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Why Is Netflix Now Charging More for its Ultra HD 4K Streams?

by on October 23, 2014
 

by Stephan Jukic – October 23, 2014

As many consumers and Netflix users are now aware, the online media streaming company has changed its pricing structure for the web-based streaming that also includes the company’s 4K content.

Until very recently Netflix 4K content was available as part of a general streaming plan that was the same for all customers and included all content options including both HD and Ultra HD.

Now however, the new structure of Netflix services has been broken down into a “basic” plan that costs $8.99 per month but does not include 4K content and a “family” plan that is slightly more costly at $11.99 per month but which includes the company’s menu of 4K movies and shows.

A lot of consumers were surprised by the price change and the major question is, of course, why the price change?

Quite simply, Netflix made the switch because Ultra HD costs more to transmit and manage. The company itself cited their reasons for making the price hike as having to do with the higher expenses that come with 4K’s data heavy transmissions, which, at 3840 x 2160 pixels, offer four times the resolution of normal Full HD.

Not only does it cost more to actually transmit the larger volumes of Ultra HD content over customer’s internet connections, but the company also has to pay annual bandwidth usage fees to major ISPs like Comcast and Verizon.

Beyond these direct costs, Netflix is also heavily indebted thanks to its overall content streaming obligations, to the tune of $7.72 billion dollars of which $3.3 billion are due for the next year alone.

Netflix is anticipating that the popularity of its 4K streaming service will continue to grow as the selection of content also increases and realized that, in tandem with the resulting growth in subscriptions that offer 4K, the bandwidth costs of transmitting that 4K are also going to increase. The previous pricing model simply wasn’t priced correctly enough to cover such expenses.

Currently, Netflix still offers a very limited selection of 4K videos. These include Netflix Original shows such as “House of Cards” and “Orange is the New Black” along with other offerings like “Breaking Bad”, “The Blacklist” and a small selection of movies in 4K.

Breaking bad in 4K with Netflix new streaming plan

The current selection of 4K content from Netflix is limited to a fews shows, including Breaking Bad

However, as Netflix itself has promised, the 4K roster on offer with their “family” plan will soon grow and include any “Netflix Original” series the company produces as of 2014 –all of its new content will be made in 4K resolution. Furthermore, Netflix has also recently announced that it would be releasing a new original series called “Marco Polo” in the next year as well as four new Adam Sandler movies over the next four years thanks to a contract they’ve signed with the actor.

Previously, Netflix automatically offered its 4K content selection in the service’s main menu to any user whose TV was detected as being capable of accepting Netflix Ultra HD streams. Now, users who want the service will have to select it and sign up for the larger monthly fee.

In a show of goodwill to existing users, the company is giving a break to customers who were already receiving UHD streams by grandfathering them in at the lower price for at least two more years.

Currently, Netflix streaming is only available to select TV models that have HEVC decoding enabled and have also made a deal with Netflix to accept its content. These include the latest models from Sony, Samsung, Panasonic, LG and Vizio.

Story by 4k.com

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