As @johnpowell mentioned above, CNN Money recently reported:
“Netflix’s streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012.”
That’s a huge order of magnitude jump! And it’s especially eye-catching when you compare it to Netflix’s 2010 fiscal year total revenue at just $2.2B.
Now, the article doesn’t really explain what goes into those numbers. For one thing, Netflix is steadily increasing the number of streaming users and those users are viewing more and more streaming content. So, it’s not just the rate price in there, but also the volume of content Netflix is serving up.
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I don’t like paying substantially more for the same service I already enjoy. But in this case, it really seems like Netflix is just the messenger. They simply tack their overhead on top of the price of the content that the studios are charging.
And like any good unscrupulous drug dealer, it seems the movie industry has figured out how to hook us with a (nearly) free taste of their best drug, and now that we’re hooked, they’re ratcheting up the price mercilessly.