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by cyberax 113 days ago
> So you are saying a company should never reinvest profits in the company to support another money losing business until it’s profitable?

If it makes it impossible to set up a competitor? Absolutely, yes.

> Should Netflix for instance not invested money from renting DVDs to invest in a streaming service?

Netflix was not priced below the cost of production from the beginning. You're confusing sustainable pricing and paying off all the capital spending immediately at launch.

A better example is Doordash when it was heavily subsidized by VC money: https://news.ycombinator.com/item?id=23216852 And it now faces several anti-trust lawsuits.
1 comments
raw_anon_1111 113 days ago
Netflix very much was priced below the cost of production for years and had to borrow money to make Netflix originals.
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cyberax 113 days ago
I'm not familiar with their originals economics, but the original streaming Netflix was not priced below the cost. As evidenced by them keeping the same subscription cost for years.
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raw_anon_1111 112 days ago
How is that “evidence” of anything? The “evidence” that they were charging less for subscriptions than it cost to run the streaming service is that they were borrowing billions of dollars to both license content and create new content over the course of years.

Netflix borrowed $16 billion over a decades

https://www.nytimes.com/2021/01/19/business/netflix-earnings...

Because subscriptions didn’t make enough money to fund its business. Were they being “anti competitive”?

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tovej 112 days ago
Yes. They were. The US just hasn't enforced antitrust laws in decades.
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raw_anon_1111 112 days ago
So now a business shouldn’t be able to borrow money either to start a new initiative? Should they have instead charged customers enough from day one to fund growth? So the first 1000 or so customers should have been charged enough so they could spend an extra $16 Billion?
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cyberax 112 days ago
If they're using their overwhelming size to lock out smaller competitors that can't put up a similar collateral?

Probably a good idea. And it looks like Netflix simply needed to make the service a bit more expensive?

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