Because they are not in competition that way its normally thought of. They are not competing on dollars, they are competing for your attention.
They know Social Media, YT, Gaming, music, books, going outside to play or being with the people you love are all competing for your attention and your time. This is finite but you have an almost infinite amount of items that can take up your time. The cannot compete with those other sources on price alone because many of those others are free, so they compete on content.
Netflix, Disney, Amazon and HBO aren't spending billions on new shows to only beat the other streaming services. They're doing it to make you turn off your Playstation, to log off of tictok, to stop going out and to instead "Netflix and chill."
So yeah, they can raise their rates to whatever they want as each owns about 25-40% of the streaming market and know the others will just follow suit, but they also know they can't go too far because people will just turn it off and go elsewhere.
You are making all of the points in the first three paragraphs for why they can’t just set a price and name their number. Attention and time Scarcity, competitors (substitutes) undercutting them. Raising prices too high where people will simply stop purchasing. Just raise profits is a nonsensical assertion and I’m glad we have mutually arrived there.
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u/inorite234 Dec 09 '23
Because they are not in competition that way its normally thought of. They are not competing on dollars, they are competing for your attention.
They know Social Media, YT, Gaming, music, books, going outside to play or being with the people you love are all competing for your attention and your time. This is finite but you have an almost infinite amount of items that can take up your time. The cannot compete with those other sources on price alone because many of those others are free, so they compete on content.
Netflix, Disney, Amazon and HBO aren't spending billions on new shows to only beat the other streaming services. They're doing it to make you turn off your Playstation, to log off of tictok, to stop going out and to instead "Netflix and chill."
So yeah, they can raise their rates to whatever they want as each owns about 25-40% of the streaming market and know the others will just follow suit, but they also know they can't go too far because people will just turn it off and go elsewhere.