >> >>>> The Fandom official in charge of it told V that once people plunk >> down the funds, they "really feel that they don’t know what’s coming. They >> feel overwhelmed. They don’t feel that the platforms do a great job of >> telling them.” >> >>>> >> >>>> >> https://variety.com/2022/tv/news/netflix-disney-plus-hbo-max-prices-streaming-study-1235226885/ >> (link) >> >>>> >> >>>> >> >>>> B >> >>>> >> >>>> -- >> >>>> You received this message because you are subscribed to the Google >> Groups "TVorNotTV" group. >> >>>> To unsubscribe from this group and stop receiving emails from it, >> send an email to [email protected]. >> >>>> To view this discussion on the web visit >> https://groups.google.com/d/msgid/tvornottv/06154ea3-cce7-43de-919e-9a103c9b0861n%40googlegroups.com >> . >> >>> >> >>> -- >> >>> Kevin M. 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