Greenfield compares Netflix's numbers with some sample numbers from HBO (since Netflix says it wants to be "the HBO of Internet TV") and the results look surprisingly good even at that price-tag. Given their stated goal of having five shows at this size and price, Greenfield estimates that the shows would need to drive an additional 10% growth in subscriptions in order to break even, assuming that Netflix doesn't change its basic $8/mo subscription price and includes these series in that price. HBO's shows cost considerably more to produce and don't drive that much more revenue, making Netflix's P/L projections easier to hit.

If there's a problem in Netflix's future, it's probably not home-grown content but the content it has to get from other producers, which is getting increasingly expensive. As those costs have gone up, Netflix's margins (and possible profits) have gone down. Making its own exclusive content helps stabilize that drain and provides a differentiator - if you like these shows and can't get them anywhere else... well, there you go.

My personal opinion is that Netflix is going to have to raise subscription rates. I foresee them inching toward a $9.99 price over the next two years. If they break $10 though I'd be surprised. I also expect them to explore some pay-more extras like the bonus things you get on most DVDs. Interviews, backstage stuff, even possibly early access are all things they can price out and play with that won't hurt their main subscription base.