Will Netflix Originals Pay Off?

Jan 31 2013 @ 8:54am

Andrew Wallenstein sees a problem with the company’s plan to release the full seasons of Arrested Development and House Of Cards all at once:

A relationship with a program that might otherwise drag out over months on a linear channel is telescoped into hours. And therein lies the paradox inherent in Netflix’s business model: Allowing consumers to consume at their own speed contradicts the company’s financial imperative to keep them on the service paying the seductively cheap flat monthly fee of $8 for as many months as possible.

He notes that, if “the 13 episodes of “Cards” were parceled out in the traditional weekly, installments, you could hook a viewer to pay for at least three months instead of just one.” Alyssa suspects that Netflix will eventually have to raise prices to stay afloat.