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Tony Gentile

Mike, you rock - thanks for the heads-up on this... something I've been talking to NFLX about for 2+ years. Glad to see it finally happen.



I think this conference we saw an energized and more enthusiastic CEO who's seeing some a lighter future. I found it humorous that they now call the price increase the "1 Billion dollar market cap mistake". I feel their pain (with my own savings unfortunately). Incidentally, I don't agree with the 18$ price or the 22$ price. 20$ is better IMO, or possibly lower if they drop "unlimited" from the plans.

Other interesting notes:
1) Netflix expects Amazon to launch UK operation first on account of 1 shipping center covers the whole country. This is expected to come soon.
2) Netflix staked a new target in the ground, which was to grow by more subscribers then any competitor next year.
3) Hints that competition has opened the innovation floodgates.
4) The new friends system is FUN! It was funny to hear how he said that.
5) Minimization of the impact of the postage increase.
6) Reed stated that by being early to the market, Netflix has already picked up the easy to please customers who are naturally satisfied with the model, and that competition in comparison will have a harder to please subscriber base.

I AGREE WITH #6 FULLY. Plan limits would amplify the effect by sending the wolves to the clover patches of our inexperienced and distraught fluffy bunny competitors. The buffet model is an abusable, inequitable system and doomed for collapse. When 1 company switches to limits, the rest will be forced to follow (eventually and with pain but still hesitation). The mental assumption that online rental functions best with an unlimited clause is an example of groupthink that will be shattered. Or maybe not, in which case it'll probably never be provable that I'm wrong and I'll hide under that umbrella forever. muhahahaha.


If NFLX has picked out the easy-to-lease customers, what are they going to do with the rest of the 8 million or so customers they are aiming for?
I see airlines engaged in a fight to death. No reason why the same cannot continue in video rental.


Please explain your point. The airline industry is a book in itself. I know they dropped prices in the 80s or so and saw massive increases in ticket sales. Profits have been a struggle for all but a few of the newer boutique airlines, but it is my understand that SouthWest and others have benefited primarily from cost-structure advantages.

I find it hard to find a relevant lesson about pricing to be taken from the airlines. But I'm interested to hear one.


I think even southwest is having trouble now. My point is that with airlines, if one entity wants to come up for air by raising the price even marginally, you'd think everyone would breathe a sigh of relief and go along. Not so. That particular airlines rescinds the fees after a few days when others don't follow. You'd think businesses would act according to some obvious logic but that doesn't seem to be the case.

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