How so for Netflix? I know of no one who uses an iOS device to manage their Netflix account. Everything is done via the web. Also, these publishers, etc. need to do some serious advertising to let people know that if they buy their content outside of iTunes that it will keep prices down.
Apple is just out of line regarding this situation...30% from the publishers if they subscribe in the app!?! No links to outside purchases???!!!?? These guys just need to walk away from Apple in droves and focus on the Android and (soon) WebOS tablets. I will have nothing to do with Apple's subscription model.
Or, to be more precise, news, magazine and mass media publishers always have their choices. The talk of monopoly by Apple -- claimed to have been eclipsed by Android mobile computing devices in the US, and have less than 5% of world market -- is utter nonsense.
When it comes to subscription model for the mass media, news and magazine publishers has at least three or four viable choices;
- Amazon
- Apple
- now Google
and add to this the attempt of publishing groups to set up an a la carte subscription from a stable of participating publishers. And, if a news or magazine conglomerate still feel being cheated, no one is preventing any publisher to continue their online business, which they have demonstrated to be losing business models, so far.
There is no crystal ball to divine that the hordes of Apple mobile device users will embrace any subscription model, simply because it is offered. The subscription cost would be a consideration. Then there's the issue of "free online" web, from the publisher's own effort. Frankly, I fail to see why I would pay any amount of any news or magazine App, if I could get the same information (and usually more comprehensive) than the App version. An experiment by a newspaper in the UK showed a significant drop in subscribers, the instant a "pay wall".
Let's face, there are proportionally less news and magazine readers these days compared to other decades. And, based from the reaction of many in the internet generation, it appears that not too many fully appreciate original source, and simply consolidated news. Apple Insider is a good example. I bet many users may have encountered this news, not from the Wall Street article.
I am amazed sometimes that many participants here consider rumors presented here, as if they are facts, and based their perspectives on the potential implications/ramifications of such rumors.
With this mindset of the internet generation, it is very difficult to fathom the viability of the source media, as it is configured today. Not even Apple could save them, especially if news consolidation is here to stay.
Quote:
Originally Posted by anantksundaram
The irony is stark. First, Google kills off the
publishers' traditional business. Now, they are being induced to take their new business to Google.....
anantksundaram,
Yes indeed!
Didn't the publishers group sue Google and still in litigation because of Google's digital information project? Based from the outcome so far, Google gained the upperhand. It's concept of fair use of copyrighted books and journals is not to review and quote excerpts but simply skip pages of an entire book, and randomize those that are not presented.
Would they demand royalty from Google, for its highly profitable news consolidation business, as they have threatened, and some sued, before they go into bed with Google?
Quote:
Originally Posted by anantksundaram
All thanks to the magic of ad dollars and monetizing user info, both of which Apple lacks (or refuses to monetize). Wait till Facebook and Twitter get their act together, and start to compete seriously for those same, finite ad dollars and user info. Google's attractiveness will start to sink like a stone.
The tendency of these companies to arrogate the right to monetize my personal information is one of the reasons why I avoid using their services, as much as possible. With Google for example, as much as I am fascinated with the services, I limit myself to Search, You Tube, and sometimes "Google translate." Similarly, I have personal accounts with Facebook, but after seeing how they track your every move, and their much publicized privacy fiascos. I may at some point go back to Facebook, but not for personal but more for business needs to reach an audience. Let's face it, how can one ignore more that 400 million going 500M target "eyeballs".
With a net negative variable revenue stream for every user serviced on iOS the impact on reduced total revenue would obviously increase the burden on fixed costs as a service component. So, it is actually you who is business illiterate as it does add fixed costs to netflix to service iOS accounts. Why would continue to offer a iOS client if it is a net loss? The greater number of subcribers that are serviced the greater the net loss to netflix. No other client channel (xbox, blue ray players, smart TV's, android ect.) charges netflix for a service that enhances the value of there devices for free. It makes no sense for netflix to operate under such circumstances, even the marketing and exposure they receive is on iTunes is dwarfed by there existing channels.
Your first assumtion is wrong, making rest of your argument moot.
Where in the world did you get the idea that with apple's 30% cost, each iOS subscribers become a net negative revenue stream?
Again with Google and privacy issues, wait till these publishes etc., start to sell off people's personal information, see who screams then, of course it won't be google's problem they'll just play it off on the app publishers, people never learn.
Maybe you think it's a good idea to have Apple as a middleman between you and the content deliverer. I don't. I see this as great for consumers. A lower cut to Google may translate into a better rate for me. A direct contact with the content provider may result into a discount on the rate for a good customer. Now if you do want to put in a wall, you can always opt-out. With Apple, there is no way to opt-in.
So in the end, like always with Android, it's all about Choice.
This is bullshit, troll. Apple's providing one-click access to customers with credit cards who actually buy things, and lots of them. The idea that they are simply providing payment services and nothing more is bogus.
The irony is they are providing the same "One Click" payment system they licensed from Amazon
Maybe you think it's a good idea to have Apple as a middleman between you and the content deliverer. I don't. I see this as great for consumers. A lower cut to Google may translate into a better rate for me. A direct contact with the content provider may result into a discount on the rate for a good customer. Now if you do want to put in a wall, you can always opt-out. With Apple, there is no way to opt-in.
So in the end, like always with Android, it's all about Choice.
There is no incentive to lower the price when a consumer is already willing to pay that price. That flies in the face of all logic. It's simply more profit for investors.
The real question the big hitters like Netflix and Amazon will have to consider is whether it makes sense to change their entire pricing model to appease Apple. Especially if Netflix or Amazon isn't allowed to charge a lower rate outside an iOS app. I'm guessing either Apple will budge (can't say I recall the last time I've seen that happen) or the developers will pull their apps.
I prefer Netflix pull their app rather than raise prices to cover the 30%. Watching movies on that tiny screen really isn't worth paying any more for. Netflix has already raised their prices since adding streaming.
This is bullshit, troll. Apple's providing one-click access to customers with credit cards who actually buy things, and lots of them. The idea that they are simply providing payment services and nothing more is bogus.
Yes, there are a lot of good things that in-app payments bring for consumers, but the only thing they are providing app developers with is assistance in processing the payment, yet they are are charging 30% for it, making it mandatory in any app that accesses paid content online, and regulating the prices. In the end us consumers still lose if prices go up or if apps are pulled because developers and content providers refuse to meet Apples demands.
Go read some of my other posts unrelated to this topic before calling me a troll. I've defended Apple's actions more than I've criticized them, but I'm not blind and it's not my fault you choose to walk with blinders on.
There is no incentive to lower the price when a consumer is already willing to pay that price. That flies in the face of all logic. It's simply more profit for investors.
I have gotten better subscription rates from some print magazines directly. On others, I have gotten better rates by going through a third party. I don't know what the criteria and economic models are used to make that decision. But with the Google model, if they are paying less to Google, they *could* use it to reduce my purchase price. It's happened in print media. No reason to think it couldn't happen in electronic media.
I get a free book every Friday from B&N on my Nook. I don't know if it's available on their apps as well. But you get the idea. It's not a bad thing for NYTimes to know about me or my tastes in reading. They can tailor the articles they present to me.
I was just reading the developer docs on the new Apple subscription feature and it states that the subscriptions auto renew until the user cancels. And to continue mixing a few of the recent threads, funny to think of that in light of the Smurfs article on sneaky in-app purchases. So what happens if you delete the app? You no longer have the ability to end the subscription since the app is gone.
From the docs: "They can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription."
However I am unable to find any reference to subscriptions in my iTunes account. Maybe if I had a subscription it would show up under purchase history, but you think it would be a button to manage subscriptions.
Anyone know how that Daily subscription works. I think the free subscription just expired. Does it now auto renew at .99 per week or just stop working?
Google exist in the market soley to give apple competition to avoid any sense of a monopoly. Apple gets premium market, android gets the rest. Steve and that guy from google had lunch a year or two ago in which jobs said something along the lines of "someday they'll figure out what we're doing"
This is how it is. It's almost like a friendly competition between the two companies. Sometimes they have to pretend to be enemies. As 2pac told biggy, it's just business, nothing personal.
Anyone know how that Daily subscription works. I think the free subscription just expired. Does it now auto renew at .99 per week or just stop working?
Auto renewal will be cancelled if the subscription price is raised.
Simple Arithmetic? If a developer was selling $10 subscriptions to 100 people before the 30% fee that's $1,000. Now if you sell $10 subscriptions to 130 people (30% more unit sales) that's $1300 which makes the publishers take $910. To break even the publisher needs to sell at least 43% more subscriptions on iOS or hike up the price considerably.
The real question the big hitters like Netflix and Amazon will have to consider is whether it makes sense to change their entire pricing model to appease Apple. Especially if Netflix or Amazon isn't allowed to charge a lower rate outside an iOS app. I'm guessing either Apple will budge (can't say I recall the last time I've seen that happen) or the developers will pull their apps.
This is entirely innacurate. You are only dealing with revenues here, and you forget profit margins entirely.
If (In lalaland, sure but if) Amazon for instance has a 40% margin for every e-book (and how I suspect that it does not), the relevant maths are completely different.
A $10 e-book will be sliced to $7 before reaching amazon's coffers. This means that amazon will win $1 for each e-book, not $4, cutting their revenue four-fold.
It means that an e-book sold in iPad is worth 4 times less than sold anywhere else, for amazon.
This is considering a 40% margin. With 50% margin, an iPad book is worth 2.5 times less. But here comes the interesting part: if the margin is 35%, it becomes 8 times less, if the margin is 32%, it becomes 20 times less.
So the real question is, how close to 30% are these corporations' margins? Assuming that they are above such levels of course. The answer will always be "Always too close", because these corporations run at very competitive prices. 30% will always put these companies in the red, or in a very troubling situation.
Even if amazon has a profit in each e-book sold on an iPad this way, they will prefer not to, since selling them in the iPad devaluates them. They will prefer to sell e-books through their online store only, and iPad owners will still buy them there anyway.
There it is! Google continues to do what's good for them while Apple does what's good for them and their customers.
Yes because locking your content to a SINGLE platform via a DRM that you won't allow on competing platforms is a huge win for consumers.
The biggest difference here is that Google's offering is an opt-in. It's not required across any of their platforms, and it doesn't have ANY of the nasty rules that apple's has (price setting).
So a developer can CHOOSE to use this method, or they can CHOOSE to use another method.
Plus, this model also looks like Google will be helping (in part or in full) to manage cross-platform licensing, so that if I buy a game on Android, I could download the same app for free for WebOS as an example. Heck it would even work with iOS if Apple didn't shut everyone out.
This DOESN'T let apple off the hook because this is a service Google is offering to everyone. Apple's is a REQUIREMENT on everything within their ecosystem, effectively forcing their competitors (Amazon, Netflix, Pandora) to shut down and leaving only iBooks, iTunes, and whatever streaming service apple sticks an i in front of .
AKA Apple came out with some shiny new Single Platform content solutions and it couldn't figure out why content creators kept working with companies that offered cross compatibility. So instead of looking at why and adjusting their own offerings accordingly they're locking all competition out so that the only way content creators can access their users is by using Apple's Inferior distribution method.
And yes, it's inferior. If it wasn't, content Creators would be jumping all over it and users would be consuming it. But the reality is that Netflix and Kindle are still the go-to products.
I prefer Netflix pull their app rather than raise prices to cover the 30%. Watching movies on that tiny screen really isn't worth paying any more for. Netflix has already raised their prices since adding streaming.
What's ironic about Netflix raising the price for streaming is they have cut out the US Post Office which was costing them > $400 Million to distribute the DVDs, annually.
So Netflix reclaims that profit loss and then raises the prices to offset the bandwidth fees to companies like Akamai.
In short, Netflix is making a killing since moving to Digital. That 30% means they will be down to a +$280 million this year in increased profits without having to do anything more than distribute digitally.
You're delusional. The install base available to Netflix is > 100 Million with iOS. They aren't going to lose that base. I could care less about Kindle.
Sorry, but your the delusional one.
Just this morning Rhapsody told Apple to smarten the fuck up or they are pulling their app.
Netflix will leave Apple in a heartbeat. They don't need Apple or their platform at all. No content producer does.
It blows my mind how so many believe that Apple has all the cards here. Consumers who want publications, movies, music or any other service will find that service. It's insane to think people are just going to throw up their arms and say "oh well - guess I'll just stay stuck on my iPad with no content or services".
All businesses make mistakes. It's irrational to think that Apple is somehow a Borg entity - with all these geniuses working as a hive mind, calculating every outcome to perfection... Yet 90% of the posters here actually believe that.
Well, if I recall, resistance was not futile. In fact, I believe the Borg were defeated.
Get ready for the massive blowback. Apple is about to be humbled.
What's ironic about Netflix raising the price for streaming is they have cut out the US Post Office which was costing them > $400 Million to distribute the DVDs, annually.
So Netflix reclaims that profit loss and then raises the prices to offset the bandwidth fees to companies like Akamai.
In short, Netflix is making a killing since moving to Digital. That 30% means they will be down to a +$280 million this year in increased profits without having to do anything more than distribute digitally.
Why don't you go and check out their numbers before spouting factually incorrect errors.
First off, a ton of people still use the postal system for DVD's and will continue to do so as long as studio's don't provide streaming rights to new content constantly.
Secondly, in the last quarter of last year they had a TOTAL gross profit margin of 37%. Their NET profit margin was less than 8%. So no, they don't have 30% they can just give up if a customer decides to use an itunes gift card to register instead of going through the site.
Comments
What? If you didn't understood it I can explain better, or I will try to do
Great start...
Good bye Kindle, Netflix for iPad.
How so for Netflix? I know of no one who uses an iOS device to manage their Netflix account. Everything is done via the web. Also, these publishers, etc. need to do some serious advertising to let people know that if they buy their content outside of iTunes that it will keep prices down.
Apple is just out of line regarding this situation...30% from the publishers if they subscribe in the app!?! No links to outside purchases???!!!?? These guys just need to walk away from Apple in droves and focus on the Android and (soon) WebOS tablets. I will have nothing to do with Apple's subscription model.
When it comes to subscription model for the mass media, news and magazine publishers has at least three or four viable choices;
- Amazon
- Apple
- now Google
and add to this the attempt of publishing groups to set up an a la carte subscription from a stable of participating publishers. And, if a news or magazine conglomerate still feel being cheated, no one is preventing any publisher to continue their online business, which they have demonstrated to be losing business models, so far.
There is no crystal ball to divine that the hordes of Apple mobile device users will embrace any subscription model, simply because it is offered. The subscription cost would be a consideration. Then there's the issue of "free online" web, from the publisher's own effort. Frankly, I fail to see why I would pay any amount of any news or magazine App, if I could get the same information (and usually more comprehensive) than the App version. An experiment by a newspaper in the UK showed a significant drop in subscribers, the instant a "pay wall".
Let's face, there are proportionally less news and magazine readers these days compared to other decades. And, based from the reaction of many in the internet generation, it appears that not too many fully appreciate original source, and simply consolidated news. Apple Insider is a good example. I bet many users may have encountered this news, not from the Wall Street article.
I am amazed sometimes that many participants here consider rumors presented here, as if they are facts, and based their perspectives on the potential implications/ramifications of such rumors.
With this mindset of the internet generation, it is very difficult to fathom the viability of the source media, as it is configured today. Not even Apple could save them, especially if news consolidation is here to stay.
The irony is stark. First, Google kills off the
publishers' traditional business. Now, they are being induced to take their new business to Google.....
anantksundaram,
Yes indeed!
Didn't the publishers group sue Google and still in litigation because of Google's digital information project? Based from the outcome so far, Google gained the upperhand. It's concept of fair use of copyrighted books and journals is not to review and quote excerpts but simply skip pages of an entire book, and randomize those that are not presented.
Would they demand royalty from Google, for its highly profitable news consolidation business, as they have threatened, and some sued, before they go into bed with Google?
All thanks to the magic of ad dollars and monetizing user info, both of which Apple lacks (or refuses to monetize). Wait till Facebook and Twitter get their act together, and start to compete seriously for those same, finite ad dollars and user info. Google's attractiveness will start to sink like a stone.
The tendency of these companies to arrogate the right to monetize my personal information is one of the reasons why I avoid using their services, as much as possible. With Google for example, as much as I am fascinated with the services, I limit myself to Search, You Tube, and sometimes "Google translate." Similarly, I have personal accounts with Facebook, but after seeing how they track your every move, and their much publicized privacy fiascos. I may at some point go back to Facebook, but not for personal but more for business needs to reach an audience. Let's face it, how can one ignore more that 400 million going 500M target "eyeballs".
Apple Ecosystems
With a net negative variable revenue stream for every user serviced on iOS the impact on reduced total revenue would obviously increase the burden on fixed costs as a service component. So, it is actually you who is business illiterate as it does add fixed costs to netflix to service iOS accounts. Why would continue to offer a iOS client if it is a net loss? The greater number of subcribers that are serviced the greater the net loss to netflix. No other client channel (xbox, blue ray players, smart TV's, android ect.) charges netflix for a service that enhances the value of there devices for free. It makes no sense for netflix to operate under such circumstances, even the marketing and exposure they receive is on iTunes is dwarfed by there existing channels.
Your first assumtion is wrong, making rest of your argument moot.
Where in the world did you get the idea that with apple's 30% cost, each iOS subscribers become a net negative revenue stream?
But Google will also allow publishers control of subscribers' personal data, something Apple has been reluctant to do.
Of course, Android is just a loss leader trojan for collecting personal data and delivering ads. Meeting those goals is all that matters to Google.
I just love how the usual people are buying appleinsider's FUD or gross misrepresentation... That's just too funny (and pathetic).
Schmidt underlined the importance of allowing users the "choice" of how much private information they want to share
Kthxbye.
Again with Google and privacy issues, wait till these publishes etc., start to sell off people's personal information, see who screams then, of course it won't be google's problem they'll just play it off on the app publishers, people never learn.
Maybe you think it's a good idea to have Apple as a middleman between you and the content deliverer. I don't. I see this as great for consumers. A lower cut to Google may translate into a better rate for me. A direct contact with the content provider may result into a discount on the rate for a good customer. Now if you do want to put in a wall, you can always opt-out. With Apple, there is no way to opt-in.
So in the end, like always with Android, it's all about Choice.
This is bullshit, troll. Apple's providing one-click access to customers with credit cards who actually buy things, and lots of them. The idea that they are simply providing payment services and nothing more is bogus.
The irony is they are providing the same "One Click" payment system they licensed from Amazon
Maybe you think it's a good idea to have Apple as a middleman between you and the content deliverer. I don't. I see this as great for consumers. A lower cut to Google may translate into a better rate for me. A direct contact with the content provider may result into a discount on the rate for a good customer. Now if you do want to put in a wall, you can always opt-out. With Apple, there is no way to opt-in.
So in the end, like always with Android, it's all about Choice.
There is no incentive to lower the price when a consumer is already willing to pay that price. That flies in the face of all logic. It's simply more profit for investors.
The real question the big hitters like Netflix and Amazon will have to consider is whether it makes sense to change their entire pricing model to appease Apple. Especially if Netflix or Amazon isn't allowed to charge a lower rate outside an iOS app. I'm guessing either Apple will budge (can't say I recall the last time I've seen that happen) or the developers will pull their apps.
I prefer Netflix pull their app rather than raise prices to cover the 30%. Watching movies on that tiny screen really isn't worth paying any more for. Netflix has already raised their prices since adding streaming.
This is bullshit, troll. Apple's providing one-click access to customers with credit cards who actually buy things, and lots of them. The idea that they are simply providing payment services and nothing more is bogus.
Yes, there are a lot of good things that in-app payments bring for consumers, but the only thing they are providing app developers with is assistance in processing the payment, yet they are are charging 30% for it, making it mandatory in any app that accesses paid content online, and regulating the prices. In the end us consumers still lose if prices go up or if apps are pulled because developers and content providers refuse to meet Apples demands.
Go read some of my other posts unrelated to this topic before calling me a troll. I've defended Apple's actions more than I've criticized them, but I'm not blind and it's not my fault you choose to walk with blinders on.
There is no incentive to lower the price when a consumer is already willing to pay that price. That flies in the face of all logic. It's simply more profit for investors.
I have gotten better subscription rates from some print magazines directly. On others, I have gotten better rates by going through a third party. I don't know what the criteria and economic models are used to make that decision. But with the Google model, if they are paying less to Google, they *could* use it to reduce my purchase price. It's happened in print media. No reason to think it couldn't happen in electronic media.
I get a free book every Friday from B&N on my Nook. I don't know if it's available on their apps as well. But you get the idea. It's not a bad thing for NYTimes to know about me or my tastes in reading. They can tailor the articles they present to me.
For me, Kindle is the key app and if Amazon pulls Kindle from the app store the iPad becomes a doorstop.
I'd guess you're in the minority. Your kind don't even qualify as a rounding error.
From the docs: "They can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription."
However I am unable to find any reference to subscriptions in my iTunes account. Maybe if I had a subscription it would show up under purchase history, but you think it would be a button to manage subscriptions.
Anyone know how that Daily subscription works. I think the free subscription just expired. Does it now auto renew at .99 per week or just stop working?
This is how it is. It's almost like a friendly competition between the two companies. Sometimes they have to pretend to be enemies. As 2pac told biggy, it's just business, nothing personal.
Anyone know how that Daily subscription works. I think the free subscription just expired. Does it now auto renew at .99 per week or just stop working?
Auto renewal will be cancelled if the subscription price is raised.
Simple Arithmetic? If a developer was selling $10 subscriptions to 100 people before the 30% fee that's $1,000. Now if you sell $10 subscriptions to 130 people (30% more unit sales) that's $1300 which makes the publishers take $910. To break even the publisher needs to sell at least 43% more subscriptions on iOS or hike up the price considerably.
The real question the big hitters like Netflix and Amazon will have to consider is whether it makes sense to change their entire pricing model to appease Apple. Especially if Netflix or Amazon isn't allowed to charge a lower rate outside an iOS app. I'm guessing either Apple will budge (can't say I recall the last time I've seen that happen) or the developers will pull their apps.
This is entirely innacurate. You are only dealing with revenues here, and you forget profit margins entirely.
If (In lalaland, sure but if) Amazon for instance has a 40% margin for every e-book (and how I suspect that it does not), the relevant maths are completely different.
A $10 e-book will be sliced to $7 before reaching amazon's coffers. This means that amazon will win $1 for each e-book, not $4, cutting their revenue four-fold.
It means that an e-book sold in iPad is worth 4 times less than sold anywhere else, for amazon.
This is considering a 40% margin. With 50% margin, an iPad book is worth 2.5 times less. But here comes the interesting part: if the margin is 35%, it becomes 8 times less, if the margin is 32%, it becomes 20 times less.
So the real question is, how close to 30% are these corporations' margins? Assuming that they are above such levels of course. The answer will always be "Always too close", because these corporations run at very competitive prices. 30% will always put these companies in the red, or in a very troubling situation.
Even if amazon has a profit in each e-book sold on an iPad this way, they will prefer not to, since selling them in the iPad devaluates them. They will prefer to sell e-books through their online store only, and iPad owners will still buy them there anyway.
There it is! Google continues to do what's good for them while Apple does what's good for them and their customers.
Yes because locking your content to a SINGLE platform via a DRM that you won't allow on competing platforms is a huge win for consumers.
The biggest difference here is that Google's offering is an opt-in. It's not required across any of their platforms, and it doesn't have ANY of the nasty rules that apple's has (price setting).
So a developer can CHOOSE to use this method, or they can CHOOSE to use another method.
Plus, this model also looks like Google will be helping (in part or in full) to manage cross-platform licensing, so that if I buy a game on Android, I could download the same app for free for WebOS as an example. Heck it would even work with iOS if Apple didn't shut everyone out.
This DOESN'T let apple off the hook because this is a service Google is offering to everyone. Apple's is a REQUIREMENT on everything within their ecosystem, effectively forcing their competitors (Amazon, Netflix, Pandora) to shut down and leaving only iBooks, iTunes, and whatever streaming service apple sticks an i in front of .
AKA Apple came out with some shiny new Single Platform content solutions and it couldn't figure out why content creators kept working with companies that offered cross compatibility. So instead of looking at why and adjusting their own offerings accordingly they're locking all competition out so that the only way content creators can access their users is by using Apple's Inferior distribution method.
And yes, it's inferior. If it wasn't, content Creators would be jumping all over it and users would be consuming it. But the reality is that Netflix and Kindle are still the go-to products.
I prefer Netflix pull their app rather than raise prices to cover the 30%. Watching movies on that tiny screen really isn't worth paying any more for. Netflix has already raised their prices since adding streaming.
What's ironic about Netflix raising the price for streaming is they have cut out the US Post Office which was costing them > $400 Million to distribute the DVDs, annually.
So Netflix reclaims that profit loss and then raises the prices to offset the bandwidth fees to companies like Akamai.
In short, Netflix is making a killing since moving to Digital. That 30% means they will be down to a +$280 million this year in increased profits without having to do anything more than distribute digitally.
You're delusional. The install base available to Netflix is > 100 Million with iOS. They aren't going to lose that base. I could care less about Kindle.
Sorry, but your the delusional one.
Just this morning Rhapsody told Apple to smarten the fuck up or they are pulling their app.
Netflix will leave Apple in a heartbeat. They don't need Apple or their platform at all. No content producer does.
It blows my mind how so many believe that Apple has all the cards here. Consumers who want publications, movies, music or any other service will find that service. It's insane to think people are just going to throw up their arms and say "oh well - guess I'll just stay stuck on my iPad with no content or services".
All businesses make mistakes. It's irrational to think that Apple is somehow a Borg entity - with all these geniuses working as a hive mind, calculating every outcome to perfection... Yet 90% of the posters here actually believe that.
Well, if I recall, resistance was not futile. In fact, I believe the Borg were defeated.
Get ready for the massive blowback. Apple is about to be humbled.
What's ironic about Netflix raising the price for streaming is they have cut out the US Post Office which was costing them > $400 Million to distribute the DVDs, annually.
So Netflix reclaims that profit loss and then raises the prices to offset the bandwidth fees to companies like Akamai.
In short, Netflix is making a killing since moving to Digital. That 30% means they will be down to a +$280 million this year in increased profits without having to do anything more than distribute digitally.
Why don't you go and check out their numbers before spouting factually incorrect errors.
First off, a ton of people still use the postal system for DVD's and will continue to do so as long as studio's don't provide streaming rights to new content constantly.
Secondly, in the last quarter of last year they had a TOTAL gross profit margin of 37%. Their NET profit margin was less than 8%. So no, they don't have 30% they can just give up if a customer decides to use an itunes gift card to register instead of going through the site.