Hexbyte  Tech News  Wired Netflix Raises Prices to Stockpile for the Streaming Wars

Hexbyte Tech News Wired Netflix Raises Prices to Stockpile for the Streaming Wars

Hexbyte Tech News Wired

Hexbyte  Tech News  Wired

Netflix CEO Reed Hastings is facing a growing collection of competitors, from Amazon to Disney.

Sylvain Lefevre/Getty Images

On Tuesday, Netflix announced that it would raise prices across all of its plans in the US. For most people, that means their $11 monthly rate will hop to $13 over the next few months. New customers will pay the higher price starting today. No one likes a price hike, especially given that Netflix had just bumped its most popular subscription’s cost in 2017. But this round’s timing seems especially inauspicious given the flood of streaming competition—from Apple, Disney, WarnerMedia, NBC, and more—that lies just ahead. Or maybe that’s the point.

“On the surface, it does seem to be a bit of jeopardy to increase prices when the competitive services are coming,” says Tony Gunnarsson, a senior analyst at Ovum focused on the streaming media business. Take the Disney+ streaming service, due to arrive later this year. Not only will it yank all of the Marvel, Star Wars, and other Disney-owned content off of Netflix, but the Mouse House has also telegraphed that it’ll cost less. Widening that gap by two more dollars seems contrary to Netflix’s own interests, especially when you add in all the other heavy hitters in media gearing up for subscriptions of their own.

But you don’t have to look very far below the surface to see how Netflix’s move actually makes sense. Remember that the company has 58 million US subscribers; that’s about half of all TV households in the US. For many of them, it has become as indispensable as a cable subscription once was.

“The key thing with Netflix is that they have become a must-have, essential service,” says Gunnarsson. For consumers, it’s the first streaming service you subscribe to and then you add others after that.”

Recent history has borne that out. Over the dozen years that Netflix has offered streaming, it has raised prices four times, including Tuesday. The previous attempts resulted in negligible churn, the industry term for people quitting their accounts. Surely a ceiling exists somewhere for Netflix prices, but $13 seems an unlikely place for it. After all, that’s still a couple of bucks cheaper than HBO.

“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” the company said in a statement.

Your Netflix rate increase will subsidize lower subscription costs in developing markets.

And while Netflix this year will face down a more competitive landscape than it ever has, it’s important to maintain some perspective about just how big a threat all those new services pose, at least in the near term. Other than Amazon, no streaming service has come anywhere close to Netflix’s reach. It’s not just playing from a lead; almost no one else is even in the same stadium. Which is to say, the point at which a significant number of US consumers will be thinking hard about whether to put their dollars toward Netflix or Disney+—to whatever extent it’s one or the other—remains years away.

In the meantime? Netflix will continue funneling that subscription revenue into original content. Shooting Bird Box incurred “qualified expenditures” (which doesn’t include huge swaths of budget like cast and director fees) in the ballpark of $20 million. Netflix spent a reported $90 million on 2017’s Bright, its first tentpole blockbuster. And recent estimates have pegged the company’s overall 2018 original content budget at $13 billion. Investing heavily in its own shows and movies has undeniable benefits; Netflix doesn’t have to navigate international licensing thickets to show them around the world, and they’ll all remain on the service indefinitely. Most of all, its streaming catalog already dwarfs what Apple or even Disney and TimeWarner will be able to offer at launch, both in scale and variety. The more money Netflix takes in, the more it can provide something for everyone, attracting new subscribers, who add more revenue, which becomes more shows, and on and on.

That said, it’s unlikely that all of the price increase will go directly toward Bright 2 and its ilk. In the process of expanding its streaming empire, Netflix has run up $8.3 billion in long-term debt. Extracting an extra two dollars each month from 58 million subscribers won’t make that go away, but it helps.

More importantly, though, even in areas of the world where Netflix’s footprint is smaller than in the US and Europe, the service remains extremely price-competitive. In Malaysia, for instance, it’s testing a mobile-only plan that clocks in at about $4 per month. The dominant streaming force in India—whose 1.3 billion citizens are increasingly online—is a company called Hotstar. Its most expensive plan costs $3 per month.

“They are underway with a huge international expansion plan. We’re talking about markets like India, Southeast Asia, Africa, where Netflix as it stands today is unlikely to be able to replicate the success they’ve had in the Americas and Europe,” says Gunnarsson. “It makes sense to slightly nudge up the subscription charge in mature markets to withstand lower prices that are a must in those developing markets.”

Your Netflix rate increase, in other words, will subsidize lower subscription costs in developing markets, where the company has some serious catching up to do.

How much further Netflix will go with its price bumps will likely depend on how quickly the competition ramps up. But if you’re already starting to feel the strain, and anxious about how the streaming wars will affect your wallet, take at least some comfort that not every option is getting more expensive. In fact, more and more of them are free.


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Hexbyte  Hacker News  Computers Netlify raises $30M to replace webservers with a global ‘Application Delivery Network’ | Netlify

Hexbyte Hacker News Computers Netlify raises $30M to replace webservers with a global ‘Application Delivery Network’ | Netlify

Hexbyte Hacker News Computers

SAN FRANCISCO, California, October 9, 2018 ー The workflows and technologies required for modern web development are undergoing dramatic reinvention. Netlify, a San Francisco based company serving a large base of passionate web developers, has seen the transformation first hand. They’ve engineered a new platform for the web where content and applications are created directly on a global network, bypassing the need to ever setup or manage servers.

Today, Netlify announced they have raised an additional $30m led by Kleiner Perkins’ Mamoon Hamid with Andreessen Horowitz and the founders of Slack, Yelp, GitHub and Figma participating.

“We’ve wanted to dump webservers for a while, but the tooling was missing. Netlify now gives us instant global delivery, with no infrastructure required.” said Vitaly Friedman, founder and owner of Smashing Magazine and Smashing Conf. “As content gets updated, it’s automatically built by Netlify’s bots before being deployed worldwide to every major cloud provider. For us, Netlify replaced the need for a CDN, a lot of servers, a lot of management headache, and a lot of duct tape.”

Pre-building and distributing apps ahead of time is the core concept behind the JAMstack, a modern approach to web applications. It’s an idea borrowed from mobile development that’s catching on with the web developer community. “Running any web property without origin servers is an arresting concept, but the clear future of the web platform,” adds GitHub founder Tom Preston-Werner. “In less than five years, you’ll build your next complex web application this way.”

To pull off the new architecture, Netlify needed to give developers a git-centric workflow, something that supports the move away from server applications towards APIs and microservices. Netlify’s Application Delivery Network removes the last remaining dependency on origin infrastructure, allowing companies to host the entire application globally.

“It’s an ambitious goal,” said Kleiner Perkins’ Mamoon Hamid, commenting on their investment in Netlify. “In a sense, they are completely rethinking how the modern web works. But the response to what they are doing has been overwhelming. Most of the top projects in this developer space have already migrated their sites: React, Vue, Gatsby, Docker, and Kubernetes are all Netlify powered. The early traction really shows they hit a nerve with the developer community.”

Netlify believes all sites on the internet will be powered by application delivery networks as the technology advances.

“The cloud made it faster, easier, and cheaper to provision servers, vms, and containers.” said Mathias Biilmann, Netlify Founder and CEO. “But more devices always bring more complications. Customers have come to us with AWS environments that have dozens or even hundreds of them for a single application. Our goal is to remove the requirement for those servers completely. We’re not trying to make managing infrastructure easy. We want to make it totally unnecessary.”

“This is where the web is going,” commented Chris Coyier, CSS expert and co-founder of Codepen. “Netlify is just bringing it to us all a lot faster. With all the innovation in the space, this is an exciting time to be a developer.”

JAMstack

If you want to know more about JAMstack check out the San Francisco conference October 29-30 and meet a bunch of the people behind Netlify.

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Hexbyte  Tech News  Wired MoviePass Raises Prices, Limits First-Run Availability as Pressures Mount

Hexbyte Tech News Wired MoviePass Raises Prices, Limits First-Run Availability as Pressures Mount

Hexbyte Tech News Wired

When MoviePass launched its $10 unlimited movie ticketing service nearly a year ago, it seemed too good to be true. Consider that hunch confirmed. After months of setting great big piles of money on fire to maintain operations, the company is raising prices by 50 percent, limiting access to high-demand showings, and clamping down even further on suspected fraud.

The company’s crash landing back to earth shouldn’t come entirely as a surprise; after all, just a few days ago it literally ran out of money, requiring an emergency $5 million cash infusion to resume services. MoviePass says its moves to increase revenue and reduce costs have already cut cash burn by 60 percent. It’s unclear whether even that much will keep it afloat.

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