Netflix has quadrupled its earnings by promoting its original content in the latest quarter(CBC news, Netflix passes HBO with 3.1 million U.S. subscribers,Oct 21).

In the Comm 101 class, we have discussed which strategy Netflix should take: make its own content, corporate with GOOGLE or ABC,HBO etc. In the class, I believed that Netflix should corporate with HBO and ABC for the reason that if it liaise with HBO and ABC, not only it can expand its content, but also share subscribers with these two giant cable companies and lower cost of buying TV shows. But now, I changed my mind— making its own content is the best way to make it more profitable.

By making its original series, it can attract mountains of loyal customers who only stick to Netflix rather than HBO or ABC. This can decrease the threat of substitutions. Now, Netflix is facing with the problem of whether it should raise the price due to the impact of inflation. Price increasing will restrict the growth of viewers or even make Netflix lose some of its consumers. However, after the success of its first original TV show, House of Cards, it is more reasonable and acceptable to jack up the price due to the fact that people are more willing to pay more because of the only access to their favourite series. Though, it costs more to generate its own TV programmes, it can pass the costs to consumers by increasing price.

Reference:CBC New, Netflix passes HBO with 3.1 million subscribers, 2013.10.21)