Quote:
Originally Posted by mrblanche 
Netflix reported last week that their customer base erosion was much large than they expected, and there is real concern in the market that they might not survive it. My guess is they will, but with an entirely different customer base.
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In the end, digital distribution is more future proof and more cost effective and allows them to market globally, and their pure digital accounts were ~ 22 million compared to only 2 million for pure hardcopy accounts.
After all, the US population is less than a 20th of the world population they could reach digitally, but w/ hardcopy its difficult and expensive to expand into foreign countries that all need their own offices, their own libraries with appropriately region formatted disks, their own distribution, etc. The license costs and logistics are just so much higher.
The reason I don't have netflix though is that last I checked, their digital library sucked compared to their hardcopy library.
Supposedly that was not by choice, but more due to a battle with the rights holders refusing to license digital copies, or wanting to only distribute digitally themselves and not through netflix. So my guess is that by raising the price of DVD shipment accounts (and then abandoning it into a separate division/site) while simultaneously reducing the price of digital streaming accounts, they were hoping that they'd be able to increase the number of digital subscribers and use that as leverage against the media industry to pressure them into releasing more to them digitally or losing sales.