Watch HBO. Last year Netflix original programming produced more than the leading premium cable channels, according to figures from both companies.
FILE – Kevin Spacey in a scene from the original Netflix series “House of Cards”. Netflix has spent a lot of money on new programs and increase their hours of new programming that has already surpassed HBO and other cable channels.
Photo: David Giesbrecht / Netflix via AP, file / AP in Spanish
the leader in Internet video services also will lower the rate, even if it means putting at risk their customers by increasing their prices to help pay most exclusive and movies.
Since its efforts to have unique programs began in 2013 with the premiere of “House of Cards,” Netflix hit the gas. Last year opened 450 hours of original programming, compared to 401 of Time Warner’s HBO. This year both companies say they expect to launch about 600 hours of original material.
HBO, of course, is the channel that Netflix CEO Reed Hastings planned to emulate when its service began taking a different replays of past programs and movie premieres course. Ted Sarandos, program director of the company, told GQ in 2013 Netflix’s goal was “to become HBO HBO before we can become.”
Netflix has the goal of becoming a “completely different and superior league” rivals, said Tom Numan a exejecutivo television and film studios who teaches graduate theater, film and television at UCLA. In fact, he said, the company seeks to become the first global channel for original programs and movies.
Amazon.com, Hulu and other services are going through trouble to try to keep pace with its own original programming. Its original proposals are only a quarter the size of Netflix, though Amazon.com can boast that their programs earned more Emmys last year that his rival.
Netflix relies on its large catalog of original programming to help keep subscribers as it finds new competitors. Amazon, for example, began offering its streaming service for $ 9 a month, previously it was necessary to subscribe by Prime service $ 100 a year, which includes free delivery of your online store and other benefits.
Amazon is now cheaper than Netflix price of $ 10 a month for its most popular streaming plan, like Hulu that charges $ 8. HBO charges $ 15 a month for a streaming service launched last year to compete with Netflix.
Netflix will test the loyalty of their subscribers next month when prices increase 25%, after a two-year freeze that kept prices at $ 8 a month. The increase will affect 17 to 22 million subscribers, according to analyst estimates.
The original programming is not cheap. The company’s Los Gatos, California, ended last year with 10,900 million committed to pay for Internet streaming rights, almost double the 5,600 million end of 2012. Netflix has not disclosed how much of that money has been for original series and exclusive movies, but the percentage has been increasingly growing.
The cost of paying royalties and its expansion abroad has reduced profit margins Netflix. According to the results of its first quarter, disclosed late Monday, the company said it earned $ 28 million, or 6% per share, after revenue of nearly 2,000 million. But investors are more focused on the growth of subscribers.
So far the company has complied. Netflix added 6.74 million customers in the first quarter which increased its worldwide audience to 81.5 million subscribers, when before the first season of “House of Cards” was 33 million. These gains helped boost the price of the shares of Netflix, which has more than quadrupled since then, creating nearly 36,000 million to its shareholders.
But the share price fell more than 10% in afternoon trading Monday after the company predicted that only added 500,000 subscribers in the second quarter. The conservative forecast reflected the anticipated loss of some old subscribers by the price increase.
There is something to worry about. In 2011, Netflix subscribers abandoned when he separated his operation DVD mail-streaming its growing business, a change that increased the cost up to 60% for some subscribers.
Netflix lost 3% of its US subscribers at the time. A similar price increase next month reaction could cost between 510,000 to 660,000 subscribers in the second quarter.
The analysts believe it is unlikely to repeat the same situation.
“I do not think you see that many people retire and run out,” said an analyst at Rosenblatt Securities Martin Pyykkonen – especially since Netflix now has many programs that can not be found in other parts.
The original programming seems to be one of the main attractions for many subscribers. In a recent online survey conducted by Morgan Stanley to 2,500 American adults, 45% mentioned this factor as a reason to subscribe to Netflix.
Despite this HBO has a huge advantage over Netflix in terms of prestige. Last year, HBO earned 43 Emmy Awards, more than any other television channel, while Netflix original programs only won four, one less than Amazon.com.
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The journalist Ryan Nakashima Associated Press in Los Angeles contributed to this report.
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