The problem for Netflix is that consumers flip the fuck out when they decide to raise the price $1 or $2, meanwhile cable is racking in 10-20x times the subscri

The problem for Netflix is that consumers flip the fuck out when they decide to raise the price $1 or $2, meanwhile cable is racking in 10-20x times the subscriptions revenue and no one bats an eye. This means that Netflix does not have the buying power that cable does, and hence the studios do not like Netflix. I mean sure it's great as supplemental income, but as Netflix becomes more popular the economics breakdown for studios and it becomes harder and harder for them to sign deals. So in effect, the pricing of content follows something like a power law distribution. Therefore the fixed cost of producing a great show is a no brainer for Netflix. In fact it may be their only out given the squeeze between consumers and studios.