Netflix CEO Reed Hastings' explanation on changes to the service
42 replies, posted
[quote]that was certainly not our intent[/quote] Your intent was to make money. You never intended to have to say your sorry about it.
[QUOTE=imasillypiggy;32381461]Your intent was to make money. You never intended to have to say your sorry about it.[/QUOTE]
Well he's the CEO of a business, that's implied. At least he admitted his arrogance.
[QUOTE=deathstarboot;32382540]Well he's the CEO of a business, that's implied. At least he admitted his arrogance.[/QUOTE] Sure but I think its silly when they act like they care about the people more then money. This might be true with small businesses or ones without investors but for most its obviously money.
[QUOTE=imasillypiggy;32382627]Sure but I think its silly when they act like they care about the people more then money. This might be true with small businesses or ones without investors but for most its obviously money.[/QUOTE]
Are you implying that only small businesses care about customers? Netflix operates international business too, this year so far they've lost 20 million to it. Any company focused just on money would cut it immediately.
Another thing a soulless company would do is NOT apologize with a personal email. Better yet, they wouldn't go to extra lengths to try to ensure their customer is getting their money's worth.
Is this company in business to make money? Yes, every business is. However, they are a very conscientious company as well, working their hardest to keep prices reasonable in the face of massive and growing licensing fees.
I feel like the general air in this thread is people either mad because their price got raised, or mad because Netflix is a big company. Nobody who is getting all angry looks at the financials, at all, to try to understand why all of this is happening.
[QUOTE=Tigster;32374788]"Blah Blah, I like to just assume companies hate their customers and take every chance they get to screw them over, even though I don't bother understanding their situation"[/QUOTE]
You think they HAVE to do this? It's all greed man.
The fact that Netflix is pretty much a monopoly at this point means that they ain't hurtin for money.
[QUOTE=Tigster;32382935]Are you implying that only small businesses care about customers? Netflix operates international business too, this year so far they've lost 20 million to it. Any company focused just on money would cut it immediately.
Another thing a soulless company would do is NOT apologize with a personal email.[/QUOTE] Sure they would. They want customers trust. It makes sense business wise.
Are businesses in business to make money? Yes. Of course they are. That is the primary goal of any business.
Does that automatically mean they don't give a rat's ass about their customers? Of course not. That's a downright stupid thing to say.
By that logic, you can extend it to say that every man and woman who works a job cares for absolutely no one other than themselves, simply because they're working a job. And why are they working that job? To make money.
To automatically assume that all big businesses don't care about their customers is a downright stupid thing to do. Sure, there may be businesses that care less about their customers than others, but don't go and automatically assume that every business does just such a thing.
On that note, I feel that Netflix are getting a lot more flak for this than they should. They really don't have a choice in the matter regarding the price increases. The film studios basically have a gun to their back, saying that if Netflix don't start paying them more, they'll just take their rights to film distribution to other outlets, such as Red-Box and Blockbuster.
So it's either Netflix has to agree to paying the studios more money, or pass them up on the offer. If they agree to pay the studios more money, then they have to either increase the price of subscription or not increase the price of subscription.
If they pass the studios up on their offer, then they have less of a selection of films for their subscribers to change from. Simultaneously, their competitors [b]will[/b] have that selection. These combined factors will probably end up with Netflix losing a substantial amount of customers to these competitors with a better selection. Directly tied to this, the profit margins Netflix make will quickly begin to plummet, leaving Netflix unable to pay their dues, and eventually leading to them most likely bottoming out and shutting down.
If Netflix agree to the studios, but refuse to hike up their prices, then the profit margin that Netflix makes on the films drops. After paying their employees, doing expansion and maintenance, taxes and other fees, paying the shipping for your DVDs, among various other things, the money that Netflix pulls in is most likely substantially less. As a result, they have less money to pay all of these fees, and at the same time expand. As inflation builds, Netflix lose even more money, and they'll eventually start to lose money. Let it proceed enough, unchanged, and eventually Netflix will bottom out. Then guess what - you get absolutely [b]nothing[/b] from Netflix, because they're out of business.
If they agree to the studios' terms, and decide to raise the price of their services, then they are able to pay the studios their increased fees, while still being able to pay all their dues with a healthy profit margin. This profit margin, in turn, allows them to expand their service and keep them afloat in hard times, so their subscribers can continue to enjoy their services. Yeah, they're going to undoubtedly lose some subscribers because of the price hike, but chances are their projections leave this to be their best possible outcome.
And that's something a lot of people seem to not understand. Businesses like Netflix using have an entire division dedicated to doing financial projections of the possible outcomes of every decision they make. And these projections aren't just linear equations, but they take into account the probability of losing subscribers after a price hike (for example).
Chances are, their projection team's estimates concluded that accepting the studios' demands and raising their subscription prices led to the highest probability of Netflix being able to stay afloat, while keeping the ability to expand their services.
Netflix really were stuck between a rock and a hard place here. Between the studios' demands and the threat of losing subscribers, there really was no easy way out. They had to choose the lesser of the evils, and hope for the best.
I'm fairly certain that Netflix took the option that had the highest likelihood of their survival projected - which directly relates to their ability to continue providing their services to their subscribers.
Next time you guys decide to ride a business's ass for a decision they make, maybe you should consider their alternatives, and just what their situation was when they made it. Just a thought.
never used netflix, and now im glad i never did
redbox master race reporting in
[QUOTE=meppers;32385078]never used netflix, and now im glad i never did
redbox master race reporting in[/QUOTE]
have fun NOT watching the best talking heads concert ever
[QUOTE=Meller Yeller;32383146]You think they HAVE to do this? It's all greed man.
The fact that Netflix is pretty much a monopoly at this point means that they ain't hurtin for money.[/QUOTE]
And the fact that they are a monopoly means other companies are gunning for their share of the market. If Netflix doesn't agree to some ridiculous price set by the industry, they threaten to take their business to the competitors. The price of licensing is continuing to climb, and Netflix isn't some insurmountable, concrete pillar that will never run out of money.
I'm not an idiot, greed is obviously a part of it, but it's more along the lines of simple self interest, rather than them plotting to take your money in some evil scheme. They are incurring more expenses, it only makes sense to try to increase revenue, and a modest increase in your monthly payment, coupled with not only the option to choose one or the other, or both services, as well as offering game rentals, should at the very least give people some kind of motivation to chill the fuck out about it.
You all strive to vilify businesses trying to survive, adapt, and continue to make a profit, and you never hesitate to champion the notion that all businesses are corrupt and hate their customers and wah wah wah. If Netflix is doing all of this just out of greed, they could have planned it better, incurring more expenses with video game rentals, as well as putting in the effort to divide the services, while maintaining the expenses with studios, which are only going to get higher, as the competition grows, yeah, these guys are just plain [I]evil[/I]
ITT: People don't understand studios deciding to jack up movie right rates to Netflix
[url=http://news.cnet.com/8301-31001_3-20080205-261/what-was-hollywoods-role-in-netflix-price-hike/]Hey look, NBC asked $22 million last year and $300 million this year[/url]
[quote]Michael Pachter, an analyst with Wedbush Securities, estimates that Netflix's total streaming-content costs were $180 million in 2010 but could balloon to nearly [b]$2 billion in 2012.[/b][/quote]
[QUOTE=jeimizu;32378596]The Qwikster name is already backfiring, because this guy wont give up his twitter account.
[url]http://twitter.com/#!/Qwikster[/url]
so the first thing people looking for their Twiiter see is:
"Bored as shyt wanna blaze but at the same time I don't ugh fuck it where's the bowl at spark me up lls"[/QUOTE]
Jason Castillo
@Qwikster Jason Castillo
About to go eat cuz I haven't ate all day wonder wat iLl make lls ima make tacos lls#thumbsup
5 hours ago via Twitter for BlackBerry®
pure gold for a twitter page
[QUOTE=psp401.com;32387673]ITT: People don't understand studios deciding to jack up movie right rates to Netflix
[url=http://news.cnet.com/8301-31001_3-20080205-261/what-was-hollywoods-role-in-netflix-price-hike/]Hey look, NBC asked $22 million last year and $300 million this year[/url][/QUOTE]
That's ridiculous. I don't even want to imagine how much other studios are asking.
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