On Sat, Oct 6, 2012 at 3:30 AM, Wesley (in Texas) <[email protected]>wrote:
> Though the business plan is barely working for Netflix now... > > When Dish bought Blockbuster, they had hopes with competing with > Netflix.But lacking the regulatory approval to get wireless spectrum, they > couldn't really launch a internet/TV service to tie Blockbuster streaming > too. And without that, Dish realized they had bought a bunch of stores that > no one goes into anymore. And while they could try and clone Netflix with > independent streaming and/or DVD by mail, Dish figured the startup costs > would be too high -- especially now that Hollywood is on to Netflix's > popularity and is charging them for all of the subscribers they have, vs > the low number they had initially. > > In fact, Blockbuster may just close almost all of its stores as well... > > > http://www.bloomberg.com/news/2012-10-04/dish-s-ergen-scraps-blockbuster-plans-after-wireless-delays.html > This shows again that Netflix's problem is much more fundamental than pissing off a few hundred thousand old time customers by charging separately for mail-in disks and streaming. Their problem is that they set their initial price too low, which set customer price expectations, but can only gives them a profit from growth. Netflx, even with the infamous price increase, can not make a profit simply from the revenues they take in from their current customer base. If they raise their rates enough to make a profit, they will not be noticeably cheaper than another premium cable content service, which these days already make their content available online too. They desperately need to make more high demand content available for streaming - content that cuts across the lines of existing premium services - but the content providers have figured them out, and are either refusing to make a deal, or insisting on a price that is too high. The real problem for them is the very big hitters who have entered this area, and have much deeper pockets, driving up the price of the content. I am surprised that Ergen can make money just be selling off the old BB buildings - why didn't Blockbuster either do that themselves, or charge Ergen more money? -- TV or Not TV .... The Smartest (TV) People! You received this message because you are subscribed to the Google Groups "TV or Not TV" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/tvornottv?hl=en
