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Technology Stocks : Netflix (NFLX) and the Streaming Wars
NFLX 1,113-3.6%Nov 14 9:30 AM EST
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To: Krigannie who wrote (1255)12/31/2015 10:47:48 AM
From: TimF   of 2280
 
I agree that the first mover advantage is often hugely overrated. (Although I wouldn't say its quite worth zero.)

As for Standard Oil it doesn't control the oil market partially because it was broken up. But the companies it was broken up in to don't control the oil market either. Its successor companies, currently Exxon-Mobil, Chevron, Sunoco, Marathon Petroleum, Marathon Oil, Union Tank Car Company, Buckeye Partners, and other companies that became parts of BP, Royal Dutch Shell, Ashland Inc, and Unilever (see en.wikipedia.org collectively have a lot of revenue and profit, but national oil companies have larger reserves and also get a lot of the revenue from the world oil market. You also have other private companies that aren't successors of Standard Oil. Also even before the breakup Standard Oil had been slowly losing market share for a long time.

Even a lower-price ad-free tier probably wouldn't work if NFLX had to lower the price so far that the ad revenue couldn't make it up.

If few people want to pay for an ad supported version even with a discount, then you don't necessarily have to hugely discount it you just have as a minority of your subscriber base. But then if its too few you don't make much from the ads (since few people are watching them) so again it might not be worth it. Also you might worry current subscribers who might think that it all will move towards add supported over time (whether or not such a change is actually likely).
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