Netflix Hikes Content Budget on New Customer Prices

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April 22 (Bloomberg) -- Bloomberg’s Jon Erlichman reports on Netflix announcing a price hike for new customers as it commits a larger budget to original programming on Bloomberg Television’s “Bloomberg Surveillance.”

Lessons about price increases.

This time it has done things a little bit differently, dipping the toe in the water slowly.

You know what is different this time around the gecko house of cards.

They have original shows.

They understand that netflix is home to their own stuff, stuff you would find on a cable channel that you like or their hbo game of thrones.

So they can say we are going to raise prices to ensure the continued to make the kinds of shows you have come to like.

They were not in that decision the last time they toyed with pricing.

By frankly, everyone always thought they would have to do this anyway.

They have billions and billions worth of obligations.

We need to charge more in order to give you the content you want.

Who was at netflix figuring out what the content is?

Who is the master behind content?

The guy who gets the most attention is ted saran toasts -- ted serantos.

They took a page out of the hollywood book.

They were nice, they were a friend of the big layers in hollywood and said we are looking for interesting stuff, interesting shows.

We write big checks and people slowly but surely said ok.

Some approaches in the past with hollywood have not been as easy.

They definitely broke the mold but no longer are the ones doing it.

Amazon does it very well.

Netflix not tapering off necessarily but no longer such a unique player.

Amazon does not share specific numbers or details or how many people are using its service but it is growing quickly.

Prime, the free shipping program , they just raised the price in part because of the content.

What is the response of

How does cbs or nbc response?

I think netflix has forced the traditional players to pony up more commitments to slightly move away with the traditional program of pilot season, which never made sense to anybody.

You have the new shows and test them to see what works and what does not work.

Netflix came in because they were the underdogs.

Then not only had to commit a lot of money for the shows but had to commit to long stretches of shows to say we're in it to get the content creators in it and you have since seen at other programs -- since seen other programs.

You use to see the guys who ran studios where the power players.

Everyone realized it was distribution.

Where is netflix in the food chain rocco you raise an excellent point.

Netflix said it is against the merger between comcast and time warner cable.

This after they are ready cut a deal to ensure they can get high broadband speeds, which has improved service for people watching during prime time and use to get frustrated with buffering.

Broadband is king.

Comcast is king.

Cable companies are king.

That makes netflix uncomfortable as they have to pay to get good access to the pipes.

They are worrying about having to pay others.

At&t and verizon and others.

The precedents that it sets.

Come back again.

Jon erlichman in town for the morning.

Coming up, going live to michigan to speak with sander levin about the challenges facing the long-term unemployed in his state across the nation.

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