2013年9月25日星期三

We Can't All Cut the Cord; Netflix Needs Cable

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You may have heard of this sentence: "Netflix (nasdaq stock code: head) is the future of TV" before.
Perhaps in some ways, it is. Give people the idea of what they want, when they want, but they want it, it has become more and more popular, the cable industry. We now have such things as TV, the ubiquitous service operators and watching conan online options, because I fell asleep, and in front of the TV last night. Our knife and Nevers and order for a cable service.
But Netflix Netflix service portfolio (or similar) to replace the idea of the current cable bundle is unreachable. For some, this may be a viable option. For others, it is not. But I and many other people, the company is more than an extension of the replacement of cables, it's more like a premium cable channels, you can get no subscription - order.
No cable, Netflix does not exist as it is today. Even if every 1 million households in the United States drop cable TV receiving and paying for Netflix, the company may not support all of these entertainment for $8 a month.
The current budget Netflix costs about $200 million, the content of each year.
The comparison, the amount of money to spend TV channels in the content, the 21st century fox company for $150 million, last year just its original content. Time warner cable networks. The cost of about $500 million, amount is to simple cable programming Netflix's budget.
And, more importantly, in the content of the Netflix costs soaring, in recent years due to increased competition, such as Amazon.com (NASDAQ: AMZN) and Hulu flow platform. Content, in fact, the price is more than the user growth need Netflix pick it be what kind of content.
Netflix still won an agreement,
But in the grand schemes of things, Netflix's content to get this cheap.
Remember a couple of paragraphs before, when I spend is pointed out that the main content of a couple? This is because they are paid for the first window exclusivity - is the only place, the right to a certain amount of time to go to the show.
Upon expiration of the window, the Netflix or amazon's negotiations to reach an agreement, pay a fraction of the price of the original network. Amazon, for example, recently paid more than $200 million, more than 4000 TV episodes, from viacom package.
Original content, on the contrary, the first window of exclusivity is significantly more expensive. Average television show cost between $2 million and $2 million ($50000 to pay per set earlier this year, amazon viacom). Some network licensing show from production studio, in this case, the network of deficit financing costs low, but the distribution rights to stay in the studio.
This is what Netflix, its original content. Place a bid with HBO and AMC network card license the house last year, $100 million and won the rights of the biggest the last two seasons. At present, the Netflix cost $1 million, a year and several one-off special permission to five or six of the original program. This amount is expected to significantly in the near term. Hulu climb to spend more on its original content. Last year, the website paid $50 billion to the original performance.
, by contrast, franchise, replay old movies is the original work of the license or buy much cheaper.
Now, take away the cables
Netflix, money is just the icing on the cake the content owners on the cake. They mostly money through the traditional pay TV. Take it, is there any way of Netflix can afford what they need.
For Netflix to capture the entire pay TV audience, it will be everything to everyone. This means that the pay all kinds of the first window contents. It will basically become a cable. As a result, it charge the price of the cable.
Monthly $8, 1 million users $1 million each year. Considering the TV is now a $14 billion dollar industry, we are looking for a price of more than 100 yuan a month cable, to replace the lost revenue.
To be sure, Netflix hardly no cable television users, its content affordable cost of subsidies. This, of course, will not be able to take as the house card or arrested development make spend a large amount of risk. It may not be able to support the breadth of the entertainment of cables. It is not worth a cutting line service.
So, if Netflix cable industry is a threat, it is also a threat to itself.

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