Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

NetFlix: America's Most Underestimated Company

slate.com

Post reply on HN
Print view View original

91–100 of 126 posts

Re: NetFlix: America's Most Underestimated Company

#91

Post by lionhearted »

blizkreeg wrote: post #27

This is a tangential pricing-related question: Why does Netflix, which is solving some hard and interesting problems both on the technical (delivery/algorithms) as well as business side (licenses etc) only charge $9-$15 a month whereas online services like dating sites and project collaboration SaaS tools that are arguably much easier to build get away with charging anywhere from $30 to $60 a month? If pricing is abo…

> When a Match.com asks me to pay $30 a month, I cringe. I'm perplexed by this.

As other commentors said, it's partially volume.

Second, it's partially strategy - Netflix could charge more, but have a smaller customer base. Even if the net profit for the short term was higher at a higher price point, they might think it's worth it to get market share, word of mouth, and future expansion.

Third - for some services, customers see higher price as a desirable attribute. That could be the case in dating - people in certain demographics might prefer to know whoever else is using the site is serious enough to pay a decent chunk of coin, not just throwing a profile up for kicks.

Lots of factors. Shortest answer is - strategy. Netflix might be able to make higher short term revenues and net profit, but they might prefer the lower-price driven expansion to get economies of scale, volume, market share, word of mouth, and loyalty. Match.com might be able to make higher short term revenues and profits by lowering price and attracting more users, but instead they prefer trying to brand and position themselves as a premium, curated, high-quality site for serious people. Strategy is complex, lots of layers you can look at it, especially when playing at that really high dollar level.

Re: NetFlix: America's Most Underestimated Company

#92

Post by brianpan »

Vivtek wrote: post #24

Argh, a truly good article marred by one thing: the assertion that BitTorrent is a competitor for NetFlix. This notion just won't die - I use BitTorrent, sure - to get stuff I can't pay for, because nobody is interested in selling it to me. But I'd much, much, much rather toss NetFlix their $9 every month to deliver what I want without the hassle of BitTorrent, and that's the canard that the entertainment industry ju…

BitTorrent is a competitor to NetFlix in the same way that it, and P2P, was a competitor to the iTunes Music Store. Even if it's not free or not without hassle, it's still a way that some people get movies/TV shows etc. Which makes it competition.

Re: NetFlix: America's Most Underestimated Company

#93

Post by avar »

philwelch wrote: post #85
avar wrote: post #83

Earlier quoted context omitted.

I'm not in the U.S. so I can't spend a few bucks on Netflix. But your bad experience with BitTorrent is probably purely a function of using the wrong trackers. I have access to some trackers where the download very rarely goes below 2MB/s, with 5-8MB/s being the average. Some of these have material like discontinued music and foreign films that I could never get where I live, at least not without significant hassle.…

To get access to those trackers, you generally have to be "cool enough", or know the right people, which for me is impossibly daunting.

Most of them are pseudo-private. I.e. they'll open up signups from time to time. It's often only an issue of doing some basic research about what sort of tracker you'd like access to, then subscribing to their news feed.

Re: NetFlix: America's Most Underestimated Company

#94

Post by Vivtek »

avar wrote: post #83
dkarl wrote: post #51

Earlier quoted context omitted.

Whoever prefers the hassle and crappy experience of using Bittorrent instead of spending a few bucks a month for Netflix, their money isn't worth chasing. It would be like Econolodge trying to market to the homeless population.

I'm not in the U.S. so I can't spend a few bucks on Netflix. But your bad experience with BitTorrent is probably purely a function of using the wrong trackers. I have access to some trackers where the download very rarely goes below 2MB/s, with 5-8MB/s being the average. Some of these have material like discontinued music and foreign films that I could never get where I live, at least not without significant hassle.…

Well, but that's exactly what I'm talking about - P2P does provide a really useful service, and I use it, too, for the same reasons. It's just that all things considered, I'd rather pay somebody to do it for me, especially given that NetFlix is ridiculously cheap for the convenience it gives me.

P2P is free in terms of money, but it's not at all free in terms of the effort you have to put into it to get reasonable, useful results. I don't want to do that; I have other things to do with my time and the time in my life when I liked ferreting out the dark corners of the world passed long ago (in my case, it was discovering that our stereo's radio band selector could cause it to pick up shortwave when positioned correctly - that summer, I learned that the Soviet Union was a paradise for academics and artists).

I don't have the time to find the right trackers, and there's the ever-present danger of the RIAA sending me a nastygram - or, as happened before I turned on security on my WiFi, sending my ISP a nastygram about movies downloaded. That sucked. This neighborhood is dirt poor, and I didn't mind sparing some bandwidth, but if my ISP is forced to turn me off if I don't police it?

That's the hassle of P2P, unfortunately. My beef is that if the RIAA were roughly as intelligent and mature as my 11-year-old, I'd be able to keep my WiFi open and buy movies online for reasonable amounts of money.

So when an otherwise excellent article like this slips in an incorrect assertion about evil pirates without justifying it, that really burns me. There are perfectly good business opportunities that the "rightsholders" (god how I hate that word) are too fat and lazy to take advantage of - but plenty of lawyers.

Re: NetFlix: America's Most Underestimated Company

#95

Post by dopeyman »

papa wrote: post #3

It's too bad there's no way to assign a universal "reputation" score to the various pundits out there so that readers can better assess the value of their published predictions. Michael Pachter, for instance, has been wrong on a number of occasions (he predicted Sony would dominate the current console generation and Nintendo would languish and MSFT would be #2 -- at least he got the last part right). Like the iPad wh…

There's a project working on this very issue. Developers, check out http://nextny.jobthread.com/job/lead-developer-new-york-ny-u...

Re: NetFlix: America's Most Underestimated Company

#96

Post by Vivtek »

MichaelSalib wrote: post #58
Herring wrote: post #26

Earlier quoted context omitted.

>hassle of BitTorrent What do you mean? I hadn't noticed.

Using BitTorrent to pirate media incurs some legal risk; there is always a chance that a media company will decide to sue you. Now, the odds of that happening are low, but once they decide to sue you, you will almost certainly lose thousands of dollars, even if you end up winning. In a sense, you can think of the money spent legally purchasing all (or most) of your media as an insurance policy -- you're paying for th…

Well, I'm primarily just talking about the hassle of finding what I want on BitTorrent. The legal aspect rankles but isn't really my main concern. With NetFlix, I just pick things out of a list, no popup porn ads, no searching for a tracker that actually has seeds, no bait-and-switch. Just movies, delivered about as fast as I can watch them anyway.

Re: NetFlix: America's Most Underestimated Company

#97

Post by Vivtek »

brianpan wrote: post #92
Vivtek wrote: post #24

Argh, a truly good article marred by one thing: the assertion that BitTorrent is a competitor for NetFlix. This notion just won't die - I use BitTorrent, sure - to get stuff I can't pay for, because nobody is interested in selling it to me. But I'd much, much, much rather toss NetFlix their $9 every month to deliver what I want without the hassle of BitTorrent, and that's the canard that the entertainment industry ju…

BitTorrent is a competitor to NetFlix in the same way that it, and P2P, was a competitor to the iTunes Music Store. Even if it's not free or not without hassle, it's still a way that some people get movies/TV shows etc. Which makes it competition.

Yes, yes, and the convenience store in the gas station two blocks down is also "competition" for the Meijer superstore with actual produce and food, that I have to drive to.

It's not really competition. I never go to that convenience store because they don't have what I want to eat. So in your sense, while they exist in the same market and are therefore "competitors", that viewpoint really distorts the reality of the situation.

Re: NetFlix: America's Most Underestimated Company

#99

Post by kakuri »

danilocampos wrote: post #42

I love Netflix. They're a role model for other companies, and for me as a person. Netflix has succeeded on the strength of two things: integrity and ambition. They genuinely care about their customers. They work extra hard to make sure people who give them money are happy to do it. In their call centers, CSRs are friendly and empowered. They're instructed to err on the side of doing things that are most likely to mak…

I've only talked to them once (I was annoyed that there was no option for communication except phone), but the guy I talked to was very helpful, friendly, receptive, and did indeed seem empowered.

Re: NetFlix: America's Most Underestimated Company

#100

Post by kakuri »

pmichaud wrote: post #60
danilocampos wrote: post #42

I love Netflix. They're a role model for other companies, and for me as a person. Netflix has succeeded on the strength of two things: integrity and ambition. They genuinely care about their customers. They work extra hard to make sure people who give them money are happy to do it. In their call centers, CSRs are friendly and empowered. They're instructed to err on the side of doing things that are most likely to mak…

I wasn't so lucky with them. I was a good customer, but they started silently throttling my account, and they wouldn't admit to it either. It's since come out that that's exactly what they were doing. If it's too expensive to send me that many disks, fine, but don't lie to me about it.

I live in a big city where they have a local warehouse and they consistently ship movies to me really fast. I'm on the cheapest plan ($8/mo) and when I send a movie back, they get it the next day, and in the same day send out a new one. At that level of service it was already easily worth $8, but now they have an awesomely expanding offering of HD streaming content which makes it tremendously more valuable to me.
Post reply on HN