Tag Archives: netflix

Business/Economics, Technology, U.S.

What Economic Recovery? Netflix says 2012 will be so bad they will not make any profits. Looking to investors to float them. Blame competition & inflation

Netflix announced on November 21, that they do not expect to make a profit in 2012.  The on demand movie service went from having $366 million in cash, to almost nothing predicted for 2012.

Netflix officials blame it on several things; a huge subscriber loss, increased competition and a huge jump in licensing fees (inflation).

Like most of Corporate America, Netflix thought it could trick its customers into paying more for less. It backfired, company officials now estimate they will lose one million subscribers as a result.

Netflix says it’s seeing a jump in competition, not just from Hulu and Redbox, but from Amazon and Google.

Now comes the licensing fees.  In 2010 Netflix paid $180 million, now that’s jumped to $2 billion for 2012!!!  Company officials say they can not pay the fee upfront and will have to spread payments out over several years.

Under text book economic rules Netflix should pass on the increased licensing fees to its customers, but they already tried that and lost a huge amount of customers.  Netflix will try to ride out 2012 by issuing a crap load of stocks and bonds.  They hope they can get investors to buy at least $400 million worth of stocks and bonds, even though they admit they’re not going to make any profit for 2012.

 

Business/Economics, International, Technology, U.S.

Corporate Incompetence: Netflix says internet speeds in the United States sucks!

Earlier this year Netflix tested internet connection speeds in several countries, the United States sucked!

Apparently Netflix ranked the U.S. at 32.  Countries like Canada did much better.

The thing is that much faster connection speeds are available in the United States, it’s just that most people can’t pay the outrageous fees.  Also, most internet service providers don’t guarantee a faster connection rate, their fine print misleadingly says “speeds up to”.  This means they aren’t able to consistently provide faster connection speeds.