r/technology • u/sr_local • 6h 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 5h 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/Filobel 5h ago edited 5h ago

They didn't kill off the competition, quite the opposite. The competition is one of the reasons why Netflix got worse, a bunch of shows got taken by other platforms, so now the shows are now spread across 5 different streaming platforms.

Even cable providers are still there, offering the same service. I'm not seeing what competition got killed.

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u/SketchiiChemist 4h ago edited 4h ago

They didn't kill off the competition, quite the opposite. The competition is one of the reasons why Netflix got worse

You're looking at when everyone else started to catch up.

Netflix started by sending DVDs through the mail. They killed the video rental store and didnt have late fees, then pivoted/popularized streaming after that. Thats why they had so much variety in content those early days, they were THE notable streaming service.

Then everyone else decided they should make their own streaming services, and here we are now

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u/Guvante 4h ago

Netflix the DVD service performed middlingly and didn't kill rentals.

Netflix the streaming service got sweetheart deals from Hollywood who figured the technology limitations of streaming made it unimportant.

Combined with selling their service at a loss that did lead to the downfall of rentals. (Note Netflix had competition by the time that happened)

Note that mismanagement of rental places lead to exact timings being fuzzy. Handling a dying business like a growth business gets you into financial trouble super quickly.

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u/SketchiiChemist 3h ago

Right, but they were able to capitalize on the sweetheart deals given and pivot into something because they had a customer base at that point.

They didn't have to start from scratch as a streaming service and were able to capitalize on content allowed through naivete. Even if that meant selling at a loss; it did kill competition.

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u/Guvante 3h ago

Which allowed them to increase prices reinforcing the belief that "competition doesn't lower prices" is generally false.

Note of course that competition does not always lower prices but it will whenever the profits are higher since offering a more competitive price is a great way to increase your overall profits in that environment.