"'If you cut back on service, you are going to lose your subscriber base,' said Hank Breeggemann, general manager of Netflix’s DVD division[...]"
I wonder what it cost them in subscribers when they ended Saturday deliveries a year. They arguably reduced the value of their disc subscriptions by 16-17% without altering the monthly fee.
It's not surprising it's still profitable, based on some back of the envelope math, they're number of subscribers is only 26% (20 million to 5.3 million) of their high but their employee headcount is 17% of its high (50 hubs x 100 employees vs. 33 hubs x 25 employees). Not accounted for is how many of those subscribers has, like me, opted for a cheaper plan (e.g. 2 at a time from 3 at a time). My hunch is the costs of adding discs (and replacing damaged ones) have gone down (fewer subscribers need fewer discs plus disc costs have remained steady or even gone down) while adding streaming titles has probably gone up as there are more competitors including ones who will pay for exclusives.
I hope it survives pretty much as-is, at least until the total streaming market can compete in terms of catalog size. 93,000 DVD titles is about an order of magnitude greater than any one streaming service's catalog and most of what's in one streaming catalog is available in another.
So of the 93000 say about 80K of them are not currently streamable. At reasonable compression for streaming those would take about 160TB to store. Are they just not ripping them because of legal issues? Does piracy just get to win every argument? Hell, Netflix could write a client and let people rip them and upload them back to Netflix for some kind of Netflix points.
I like to hope that a couple of the massive companies that have run against these kinds of legal problems have gone ahead and secretly ripped everything anyways, and sent it off to a secret Foundation, to weather the onset of our new intellectual property dark ages...
I wonder what it cost them in subscribers when they ended Saturday deliveries a year. They arguably reduced the value of their disc subscriptions by 16-17% without altering the monthly fee.
It's not surprising it's still profitable, based on some back of the envelope math, they're number of subscribers is only 26% (20 million to 5.3 million) of their high but their employee headcount is 17% of its high (50 hubs x 100 employees vs. 33 hubs x 25 employees). Not accounted for is how many of those subscribers has, like me, opted for a cheaper plan (e.g. 2 at a time from 3 at a time). My hunch is the costs of adding discs (and replacing damaged ones) have gone down (fewer subscribers need fewer discs plus disc costs have remained steady or even gone down) while adding streaming titles has probably gone up as there are more competitors including ones who will pay for exclusives.
I hope it survives pretty much as-is, at least until the total streaming market can compete in terms of catalog size. 93,000 DVD titles is about an order of magnitude greater than any one streaming service's catalog and most of what's in one streaming catalog is available in another.