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Nah, that seems like a classic textbook late response of a company caught empty-handed by a disruption. The very pressures you cite to preserve their existing b
by jey 16y ago
Nah, that seems like a classic textbook late response of a company caught empty-handed by a disruption. The very pressures you cite to preserve their existing business will ultimately kill them without some IBM-style creative thinking.
Yes, it's theoretically possible that the TV industry is inefficient enough that the oligopoly can keep out new entrants, but Netflix already has way too much market share for that to work out in the cartel's favor.
- earl 16y agoNo, Netflix doesn't. If the studios don't sell netflix a streaming license, then Netflix has no streaming business. I am aware of no law that requires the studios to sell such a license; even if there is, I doubt that it requires the studios to sell such a license on more generous terms than it sells license to cable companies, who pay lots more than netflix.
- Thuraash 16y agoI agree. Moreover, even if they choose to continue to do business with Netflix, any businessperson would see the potential for raising prices, and Netflix may make a big bruhaha now, but in the end, they'll pay it because they'll still make money. Netflix' ridiculous profits and growth rate represents a demand unanticipated by the content providers that serve it. The only reason they didn't capitalize on this potential and raise prices is because of the length of the contract. As soon as it lapses, expect Netflix' profit margins to get a whole lot skinnier, and their growth to slow down. This looks like a classic case of a binding contract slowing down delaying the market response to unanticipated innovation. It's not the conglomerates shutting Netflix down with extreme malice and prejudice; it's the market adjusting and redistributing the newfound pie.