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I'm not familiar with their originals economics, but the original streaming Netflix was not priced below the cost. As evidenced by them keeping the same subscri
by cyberax 8mo ago
I'm not familiar with their originals economics, but the original streaming Netflix was not priced below the cost. As evidenced by them keeping the same subscription cost for years.
- raw_anon_1111 8mo agoHow is that “evidence” of anything? The “evidence” that they were charging less for subscriptions than it cost to run the streaming service is that they were borrowing billions of dollars to both license content and create new content over the course of years. Netflix borrowed $16 billion over a decades https://www.nytimes.com/2021/01/19/business/netflix-earnings-debt.html https://www.nytimes.com/2021/01/19/business/netflix-earnings... Because subscriptions didn’t make enough money to fund its business. Were they being “anti competitive”?
- tovej 8mo agoYes. They were. The US just hasn't enforced antitrust laws in decades.
- raw_anon_1111 8mo agoSo now a business shouldn’t be able to borrow money either to start a new initiative? Should they have instead charged customers enough from day one to fund growth? So the first 1000 or so customers should have been charged enough so they could spend an extra $16 Billion?
- cyberax 8mo agoIf they're using their overwhelming size to lock out smaller competitors that can't put up a similar collateral? Probably a good idea. And it looks like Netflix simply needed to make the service a bit more expensive?
- raw_anon_1111 8mo agoA “bit” more expensive to cover $16 billion of expenses? So how would that have helped smaller competitors? Where were they going to get the money from to compete if not other lines of businesses or borrowing? Were they going to charge their first 10,000 customers $100,000 a year so they could fund development without either borrowing money or take it from existing businesses?
- cyberax 8mo agoYes? Netflix had 20 million subscribers in 2010. At additional $50 per year per subscriber, that's $1B a year. More than enough to be profitable with regular loan financing at market rates. > So how would that have helped smaller competitors? Where were they going to get the money from to compete if not other lines of businesses or borrowing? By borrowing at market rates and pricing services to cover the loan payments. You're actually making a good argument why cross-financing should not exist at all and that we all would probably be better without it.
- raw_anon_1111 8mo agoYou just said that Netflix shouldn’t borrow money because it was anti competitive And I can’t believe that this conversation just went to companies should borrow money instead of reinvesting its own profits. Really?
- cyberax 8mo agoNo, I'm saying that using Netflix cross-financing to borrow money to operate below cost is anti-competitive. Not borrowing in general.