Ethel mermania wrote:Xerographica wrote:Well, in this case subscribers are already paying Netflix money. My argument is that subscribers should have the option to use their fees to signal the value of specific content. Then Netflix would know the actual value of its content. It could use this knowledge to more easily provide more valuable content. Once it did so, then its revenue would increase and it could compete more talent away from other organizations. It would be a virtuous cycle.
Consider this example from Deirdre McCloskey’s book “The Applied Theory Of Price”…
If the New Yorker (NY) allowed subscribers to use their fees to signal the value of specific articles… then the NY would know the actual value of its articles. With this knowledge it could do a far better job of supplying more valuable articles. Once the NY successfully supplied more valuable articles then it would earn more money and compete more talented writers away from other organizations. It would be a virtuous cycle.
It feels really ridiculous explaining this because this is pretty much how your grocery store works. Your grocery store is a market. Shoppers use their money to signal the value of specific products. As a result, the store knows the value of its products. It uses this knowledge to replace less valuable products with more valuable products. Of course all the other grocery stores do the same thing. Whichever grocery store does the best job of it will earn more money and compete more talent away from the other stores.
The idea that an organization is going to efficiently increase the value of its products without actually knowing the value of its products... is beyond absurd. Yet, this is exactly the idea that Netflix and the NY is based on. It's also exactly the idea that the Cato Institute and Adam Smith Institute are based on.
Therefore, it seems reasonable, albeit admittedly absurd, to conclude that nobody truly understands what markets are good for. This rule has one or two exceptions.
This is the point in history where we have markets but nobody truly understands what they are good for. Hopefully sooner rather than later we'll reach the point in history where everybody truly understands what markets are good for. The value of each and every product will be known and less valuable products will quickly be replaced with more valuable products.
netflix knows the value of its content by how many times a video is downloaded, then they use that information to decide what they should do, for example the sucess of things like Orange is the new black, and the continuation of arrested developement taught them that people will download original content, and have spent their investment dollars in that direction, and as their subscription rates are going up, producing more in profits it proves them right. they dont need to charge extra or make the customer do more. a smart business like netflix makes it as easy as possible to send them money and procure the product they want from netflix. they are not going to make it more complicated than necessary to get customers to give them money.
thanks to the metadata netflix knows exactly what to deliver to maximize their profits
Here you are "downloading" my thread. Please let me know exactly how much money you owe me. Then let me know exactly how much money Galloism owes me.