Netflix And Virtue Signalling

[Xerographica]

Oh yeah, I did see that... but that was regarding a scenario where the money was not given to the content producers. Clearly there'd be less of an incentive for people to be honest with their valuations if they knew that Netflix would simply override/overrule them.

The money wouldn't necessarily be given to the content producers anyway - it would go to the people who own the IP. Netflix can't change that. Even if it did and even if we assume people didn't just lazily dump the fee into the first thing they see because they get to access everything anyway, money spent wouldn't necessarily reflect demand.

It feels like you're focusing on the word "demand" rather than on the "money spent" part. For me it's significant and meaningful and important and useful to know how much money people are willing to spend on things. It's convenient to use the word "demand" to refer to the amount of money that people are willing to spend on things. But we can also use the letter "X" or the word "fhqwhgads" or "zeitgeist" or any other combination of letters you want. I'm less interested in the word than in the concept. So it would be great if you focused on the concept.

Spending money is a sacrifice. The more money that is spent, the bigger the sacrifice. Since spending money is a sacrifice... generally people don't randomly spend their money. They didn't exchange their limited time and effort for money just so that they can flush it down the toilet.

It's easy to prove this... all I have to do is ask for your money. Of course you're going to want to know why you should give me any money. So in order to persuade you to give me your money, I'd have to provide you with some information. You'd compare the information that I gave you with all the information that you have and then decide whether or not to give me money. If you decided not to give me any money, well, in theory I could endeavor to provide you with different and better information. And again you'd compare this new information with all your information in order to decide whether to give me money.

This process of persuasion involves lots of brainpower being used and lots of information being shared, considered and compared. So it's significant and meaningful and important to know how much money individuals and groups of individuals are willing to spend.

Distributing the fee to the content does not guarantee that more such content will be made. Fans of Star Trek TNG could regularly dump their whole fee into the show but it's not going to be renewed for another season regardless. The show has long been finished. Netflix isn't Patreon. The money doesn't go to fund content. As such there is no sense is spending the fee into order to voice demand, and I'd expect user behaviour to reflect this.

I was disappointed that Person of Interest was canceled...

As CBS’s chairman, president, and CEO Leslie Moonves told The Hollywood Reporter recently, the company “broke even” on Person of Interest last year, but because Warner Bros., not CBS, profits from the show’s back end (DVD sales, foreign rights, streaming, syndication), it was literally not worth it to renew the show. - Kate Aurthur, “Person Of Interest” And The Mysteries Of Cancellation

It was canceled despite the fact that nobody knew how much money that I was willing to spend on the show. And I suppose this could potentially sound egocentric. So let me zoom out. It was canceled despite the fact that nobody knew how much money that any subscribers were willing to spend on the show. This fact makes me acutely feel like I'm living in the stone ages. Where I have to go around trying to convince people that fire and wheels are useful. I'm extremely grateful that I live in an era where I don't have to try and convince anybody that fire and wheels are useful... but I'm also extremely disappointed that I live in an era where I do have to try and convince everybody that it's useful to know how much money people are willing to spend on things.

Consider how much better off your life is because you live in an era where everybody knows that fire and wheels are useful. Now double or triple or quadruple that amount of betterness to try and appreciate how much better off your life would be if you lived in an era where everybody knows that it's essential to know how much money people are willing to spend on things.

Admittedly I have absolutely no idea how much money everybody would be willing to spend on Person of Interest... so of course I can't guarantee that, if ignorance (of willingness to pay) had been eliminated, the show would have been continued rather than canceled. But I can guarantee that the deciders, whoever they were, would have made a far more informed decision.

The world will be infinitely better off when everybody makes far more informed decisions.

No. That the one rich guy spent 6000 times more does not mean the demand is 6000 times greater. It just means he can afford to spend more. Even if he does want it more, so what? That one rich guy is still just one guy.

Let's imagine that people could choose where their taxes go. Some people want to go to war with Canada. The shape of the demand looks like this...

What would you say about the shape of the demand? I'd say that it's certainly tall enough... but it's way too skinny. Too few people are truly willing to pay for war with Canada. Sure, these few people are willing to pay a lot... but that really doesn't overrule the fact that there aren't nearly enough of them to justify this particular use of their tax dollars. So the DoD would use the money for other things besides invading Canada.

Using technical terms I'd say that the breadth of the demand is insufficient. The shape is too skinny. The fatter (wider) it is... the greater the justification for using those tax dollars to attack Canada.

In terms of the public sector, being concerned with the shape of the demand makes sense because the point of taxes really isn't to spend them on things that only a relatively few people are going to benefit from. We really don't want rich people to be able to spend their taxes on private golf courses or private yachts or private airports. We want everybody, rich or poor, to spend their taxes on things that lots of people are going to benefit from. Maybe like healthcare?

The shape isn't super tall... but it's pretty fat. There's definitely more than enough demand breadth to justify these tax dollars being spent on healthcare. Although perhaps it's not quite correct to compare something more general (healthcare) with something more specific (war with Canada). It would probably be more correct to compare war with Canada to cancer research. We can reasonably guess that the demand for the latter would be far broader than the demand for the former.

In any case, it certainly makes sense to consider the shape of the demand when we're talking about tax dollars. The thing is, we really weren't talking about tax dollars. We really weren't talking about the public sector. We were talking about donors to the Libertarian Party using their donations to signal the value of the potential convention themes. Yet, you definitely thought that the shape of demand was very relevant!

If the entire point of the public sector is to have a space where it's unacceptable for money to be spent on things that will only benefit a few people... then it's gotta be the case that the entire point of the private sector is to have a space where it is entirely acceptable for money to be spent on things that will only benefit a few people.

If one person alone wants to spend enough money to choose the theme for the Libertarian Party convention... then that's entirely acceptable. If one person alone wants to spend enough money to prevent Person of Interest from being canceled... then that's entirely awesome. If one person alone wanted to spend enough money to pay for the Statue of Liberty's pedestal... then that also would have been entirely awesome.

Thanks for sharing that video. I watched it... it's a great political video... but it didn't have a lick of economics. In economics gauging what people want is all about willingness to pay (WTP). It's not at all about what people say they want... it's all about how much money people are willing to spend on things. Because talk is cheap.

Willingness to pay reflects ability to pay, and as such is not a measure of demand. One cannot be willing to pay money one doesn't have, regardless of whether one wants something.

If somebody is completely broke then clearly we can't know how much money they'd be willing to spend on defense, healthcare, Person of Interest, the Statue of Liberty's pedestal, food, clothes, computers or anything else. Homeless people don't have much or any money... this is certainly true. But does this really mean that we can't know the demand for anything? Does it really mean that it's irrelevant how much money people are willing to spend on things? Markets should be entirely discarded and replaced with... voting? I'm sure that this is not what you're suggesting... yet you're bringing up ability to pay as if it would somehow only be relevant to donors to the Libertarian Party using their donations to signal the value of potential convention themes. Actually, the ability to pay (or the lack thereof) is relevant to all markets. So if you're arguing that it invalidates the spending info for one market... then your argument has to be applicable to all markets.

If we prevent people from using their money to help determine the value of things... then things will be incorrectly valued. When things are incorrectly valued, things will be incorrectly used. When things are incorrectly used, people will be worse off. Therefore, the degree and extent to which people are currently worse off... reflects the degree and extent to which we prevent people from using their money to help determine the value of things.

Right now you believe that the products at your grocery store are going to be correctly continued or discontinued because shoppers are allowed to use their money to help determine the value of the products.

Yet you also believe that the shows on Netflix are going to be correctly continued or canceled despite the fact that subscribers aren't allowed to use their money to help determine the value of the shows.

And of course you don't believe that Netflix can read the minds of its subscribers. Instead, you believe that subscribers already provide enough information for Netflix to make adequately informed decisions. But even Netflix acknowledges that ratings are less trustworthy than viewing habits. Except, how can viewing habits be more trustworthy than spending decisions? And it's not like Netflix can compare the two sets of information. It doesn't even see the point in having the information about spending. And there isn't a single subscriber who is interested in providing this information. Except for me. And one of my friends. I suppose there might be a few more people out there who would see the point of using their fees to inform Netflix. In any case we certainly aren't the rule.

The idea of using our money to inform each other sounds so simple and solid. We already do use our money to inform each other. We subscribe to Netflix. This informs everyone that we value Netflix's content more than we value the alternative uses of our money...

Netflix's content > alternative uses

We clearly and obviously empower Netflix to compete society's limited resources away from less valuable alternative uses. Yay!!!!!

There's one very basic premise here: we don't equally value Netflix and the alternatives. Except, this is just as true for Netflix's content! Nobody equally values Netflix's content.

If we could spend our fees on our favorite content, then this would inform Netflix that we value our favorite content more than we value the alternative uses of our fees...

favorite content > alternative content

We would clearly and obviously empower the producers of our favorite content to compete society's limited resources away from the producers of less valuable content. Yay!!!!!!!!! Yay?

People get excited about finding a $100 dollar bill on the sidewalk...and graduating... and getting engaged... and having a baby... and getting a promotion... and writing a bestseller... and winning the lottery. Yes, these things and many more are very reasonable justifications for excitement. But in the grand scheme of things.... all of these things are subordinate to empowering more beneficial producers to compete society's limited resources away from less beneficial producers. Therefore, nothing should excite us more than markets. We should be the most excited about markets because they facilitate the most excitement. If Netflix was a market... then we'd be able to use our fees to inform everyone how excited we are about our favorite shows. Netflix and other producers would be able to use this information to supply even more exciting shows. Yay!!!!!!!!!

[Galloism]

It's convenient to use the word "demand" to refer to the amount of money that people are willing to spend on things.

Not if you like economics. Then, it's a particularly confusing way to use the term. It would be like someone using the term "flow rate" to refer to water tank holding capacity.

Spending money is a sacrifice. The more money that is spent, the bigger the sacrifice. Since spending money is a sacrifice... generally people don't randomly spend their money. They didn't exchange their limited time and effort for money just so that they can flush it down the toilet.

Which is why your proposal for Netflix involves no sacrifice.

You have yet to name any way Tom sacrificed more than Bob, and I've given you plenty of opportunities. What did Tom sacrifice compared to Bob, Xero? What did he lose? How much? HOW MUCH Xero? Compared with Bob, what has he lost Xero? This is going to be like the "pragmatarian corporation" isn't it? You're just going to ignore the fact that you have no answer and hope it goes away.

Right now you believe that the products at your grocery store are going to be correctly continued or discontinued because shoppers are allowed to use their money to help determine the value of the products.

Incidentally, I don't know about the big box stores, but small groceries stores don't really think much about idealistic margins. I know - I've done books for them. They sell Bob's meats at a certain price, knowing it's an acceptable margin for their store. If Bob comes around with his meat once a week, and they sell out in 2 days, they order 2 or 3 times the meat the next time. Meanwhile, if half the meat spoils, they order half the meat next time - even if the customers buying it are paying a super high premium for it.

This is because, if they've got so much that it's spoiling and can't sell it, they can increase their margin buy buying less of it, even if you personally value it highly and overpay for it. They don't buy based on what people are paying for it - they buy based on how much it's being consumed. Other than "I gotta sell this at a certain price point to make an acceptable profit", what people "pay" for it doesn't come into play at all.

Yet you also believe that the shows on Netflix are going to be correctly continued or canceled despite the fact that subscribers aren't allowed to use their money to help determine the value of the shows.

Well, if they think like a grocery store, they wouldn't take that into account at all. They'd measure to see how much is being consumed, and acquire more of that which is being consumed more.

Oh wait, I think that's what you said they're doing now.

The idea of using our money to inform each other sounds so simple and solid. We already do use our money to inform each other. We subscribe to Netflix. This informs everyone that we value Netflix's content more than we value the alternative uses of our money...

I guess, in the way that if you see a plane with its landing gear down, that informs everyone that it's either just taken off or about to land, but communicating that information to nearby people was never the intent of having the landing gear down, so you're ascribing too much information to too little input and inferring meaning where alternate meanings are every bit as reasonable.

If we could spend our fees on our favorite content, then this would inform Netflix that we value our favorite content more than we value the alternative uses of our fees...

Again, someone told me that without sacrifice, communication is empty, and this involves no sacrifice. You can't name one thing Tom's sacrificed compared with Bob, at least not yet.

[Xerographica]

It also really doesn't seem like the Netflix model is a good place to start for Xero. If we accept the premise that you should pay what you value (I don't, but lets work from there) it doesn't make sense to have a fixed-cost subscription fee. After all, what if you get more than $10 worth of value?* You should pay for each individual episode/movie that you watch, ala the iTunes / Google Play model.

Heh... you really went the wrong direction.

Let's think of Netflix as an island. You gotta pay a fixed price to visit the island. But none of the shows and movies on the island have a fixed price. Subscribers can spend their fees on their favorite content. Because Netflix actually knows the value of its specific content... it would be able to supply more valuable content. It would earn more money and compete resources away from other islands... like Amazon.

Amazon makes the smart decision to allow its subscribers to spend their fees on their favorite shows and movies. Except... it doesn't stop there... it charges its subscribers a little more and combines Amazon Prime with Amazon Kindle Unlimited.

Netflix made more money because it could see whether nature documentaries are more valuable than horror movies. With this same logic... Amazon will be able to make even more money because it will be able to see whether nature documentaries are more valuable than horror movies or romance novels or crime novels. As a result, Amazon island will become larger than Netflix island.

But then everybody will clearly see the relationship between...

A. the variety of digital goods
B. revenue

So the relevant companies are all going to try and supply their subscribers with movies, shows, books, articles, music and software/games. Whichever company is the best at doing so will be a very very very large island. Everybody will pay the same price to visit the island... but none of the digital goods on the island will have a fixed price.

This is the right direction because there will be less and less products that have a fixed price. You wouldn't pay a fixed price for a novel and you wouldn't pay a fixed price for a computer game. Instead, you'd divide your money between the novel and game according to how relatively valuable they are to you.

[Soldati Senza Confini]

This is the right direction because there will be less and less products that have a fixed price. You wouldn't pay a fixed price for a novel and you wouldn't pay a fixed price for a computer game. Instead, you'd divide your money between the novel and game according to how relatively valuable they are to you.

This is a stupid way to do business.

Businesses wouldn't be able to function like this if we suddenly declared that you only pay the amount of money you valuate the product at instead of us being able to run a fixed profit where the only variable is the volume of sales or jobs we take to make the money we need to operate + profits.

[Galloism]

This is the right direction because there will be less and less products that have a fixed price. You wouldn't pay a fixed price for a novel and you wouldn't pay a fixed price for a computer game. Instead, you'd divide your money between the novel and game according to how relatively valuable they are to you.

This is a stupid way to do business.

Businesses wouldn't be able to function like this if we suddenly declared that you only pay the amount of money you valuate the product at instead of us being able to run a fixed profit.

I mean, it's essentially an extreme gift economy with lots of approval paper.

[Saint Jade IV]

But why should you have access to all the content, if you are only allowing your money to be directed towards your own preferences?

Netflix provides a specific service. If you only wish to spend your money on content that exactly matches your preferences, use iTunes.

But I can't make an accurate valuation of content before I've even watched it.

First I watch some content, and then I can make an informed decision about how closely it matches my preferences. I'd spend my fees to share this information with Netflix. Then Netflix, and the producers, would have the information they need to provide content that more closely matches my preferences.

It's called "previews".

[Xerographica]

This is the right direction because there will be less and less products that have a fixed price. You wouldn't pay a fixed price for a novel and you wouldn't pay a fixed price for a computer game. Instead, you'd divide your money between the novel and game according to how relatively valuable they are to you.

This is a stupid way to do business.

Businesses wouldn't be able to function like this if we suddenly declared that you only pay the amount of money you valuate the product at instead of us being able to run a fixed profit where the only variable is the volume of sales or jobs we take to make the money we need to operate + profits.

If consumers all suddenly become vegetarians... then producers should quickly adapt and adjust accordingly. If consumers all suddenly become very concerned with the environment... then producers should quickly adapt and adjust accordingly. If consumers suddenly become very interested in Australian comedies... then producers should quickly adapt and adjust accordingly. If consumers suddenly become very interested in Norwegian dramas... then producers should quickly adapt and adjust accordingly. If consumers suddenly become very interested in shows about epiphytes... then producers should quickly adapt and adjust accordingly.

If consumers zig... so should producers. If consumers zag... so should producers.

Producers exist to serve consumers... not the other way around.

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident that it would be absurd to attempt to prove it. But in the mercantile system the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce. - Adam Smith, Wealth of Nations

It is sufficient if all firms are slightly different so that in the new environmental situation those who have their fixed internal conditions closer to the new, but unknown, optimum position now have a greater probability of survival and growth. They will grow relative to other firms and become the prevailing type, since survival conditions may push the observed characteristics of the set of survivors toward the unknowable optimum by either (1) repeated trials or (2) survival of more of those who happened to be near the optimum - determined ex post. If these new conditions last "very long," the dominant firms will be different ones from those which prevailed or would have prevailed under other conditions. - Armen Alchian, Uncertainty, Evolution, and Economic Theory

If Netflix subscribers can spend their fees on their favorite content, then it will be easier for producers to see and know exactly where the new optimum is. The speed at which producers adapt and adjust to the new optimum will determine their revenue.

[Xerographica]

You have yet to name any way Tom sacrificed more than Bob, and I've given you plenty of opportunities. What did Tom sacrifice compared to Bob, Xero? What did he lose? How much? HOW MUCH Xero? Compared with Bob, what has he lost Xero? This is going to be like the "pragmatarian corporation" isn't it? You're just going to ignore the fact that you have no answer and hope it goes away.

If a Netflix subscriber spent their fees on shows about epiphytes... then they'd sacrifice the opportunity to spend their fees on shows about animals.

Well, if they think like a grocery store, they wouldn't take that into account at all. They'd measure to see how much is being consumed, and acquire more of that which is being consumed more.

How can a grocery store measure how much is being consumed? Seriously? Just because something is purchased doesn't guarantee that it will be consumed in its entirety. What the grocery store knows is the amount of money that is spent on its products. Netflix doesn't know this... but it should know this.

And still, you have yet to provide a single example where you voluntarily and regularly spend your money on something that really doesn't match your preferences. You said that gas is an example but then it really seemed like you were saying that you didn't have a choice in the matter. Or, you didn't have much of a choice in the matter. So it's not a relevant example. I want an example where the choice is entirely yours. Your choice shouldn't be even vaguely coerced by others or circumstances that are out of your control.

Right now Netflix regularly spends some of your fees on content that really does not match your preferences. You think this is beneficial and desirable yet you have not been able to provide a single example in your life where you willingly and regularly spend your money on something that really doesn't match your preferences.

All available evidence leads me to believe that pragmatarianism really does not match your preferences. So if each month you willingly gave me $5 dollars... then this would be a super solid example of you willingly and regularly spending your money on something that really doesn't match your preferences. But are you seriously going to give me $5 dollars each month? Of course not. You're not crazy. Only crazy people willingly and regularly spend their money on something that really doesn't match their preferences. Then again, here you are arguing that it's beneficial and desirable for your Netflix fees to be spent on content that really doesn't match your preferences.

[Izandai]

This is a stupid way to do business.

Businesses wouldn't be able to function like this if we suddenly declared that you only pay the amount of money you valuate the product at instead of us being able to run a fixed profit where the only variable is the volume of sales or jobs we take to make the money we need to operate + profits.

If consumers all suddenly become vegetarians... then producers should quickly adapt and adjust accordingly. If consumers all suddenly become very concerned with the environment... then producers should quickly adapt and adjust accordingly. If consumers suddenly become very interested in Australian comedies... then producers should quickly adapt and adjust accordingly. If consumers suddenly become very interested in Norwegian dramas... then producers should quickly adapt and adjust accordingly. If consumers suddenly become very interested in shows about epiphytes... then producers should quickly adapt and adjust accordingly.

If consumers zig... so should producers. If consumers zag... so should producers.

Producers exist to serve consumers... not the other way around.

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident that it would be absurd to attempt to prove it. But in the mercantile system the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce. - Adam Smith, Wealth of Nations

It is sufficient if all firms are slightly different so that in the new environmental situation those who have their fixed internal conditions closer to the new, but unknown, optimum position now have a greater probability of survival and growth. They will grow relative to other firms and become the prevailing type, since survival conditions may push the observed characteristics of the set of survivors toward the unknowable optimum by either (1) repeated trials or (2) survival of more of those who happened to be near the optimum - determined ex post. If these new conditions last "very long," the dominant firms will be different ones from those which prevailed or would have prevailed under other conditions. - Armen Alchian, Uncertainty, Evolution, and Economic Theory

If Netflix subscribers can spend their fees on their favorite content, then it will be easier for producers to see and know exactly where the new optimum is. The speed at which producers adapt and adjust to the new optimum will determine their revenue.

Netflix already has the best possible way to determine what kinds of shows and movies it should get licenses for: how many people watch those shows and movies. If Netflix sees that there's an uptick in how many people are watching romantic comedies, that's a clue that maybe it should license more romantic comedies. Giving people the ability to allocate a limited number of votes among the things they watch will not improve Netflix's ability to respond to those sorts of demographic shifts, and in fact would probably result in misleading data for reasons that have already been explained.

[Izandai]

You have yet to name any way Tom sacrificed more than Bob, and I've given you plenty of opportunities. What did Tom sacrifice compared to Bob, Xero? What did he lose? How much? HOW MUCH Xero? Compared with Bob, what has he lost Xero? This is going to be like the "pragmatarian corporation" isn't it? You're just going to ignore the fact that you have no answer and hope it goes away.

If a Netflix subscriber spent their fees on shows about epiphytes... then they'd sacrifice the opportunity to spend their fees on shows about animals.

Well, if they think like a grocery store, they wouldn't take that into account at all. They'd measure to see how much is being consumed, and acquire more of that which is being consumed more.

How can a grocery store measure how much is being consumed? Seriously? Just because something is purchased doesn't guarantee that it will be consumed in its entirety. What the grocery store knows is the amount of money that is spent on its products. Netflix doesn't know this... but it should know this.

Grocery stores don't care if you eat all of everything you buy. They just care what you buy and how much of it. Unrelatedly, Netflix doesn't care how much content you watch using its service, only that you don't cancel your subscription. Netflix don't care about maximizing the quality of its service for you specifically, it wants its service to be "good enough to pay the asked fee for" to as many people as possible. It accomplishes this by having as wide a selection of content in its library as possible.

And still, you have yet to provide a single example where you voluntarily and regularly spend your money on something that really doesn't match your preferences. You said that gas is an example but then it really seemed like you were saying that you didn't have a choice in the matter. Or, you didn't have much of a choice in the matter. So it's not a relevant example. I want an example where the choice is entirely yours. Your choice shouldn't be even vaguely coerced by others or circumstances that are out of your control.

Why the hell would anyone pay for something they neither want nor need?

Right now Netflix regularly spends some of your fees on content that really does not match your preferences. You think this is beneficial and desirable yet you have not been able to provide a single example in your life where you willingly and regularly spend your money on something that really doesn't match your preferences.

It's good that Netflix licenses stuff that I don't want to watch because having as great a variety of content on its platform as possible makes it less likely that it goes bankrupt. I may not be able to watch absolutely everything I would like to watch on Netflix, but if Netflix dies I won't be able to watch anything I would like to watch on Netflix. Because there would be no more Netflix.

All available evidence leads me to believe that pragmatarianism really does not match your preferences. So if each month you willingly gave me $5 dollars... then this would be a super solid example of you willingly and regularly spending your money on something that really doesn't match your preferences. But are you seriously going to give me $5 dollars each month? Of course not. You're not crazy. Only crazy people willingly and regularly spend their money on something that really doesn't match their preferences. Then again, here you are arguing that it's beneficial and desirable for your Netflix fees to be spent on content that really doesn't match your preferences.

If you believe that only crazy people buy stuff they neither want nor need, why do you advocate that people pay more than they have to for stuff? That's the same as buying literally nothing. And no one wants or needs nothing.

[Xerographica]

Netflix already has the best possible way to determine what kinds of shows and movies it should get licenses for: how many people watch those shows and movies. If Netflix sees that there's an uptick in how many people are watching romantic comedies, that's a clue that maybe it should license more romantic comedies. Giving people the ability to allocate a limited number of votes among the things they watch will not improve Netflix's ability to respond to those sorts of demographic shifts, and in fact would probably result in misleading data for reasons that have already been explained.

But it's entirely possible that more people are watching romantic comedies simply because they ran out of better things to watch. In this case should Netflix supply more romantic comedies? Of course not. In all cases Netflix should supply the types of shows/movies that people are most interested in watching. And the only way that Netflix can possibly know which types of shows/movies people are most interested in watching, is to allow subscribers to spend their limited fees on their favorite content.

Determining what's truly most important/valuable/vital/urgent can only be accomplished by each and every person prioritizing how they spend their limited money.

[The Two Jerseys]

It also really doesn't seem like the Netflix model is a good place to start for Xero. If we accept the premise that you should pay what you value (I don't, but lets work from there) it doesn't make sense to have a fixed-cost subscription fee. After all, what if you get more than $10 worth of value?* You should pay for each individual episode/movie that you watch, ala the iTunes / Google Play model.

Heh... you really went the wrong direction.

Let's think of Netflix as an island. You gotta pay a fixed price to visit the island. But none of the shows and movies on the island have a fixed price. Subscribers can spend their fees on their favorite content. Because Netflix actually knows the value of its specific content... it would be able to supply more valuable content. It would earn more money and compete resources away from other islands... like Amazon.

Amazon makes the smart decision to allow its subscribers to spend their fees on their favorite shows and movies. Except... it doesn't stop there... it charges its subscribers a little more and combines Amazon Prime with Amazon Kindle Unlimited.

Netflix made more money because it could see whether nature documentaries are more valuable than horror movies. With this same logic... Amazon will be able to make even more money because it will be able to see whether nature documentaries are more valuable than horror movies or romance novels or crime novels. As a result, Amazon island will become larger than Netflix island.

But then everybody will clearly see the relationship between...

A. the variety of digital goods
B. revenue

So the relevant companies are all going to try and supply their subscribers with movies, shows, books, articles, music and software/games. Whichever company is the best at doing so will be a very very very large island. Everybody will pay the same price to visit the island... but none of the digital goods on the island will have a fixed price.

This is the right direction because there will be less and less products that have a fixed price. You wouldn't pay a fixed price for a novel and you wouldn't pay a fixed price for a computer game. Instead, you'd divide your money between the novel and game according to how relatively valuable they are to you.

Let's think of Netflix as an airline. People give their money to Air Netflix, and in return are allowed to fly on as many Air Netflix flights as they please.

With your system, instead of the customers' money going into a general fund, they would essentially be saying "I want to pay for these specific routes, and only these specific routes". If Air Netflix listens and allocates that money to those specific routes, they would have to start dropping some flights because they can't afford to fly those routes with the money they're given. Naturally, Air Netflix will lose those customers who only joined to fly those routes.

Now it comes time to get new aircraft. Air Netflix has several long routes which can only be flown by a 777-200LR. Air Netflix needs four of these aircraft, and due to the customers' allocations it has $180 million that it can spend for them; however, the 777-200LR costs $290 million apiece, and Boeing laughs at Air Netflix's offer and tells them to go pound sand. No new aircraft means that those routes have to be dropped, and there go some more customers.

But surely Air Netflix is doing fine with their other routes, right? Well, some customers - who, mind you, can still fly any route no matter where they allocate their money - are going to look at Air Netflix's available flights and say "This airline is doing downhill, remember when they used to fly to all these other places? Let's try another airline, this one just isn't worth it anymore!". Cue another exodus of money.

A few years later, and it's time again for new aircraft! Once again, that loss of revenue on some routes means that Air Netflix can afford new aircraft for some routes, and those routes get scrapped as well. Goodbye, some more customers!

And so on, and so on, until Air Netflix goes the way of Pan Am and TWA.

[Izandai]

Netflix already has the best possible way to determine what kinds of shows and movies it should get licenses for: how many people watch those shows and movies. If Netflix sees that there's an uptick in how many people are watching romantic comedies, that's a clue that maybe it should license more romantic comedies. Giving people the ability to allocate a limited number of votes among the things they watch will not improve Netflix's ability to respond to those sorts of demographic shifts, and in fact would probably result in misleading data for reasons that have already been explained.

But it's entirely possible that more people are watching romantic comedies simply because they ran out of better things to watch. In this case should Netflix supply more romantic comedies? Of course not. In all cases Netflix should supply the types of shows/movies that people are most interested in watching. And the only way that Netflix can possibly know which types of shows/movies people are most interested in watching, is to allow subscribers to spend their limited fees on their favorite content.

Determining what's truly most important/valuable/vital/urgent can only be accomplished by each and every person prioritizing how they spend their limited money.

If people ran out of other stuff to watch, say, buddy cop movies, then Netflix will know that because almost everyone who's watched very many of its buddy cop movies will have seen almost all of them. In any case, Netflix doesn't care about providing an unlimited supply of buddy cop movies for the buddy cop movie lovers. It cares about providing as great a diversity of content as possible, romantic comedies and buddy cop movies and all the rest.

[Izandai]

Heh... you really went the wrong direction.

Let's think of Netflix as an island. You gotta pay a fixed price to visit the island. But none of the shows and movies on the island have a fixed price. Subscribers can spend their fees on their favorite content. Because Netflix actually knows the value of its specific content... it would be able to supply more valuable content. It would earn more money and compete resources away from other islands... like Amazon.

Amazon makes the smart decision to allow its subscribers to spend their fees on their favorite shows and movies. Except... it doesn't stop there... it charges its subscribers a little more and combines Amazon Prime with Amazon Kindle Unlimited.

Netflix made more money because it could see whether nature documentaries are more valuable than horror movies. With this same logic... Amazon will be able to make even more money because it will be able to see whether nature documentaries are more valuable than horror movies or romance novels or crime novels. As a result, Amazon island will become larger than Netflix island.

But then everybody will clearly see the relationship between...

A. the variety of digital goods
B. revenue

So the relevant companies are all going to try and supply their subscribers with movies, shows, books, articles, music and software/games. Whichever company is the best at doing so will be a very very very large island. Everybody will pay the same price to visit the island... but none of the digital goods on the island will have a fixed price.

This is the right direction because there will be less and less products that have a fixed price. You wouldn't pay a fixed price for a novel and you wouldn't pay a fixed price for a computer game. Instead, you'd divide your money between the novel and game according to how relatively valuable they are to you.

Let's think of Netflix as an airline. People give their money to Air Netflix, and in return are allowed to fly on as many Air Netflix flights as they please.

With your system, instead of the customers' money going into a general fund, they would essentially be saying "I want to pay for these specific routes, and only these specific routes". If Air Netflix listens and allocates that money to those specific routes, they would have to start dropping some flights because they can't afford to fly those routes with the money they're given. Naturally, Air Netflix will lose those customers who only joined to fly those routes.

Now it comes time to get new aircraft. Air Netflix has several long routes which can only be flown by a 777-200LR. Air Netflix needs four of these aircraft, and due to the customers' allocations it has $180 million that it can spend for them; however, the 777-200LR costs $290 million apiece, and Boeing laughs at Air Netflix's offer and tells them to go pound sand. No new aircraft means that those routes have to be dropped, and there go some more customers.

But surely Air Netflix is doing fine with their other routes, right? Well, some customers - who, mind you, can still fly any route no matter where they allocate their money - are going to look at Air Netflix's available flights and say "This airline is doing downhill, remember when they used to fly to all these other places? Let's try another airline, this one just isn't worth it anymore!". Cue another exodus of money.

A few years later, and it's time again for new aircraft! Once again, that loss of revenue on some routes means that Air Netflix can afford new aircraft for some routes, and those routes get scrapped as well. Goodbye, some more customers!

And so on, and so on, until Air Netflix goes the way of Pan Am and TWA.

I did not expect this analogy to be as good as it was. Many kudos. You win an Internet.

[Soldati Senza Confini]

If Netflix subscribers can spend their fees on their favorite content, then it will be easier for producers to see and know exactly where the new optimum is. The speed at which producers adapt and adjust to the new optimum will determine their revenue.

This doesn't make any sense.

We know you want to do this, but you're mistaking the fact I know finance and business more than you do. The problem with your idea is that this, instead of clarifying the demand of a product or subscription, it would only obscure it. The reason why it would obscure it is because utilizing a fee, which reaps far more benefits than going to the movies or buying a DVD far outstrips your costs. Netflix is already running at a marginal profit per client. The fact they sell at volume helps them, but let's not mistake the finances around a business like Netflix.

If we let people pay whatever they want that means they will only pay the absolute lowest possible. Because at a microeconomic level, consumers want to maximize benefit and minimize costs. Your idea would only bring down any business in a month because they couldn't pay off the break-even point. Or their need for clients would be so astronomically big as to filter out most businesses out of industries.

Your idea would ruin businesses and would not let any get up the ground, because this is exactly what you're suggesting. That businesses don't work to run a profit, or shouldn't. And this is just wrong at a financial, microeconomic, and business level. Yes, consumption is the end of all production, but production depends on more economic factors than consumption to keep going. In a capitalist system like the one Adam Smith proposes, all producers produce with the expectation of a profit, not at the expectation of a loss. Your system would have producers running constant losses to where entering ANY business would not be beneficial, but deleterious to any startup, because it won't make sense that they produce something for which they run a loss of money.

Production would halt due to the lack of interest in running a business at a loss.

[Soldati Senza Confini]

How can a grocery store measure how much is being consumed? Seriously? Just because something is purchased doesn't guarantee that it will be consumed in its entirety. What the grocery store knows is the amount of money that is spent on its products. Netflix doesn't know this... but it should know this.

No. What a grocery store knows is inventory. How much of a thing has it been bought per day/month/quarter/year.

Money doesn't enter the equation of demand in products that are stored by inventory except to find the market tolerance to prices. What does mark demand for grocery stores is inventory. Mostly because they know prices can change based on market factors out of their control (gasoline costs, electricity costs, etc.), so money isn't a good valuation of a product in and of itself as much as the quantity purchased is.

[Soldati Senza Confini]

But it's entirely possible that more people are watching romantic comedies simply because they ran out of better things to watch. In this case should Netflix supply more romantic comedies? Of course not. In all cases Netflix should supply the types of shows/movies that people are most interested in watching. And the only way that Netflix can possibly know which types of shows/movies people are most interested in watching, is to allow subscribers to spend their limited fees on their favorite content.

Determining what's truly most important/valuable/vital/urgent can only be accomplished by each and every person prioritizing how they spend their limited money.

I don't see why this is a problem.

Also, Netflix isn't an a la carte service, it's more akin to a buffet service. They give you a wide selection of things to watch at a reasonable price in a membership package.

The membership almost pays for itself in just one movie, if not pays for itself period. There's no reason why Netflix should adopt your idea if it pushes people out of their service as Netflix focuses on what people are most interested in watching and they lose money as a result of letting people use the fees to "vote" or support the license Netflix has with the studio.

Companies do not run at a loss. And if your system will make companies run constant losses and make them close, then your system is shit. Simple as. There's no need to dwell in it from a financial or business angle because it is useless to keep a business afloat.

[Soldati Senza Confini]

This is a stupid way to do business.

Businesses wouldn't be able to function like this if we suddenly declared that you only pay the amount of money you valuate the product at instead of us being able to run a fixed profit.

I mean, it's essentially an extreme gift economy with lots of approval paper.

The problem is that most companies do not work on a business model of it being a hobby/job either like someone developing a Linux system like Elementary OS (which uses the fees for support of the development team and they let you pay whatever you want).

Companies work on the principle of being in business of making a profit. Say for instance you start to adopt a system of "money valuation" like Xero is proposing on your business. What do you think is more often to happen: a lot of people display their "preference" by paying you high dollar, or everyone trying to screw you by only paying you one dollar for your work? What would happen if they only pay you one dollar for your work and yet you have to pay your bills?

[Xerographica]

Heh... you really went the wrong direction.

Let's think of Netflix as an island. You gotta pay a fixed price to visit the island. But none of the shows and movies on the island have a fixed price. Subscribers can spend their fees on their favorite content. Because Netflix actually knows the value of its specific content... it would be able to supply more valuable content. It would earn more money and compete resources away from other islands... like Amazon.

Amazon makes the smart decision to allow its subscribers to spend their fees on their favorite shows and movies. Except... it doesn't stop there... it charges its subscribers a little more and combines Amazon Prime with Amazon Kindle Unlimited.

Netflix made more money because it could see whether nature documentaries are more valuable than horror movies. With this same logic... Amazon will be able to make even more money because it will be able to see whether nature documentaries are more valuable than horror movies or romance novels or crime novels. As a result, Amazon island will become larger than Netflix island.

But then everybody will clearly see the relationship between...

A. the variety of digital goods
B. revenue

So the relevant companies are all going to try and supply their subscribers with movies, shows, books, articles, music and software/games. Whichever company is the best at doing so will be a very very very large island. Everybody will pay the same price to visit the island... but none of the digital goods on the island will have a fixed price.

This is the right direction because there will be less and less products that have a fixed price. You wouldn't pay a fixed price for a novel and you wouldn't pay a fixed price for a computer game. Instead, you'd divide your money between the novel and game according to how relatively valuable they are to you.

Let's think of Netflix as an airline. People give their money to Air Netflix, and in return are allowed to fly on as many Air Netflix flights as they please.

With your system, instead of the customers' money going into a general fund, they would essentially be saying "I want to pay for these specific routes, and only these specific routes". If Air Netflix listens and allocates that money to those specific routes, they would have to start dropping some flights because they can't afford to fly those routes with the money they're given. Naturally, Air Netflix will lose those customers who only joined to fly those routes.

If the demand for anime is greater than the demand for documentaries... and Netflix increases the supply of anime and decreases the supply of documentaries... then yeah.... it could very lose the subscribers who only joined to watch documentaries. But it should be obvious that this really can't be the entire story. If Netflix loses subscribers because it decreases its supply of documentaries... then obviously it will gain subscribers because it increases its supply of anime.

Your story only contained the downside of changing the balance of content. It "conveniently" left out the upside of changing the balance of content.

Imagine a store that sells bread and meat. It's both a bakery and a butchery. Let's say that the store offers and sells an equal amount of bread and meat. What should the store do if customers start buying more bread and less meat? Should the store continue offering an equal amount of bread and meat? Of course not. It should start to offer more bread and less meat.

It's a dance. The producer is dancing with a customer. For some reason you think that the producer should be leading. It's one of the most absurd things to think. The producer should not be leading. The customer should be leading... which obviously means that the producer should be following the customer's lead.

If the customers start buying more bread... then the producer should start selling more bread. If the customers start buying more meat... then the producer should start selling more meat.

The customers do not exist to serve the store.... the store exists to serve the customers. Ideally the store would be a mind-reader. Clearly this isn't yet possible. But this is the standard to strive for. Since the store can't read the minds of its customers... then its customers must communicate what's on their minds. This is the point of allowing customers to pick and choose which products they purchase. Their spending decisions transmits/transfers their specific priorities to the store. Then the store uses this information to improve the balance of its supply. The customers lead and the store follows.

Does Netflix do a great job of following its subscribers? Nope. Nope. Nope. Netflix doesn't allow its subscribers to spend their fees on their favorite content so there's absolutely no way that Netflix can do a great job of following its subscribers.

So why does Netflix have so many subscribers? It's only because Netflix is better than the alternatives. But that can quickly and easily change. All it will take is for Hulu to read this thread and allow its subscribers to spend their fees on their favorite content. Voila! Subscribers will vastly prefer dancing with Hulu.

To allow your customers to substantially participate in the prioritization process should be a no-brainer since that's how grocery stores work. That's how a lot of stores work. That's how most stores work? It's certainly not how Netflix or Hulu works. Neither is it how the NY Times of The Economist work. It's a goddamn crazy disparity. People think that just because the products are digital that it's entirely unnecessary for customers to substantially participate in the prioritization process.

I want to blame this disparity on the division of labor... but it's not like there are any economists arguing that Netflix or the NY Times should allow their subscribers to spend their fees on the favorite content. So either all the Nobel economists are clueless or I am. Heh. Fuck, maybe I'm clueless?

[Soldati Senza Confini]

I want to blame this disparity on the division of labor... but it's not like there are any economists arguing that Netflix or the NY Times should allow their subscribers to spend their fees on the favorite content. So either all the Nobel economists are clueless or I am. Heh. Fuck, maybe I'm clueless?

Well at least you're showing some self-awareness.

[Juristonia]

And it only took 24 pages.

[The Holy Therns]

I want to blame this disparity on the division of labor... but it's not like there are any economists arguing that Netflix or the NY Times should allow their subscribers to spend their fees on the favorite content. So either all the Nobel economists are clueless or I am. Heh. Fuck, maybe I'm clueless?

Proud of you, darling.

[Galloism]

You have yet to name any way Tom sacrificed more than Bob, and I've given you plenty of opportunities. What did Tom sacrifice compared to Bob, Xero? What did he lose? How much? HOW MUCH Xero? Compared with Bob, what has he lost Xero? This is going to be like the "pragmatarian corporation" isn't it? You're just going to ignore the fact that you have no answer and hope it goes away.

If a Netflix subscriber spent their fees on shows about epiphytes... then they'd sacrifice the opportunity to spend their fees on shows about animals.

This is not a sacrifice unless you then can't watch the shows about animals. Otherwise they can watch the shows about animals and the shows about epiphytes, and free ride on the shows about animals.

This is no more of a sacrifice than "using a tax credit" is a sacrifice because lose the opportunity to spend more of your money in taxes.

Well, if they think like a grocery store, they wouldn't take that into account at all. They'd measure to see how much is being consumed, and acquire more of that which is being consumed more.

How can a grocery store measure how much is being consumed? Seriously? Just because something is purchased doesn't guarantee that it will be consumed in its entirety.

"Consumed" in this context means "left the shelves".

What the grocery store knows is the amount of money that is spent on its products.

In the abstract - but the bigger consideration is "did this leave my shelf or did it spoil on my shelf". If it left my shelf and ran out before a new supply came, I didn't order enough. If it spoiled on my shelf, I ordered too much. How much people paid isn't a significant consideration in how much I should order.

And still, you have yet to provide a single example where you voluntarily and regularly spend your money on something that really doesn't match your preferences. You said that gas is an example but then it really seemed like you were saying that you didn't have a choice in the matter. Or, you didn't have much of a choice in the matter. So it's not a relevant example. I want an example where the choice is entirely yours. Your choice shouldn't be even vaguely coerced by others or circumstances that are out of your control.

Define "out of your control". After all, most things - food, beverages, rent, electricity, heat, water, trash pickup, etc are required items, yet we often choose which company we will use to provide these items.

Right now Netflix regularly spends some of your fees on content that really does not match your preferences.

No, Netflix spends some of its general operating money on content that doesn't match my preferences. I spend my fees on Netflix because a streaming service such as Netflix matches my preferences.

It's amazing how you think you still own your money after you give it to someone else in exchange for service.

You think this is beneficial and desirable yet you have not been able to provide a single example in your life where you willingly and regularly spend your money on something that really doesn't match your preferences.

Netflix matches my preferences.

All available evidence leads me to believe that pragmatarianism really does not match your preferences. So if each month you willingly gave me $5 dollars... then this would be a super solid example of you willingly and regularly spending your money on something that really doesn't match your preferences. But are you seriously going to give me $5 dollars each month? Of course not. You're not crazy. Only crazy people willingly and regularly spend their money on something that really doesn't match their preferences. Then again, here you are arguing that it's beneficial and desirable for your Netflix fees to be spent on content that really doesn't match your preferences.

I'm not giving you money Xero, despite you asking me a lot.

[Galloism]

I mean, it's essentially an extreme gift economy with lots of approval paper.

The problem is that most companies do not work on a business model of it being a hobby/job either like someone developing a Linux system like Elementary OS (which uses the fees for support of the development team and they let you pay whatever you want).

Companies work on the principle of being in business of making a profit. Say for instance you start to adopt a system of "money valuation" like Xero is proposing on your business. What do you think is more often to happen: a lot of people display their "preference" by paying you high dollar, or everyone trying to screw you by only paying you one dollar for your work? What would happen if they only pay you one dollar for your work and yet you have to pay your bills?

What's most likely to happen is that I get out of the tax business. The results would be too random to be worth it.

However, the most likely result if everyone adopted Xero's model is that I would quit working entirely and mooch. Which is what everyone would do. Then there'd be no one to mooch from, but no reason for the individual to try to change it.

[The Two Jerseys]

Let's think of Netflix as an airline. People give their money to Air Netflix, and in return are allowed to fly on as many Air Netflix flights as they please.

With your system, instead of the customers' money going into a general fund, they would essentially be saying "I want to pay for these specific routes, and only these specific routes". If Air Netflix listens and allocates that money to those specific routes, they would have to start dropping some flights because they can't afford to fly those routes with the money they're given. Naturally, Air Netflix will lose those customers who only joined to fly those routes.

If the demand for anime is greater than the demand for documentaries... and Netflix increases the supply of anime and decreases the supply of documentaries... then yeah.... it could very lose the subscribers who only joined to watch documentaries. But it should be obvious that this really can't be the entire story. If Netflix loses subscribers because it decreases its supply of documentaries... then obviously it will gain subscribers because it increases its supply of anime.

Your system doesn't reflect demand. It rewards voting blocs.

If everyone in America was allowed to cast 10 votes for President, the neo-Nazis casting 10 votes each for the Nazi Party candidate while everyone else spreads their votes out among dozens of candidates doesn't mean that there is greater demand for a Nazi president.

Your story only contained the downside of changing the balance of content. It "conveniently" left out the upside of changing the balance of content.

Imagine a store that sells bread and meat. It's both a bakery and a butchery. Let's say that the store offers and sells an equal amount of bread and meat. What should the store do if customers start buying more bread and less meat? Should the store continue offering an equal amount of bread and meat? Of course not. It should start to offer more bread and less meat.

And do you know what that store is missing out on? The money of people who buy stuff besides bread and meat.

It's a dance. The producer is dancing with a customer. For some reason you think that the producer should be leading. It's one of the most absurd things to think. The producer should not be leading. The customer should be leading... which obviously means that the producer should be following the customer's lead.

If the customers start buying more bread... then the producer should start selling more bread. If the customers start buying more meat... then the producer should start selling more meat.

The customers do not exist to serve the store.... the store exists to serve the customers. Ideally the store would be a mind-reader. Clearly this isn't yet possible. But this is the standard to strive for. Since the store can't read the minds of its customers... then its customers must communicate what's on their minds. This is the point of allowing customers to pick and choose which products they purchase. Their spending decisions transmits/transfers their specific priorities to the store. Then the store uses this information to improve the balance of its supply. The customers lead and the store follows.

Does Netflix do a great job of following its subscribers? Nope. Nope. Nope. Netflix doesn't allow its subscribers to spend their fees on their favorite content so there's absolutely no way that Netflix can do a great job of following its subscribers.

So why does Netflix have so many subscribers? It's only because Netflix is better than the alternatives. But that can quickly and easily change. All it will take is for Hulu to read this thread and allow its subscribers to spend their fees on their favorite content. Voila! Subscribers will vastly prefer dancing with Hulu.

Why does Walmart have more customers than a store that sells nothing but Model T parts?

Because they make their money by selling common merchandise to large numbers of people.

Your idea would turn retailers into niche stores.