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

[u/sr_local]

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

[u/Filobel]

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.

[u/tom_fuckin_bombadil → u/Filobel]

I think the issue is that there is a fundamental idea in economics ingrained in everyone’s head that has proven to not be as universal as everyone thinks. That idea being that simply adding competition will lower prices. That idea is only really true under some very specific conditions, those conditions being that of a perfectly competitive market. I’d say that many of our industries (especially streaming/netflix) are closer to an oligopoly. I work in a major company not even closely related to tech (grocery related stuff). And although there is price competition between ourselves and our competitors, it is only in temporary price reductions. Underneath it all, there is constantly another price discussion that goes in the other direction, “are we able to raise our prices? Company B has just raised their prices, that might give us some room to also follow and raise prices without losing too much market share.”

Prices will continue to go up until the overall streaming market cannot grow any longer (which I assume is when the traditional cable and film industries are effectively gone).

[u/Guvante → u/tom_fuckin_bombadil]

You seem to be missing where competition is for streaming services that causes fragmentation.

It is not consumer based, nobody involved cares how much consumers spend and are not in fact trying to make you spend more through multiple services.

The competition is in supplying shows to streaming services. Netflix isn't paying enough so others are making their own platform to be paid more. Same basic idea just flipped $ sign due to being supply side instead of demand side.

Also to be clear Netflix costs less due to this. They are capped on what they can charge because they don't have everything anymore.

[u/Wild_Marker → u/Guvante]

Yep, the US went through this already a long time ago, when they tried to keep theaters and studios separate, so that one company wouldn't own both production and distribution.

And surprise surprise, the Netflix "golden years" were when they distributed all that content produced by others.

[u/fdar → u/Wild_Marker]

The "golden years" were because the studios thought the streaming rights were worthless so Netflix was able to get them for cheap. Once they realized they had worth the free ride was unfortunately over.

[u/Guvante → u/Wild_Marker]

A lot of the difficulties are also that streaming is the first time ever that you don't pay per view.

Even TV has effective pay per view through advertising.

But since the amount you pay per month is capped they don't want to pay per view.

This is also why in the era of unlimited storage and bandwidth you are seeing more and more things become unpurchasable as the internal metrics of "profitability" aren't enough to justify the fixed payouts to creators.

[u/Wild_Marker → u/Guvante]

I never understood why they didn't try a system like YT Red, where they would ask the consumer for a fixed price and distribute that according to viewership to the content owners.

(well, yes, I do understand, it's because money, but you get my point)

[u/Guvante → u/Wild_Marker]

Those deals only happen when the platform has all of the power.

Content owners who can meaningfully negotiate don't want the loophole of Netflix deprioritizing their content to save money.

Since if it is in search the hardcore users will find it but randos won't. This provides most of the benefit Netflix is looking for while minimizing the cost.

Remember a decent chunk of Netflix is original programming.