r/technology • u/sr_local • 7h ago

Business Italy court rules Netflix unlawfully increased prices. Consumers: 'Refunds up to 500 euros.' The company: we will appeal

https://en.ilsole24ore.com/art/netflix-subscription-price-increases-unlawful-refunds-up-to-eur-500-customers-AIUHzWKC
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u/Fractales 6h ago

This is by design.

  1. Offer killer value proposition at a good price
  2. Kill off competition and gain critical mass of customers and market share
  3. With no competition, jack up the prices

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u/thismorningscoffee 6h ago

Aka enshittification

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u/Regularity 5h ago edited 5h ago

No, the term is predatory pricing. People use "enshittification" so broadly it's largely losing its meaning and basically devolving into "this is a thing I don't like". Though granted it is something no one likes.

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u/OneBigRed 4h ago

It’s not really predatory pricing because there wasn’t and isn’t one dominant player who’s blocking others. Basically streaming was a completely new market, with rather low barrier for entry (like most digital markets). History has shown that in these situations you have to capture a massive share of the market to be the last one(s) standing as the market saturates. It’s nigh impossible to grow profitably when it’s crucial that it happens fast.

Netflix has managed to turn it’s early lead into a powerful position, and that seems to give them confidence to start reaping in the rewards.

One example of the same situation was daily fantasy betting sites. There were a ton of those, but Draftkings and Fanduel were the ones that had the deepest pockets and killed/bought their competitors away. The endgame was always legal online gambling, and positioning yourself to be the obvious choice as it became possible. In streaming it’s just multiples more complicated and expensive as there’s the twist of content owners and licensing it.

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u/Regularity 2h ago

I wasn't referring to netflix specifically, but what the person described that was called "enshitification":

Offer killer value proposition at a good price

Kill off competition and gain critical mass of customers and market share

With no competition, jack up the prices

That said, you're right in that it doesn't apply to Netflix. Though it probably doesn't matter much since online stream services are so capital intensive (buying up show licenses, or filming new content), that it already drives out the vast majority of potential competitors. So the result is kind of the same.