Overnight, Netflix shares fell 7% in premarket trading following their Q3 earnings report. Although revenues are up 12% year on year, their growth has slowed, and there have been concerns about programming, with Netflix replacing both Chief Content Officer Bela Bajaria and removing their Head of Film Dan Lin.
So it was amusing that at that precise moment, when I fired up the Netflix app last night I was presented with an occassional screen suggesting that I might like to upgrade to 4K.
I used to have 4K, but Netflix priced me out if it. Netflix has three tiers:
- Standard with ads (1080p – 1 device) – £7.99
- Standard Ad-free (1080p – 2 devices) – £13.99
- Premium (4K HDR – 4 devices) – £20.99
Back in 2023 when I last wrote about this, Netflix was raising the Premium package from £15.99 to £17.99. Today it’s £20.99. I have zero incentive to upgrade when I only need one device at a time.
When Netflix pops a picture on the screen to persuade me of the difference they show a still from Stranger Things that slightly disingenuously shows a slightly pixilated still on the left side of the screen with a crisp image on the right. Except that Stranger Things doesn’t look that bad to me! Or, more to the point, the mountain-set documentary I was watching last night.
I have a 55″ TV and I sit about 2-3m away from it. I just can’t see the difference. I can with 4K Blu Rays, but streaming compresses 4K images quite a bit, and the difference really isn’t there without a massive screen that you sit quite close to.
In any case, the problem for Netflix is that with each tier, they believe that there are more people using more devices. But what about one or two-person homes who would like 4K? There’s not really an offering there.
Netflix needs to grow its ARPU – the average revenue per user. And one way would be to get me to upgrade. But they don’t offer me a compelling offering!
Image at the top is of an Nvidia Shield remote control. I did actually finally retire my Nvidia Shield and replaced it with a Google TV Streamer this year. That said, the Nvidia Shield is still running my Plex server! An incredible streaming device.