Okay, so here's a simple example. You can buy a sack of rice anywhere for $2. If you sell the same kind of rice for $200, do you think you'll sell any sacks? Yo

Okay, so here's a simple example. You can buy a sack of rice anywhere for $2. If you sell the same kind of rice for $200, do you think you'll sell any sacks? You'd go out of business, and deservedly so, right? The interesting thing in Netflix's case is that the product is (content + convenience), but since the content can be obtained (illegally) for free, the customer sees only the value of the convenience. If you raise the price above what the customer is willing to pay, why would you expect the customer to pay it? Now sure, piracy is an illegal act, but so is fraud. Yet insurance and credit card companies manage to sustain a working business model.