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this post was submitted on 29 Oct 2023
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Your claim that this is a tactic happening since for ever doesn't take into account the differences between subscription model and traditional businesses. In traditional businesses, yes, a business may decrease the prices in order to lure customers, but this was never their business model. This was limited time "get to know us". I don't think there was for example any supermarket operating at loss for 5 years before they decide to "ok, lets put the real prices on the shelves now".
of course it is a fake audience. The fact that some users will be retained doesn't make the 100% of the audience real. And also by fake audience it doesn't necessarily mean that the whole 100% of the audience is fake. However, when they present their numbers, and they claim that "because of piracy we lost 5 million subscribers" this is based on the 5 million subscribers who potentially would never be subscribers if they had their "real" price upfront, instead of a price in which they operate at loss.
However, when people are charged for piracy, they are charged based on imaginative loses who are based on a potential profit which would had been achieved if their 100% of customer base had been continuing paying a subscription which they would had never agreed paying if the price was not faked in order to attract them.
the free market will turn to the government to cover their losses and they will push for stricter anti piracy law enforcement. The free market evangelists just want a free to control market. I don't think they will be "ok, customers are leaving after our latest increase in price, then let's just decrease the price to get them back on board"
I am pretty sure they know how many accounts they will lose for every dollar they increase the price. It should be a net positive for them because otherwise they would not do it.
Enforcing terms and conditions that they previously did not is just another price increase in the grey area that is not directly perceived that way.
I agree that "Lost x amount to piracy" does not even make sense in that context. They know exactly what they are doing.
With regards to discounts to lure new customers, I was thinking about conventional subscription based services like newspapers or cable providers. It doesn't seem unreasonable to me that in a sector with heavy competition, such services might be offered at an initial loss if data suggests that retained memberships can recoup it.
I misunderstood what you were referring to with a definition of "fake audience." I wasn't giving any merit to their claims about how it all ties to piracy, clearly that's nonsense. I'm not completely following your train of thought with a "fake price," though.
It's possible this might result in a harsher stance on piracy again, that's true. Realistically, though, I think it's more likely that three things will happen: we as consumers will gradually recalibrate our cost expectations for streaming services, production corporations will cut costs with more reality type content, and smaller companies will either be bought up or go out of business as users settle on a deliberate few services to subscribe to.
you said that they now needed to correct to the "real price" in terms that it is a price that will allow them not to operate at a loss. So the previous one was a "faked" (artificial) price, that they knew was below cost, however they chose to go with it in order to lure customers.
I'm not implying that they tried to scam anyone with "fake prices" if this is what you understood.
I see. Whether or not the price covers costs, businesses will often invest into attracting new customers, for instance through marketing campaigns or incentives to switch from a competitor. In such cases, the cost isn't visibly calculated through to the consumer.
However, since the cost is a main factor for purchase decisions, companies might similarly invest in growing their customer base by offering a pricing tier below cost. This doesn't necessarily mean that the service as a whole is operating at a loss, because there might be higher cost tiers that offer premium content or family plans. Different plans might also have degrees of underutilization that reduces service costs. Finally, cohorts of service tiers might change based on external factors like economic recession or competitive offerings.
All this is to say that pricing models are complicated, and breaking even with a SVOD service is extremely difficult in an industry with extremely high production costs, aging licensable content that viewers are losing interest in all while being overrun with complex, regional licensing agreements that affect both. Especially when this is further compounded with macroeconomic factors including inflation and interest rates that affect both corporations operating at a loss and consumers looking to tighten their belts or user decline due to subscription fatigue, an argument could be made that some middle ground needs to be found to simply remain in business.