Netflix Plans Big Spending to Build on 2013 Growth

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Jan. 2 (Bloomberg) -- Bloomberg senior West Coast correspondent Jon Erlichman looks at the year ahead for Netflix in 2014 on Bloomberg Television’s “In The Loop.”

Definitely, deirdre.

If you think about 2013, a very important year for netflix.

A year you saw the brand a lot more focused did in the sense that netflix was viewed as the tv and movie buff -- at a certain price point.

As you start out, a legitimate must the tv spot.

They rolled out new shows and they continue to cut deals where they will be the exclusive home to certain movies after they have been in theaters.

That is why they cut a big deal with is me.

They've got important art is like the weinstein company.

You take that and you couple it with changing the pricing laws where they have multiple price points depending how many are using it in the home, and you are talking about a shift in business lately and a trend that will continue in 2014. which is costly.

If you look at the numbers netflix talked about in terms of where it will be spending money this year, $3 billion going toward all of the content they are making available.

Another half billion dollars on the marketing campaign of what netflix is.

And a lot of it obviously introducing the brand overseas.

And then, of course, ease of use is so important so technology is where they spend a lot of money, too.

It is one of the things that made netflix as powerful as it is at this point.

You take all of that together and, yes, you are right, it will be a pretty big spending year for netflix.

As far as this new potential pricing model, netflix had a huge pr issue last time that it tried to tweak its pricing model, differentiating the disc from downloadable version.

Frankly i am surprised they are going down this road again.

I think they did learn some lessons from that, for sure.

For them, they've got to find a way to make sure they generate enough revenue from each of their users.

There is a difference between the number of subscribers they've got, in the neighborhood of 40 million around the world.

And the number of people actually using the service.

They have been pretty flexible so far with that ability of people to share different accounts, but i think given the content they have to figure out ways to generate more revenue for every user.

And there is a lot of competition.

Let's face that fact, two, deirdre.

Traditional cable still has sports, which netflix does not have, and hbo is doing very similar things and always has been doing similar things to what netflix is doing with the original series and exclusive film deals and has with the studios like fox and universal, and then obviously amazon and hulu and the international players, too.

You think about who their competitors will be, you have to think of markets like the nordic region, europe, latin america, all those areas where there are local services.

We don't talk as much about but were netflix will be going head to head, the same way it is going head-to-head with hbo here in the united states.

Thanks, as always.

Senior west coast correspondent jon erlichman joining us from l.a.. catch him and all the latest in tech and media news every weekday 1:00 p.m., 6:00 p.m. eastern time right here on "bloomberg west." keeping you on the west coast, researchers in california getting close to releasing an unmanned fully autonomous open -- ocean vessel powered by wind and solar.

It basically completed a record

This text has been automatically generated. It may not be 100% accurate.

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