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I 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 m
by Thuraash 16y ago
I 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.