Sunday, November 28, 2010

"Wait a minute Mr. Postman"...Actually, dont wait...you are being "creatively destroyed" by the marketplace...You might soon only exist in song...

There are lots of micro-economic concepts embedded with analyzing a company like Netflix, not the least of which is "creative destruction".  I was taken aback at the amount of postage they pay to mail DVD's.  Technology already has decreased a significant portion of the Post Offices revenue. How do they possibly replace that? Dont see how they can expand the market for mail.  Seems like a dead end road. 

Netflix’s Move Onto the Web Stirs Rivalries


""...For the first time, the company will spend more over the holidays to stream movies than to ship DVDs in its familiar red envelopes (although it is still spending more than half a billion dollars on postage this year). And that shift coincides with an ominous development for cable companies, which long controlled home entertainment: for the first time in their history, cable television subscriptions fell in the United States in the last two quarters — a trend some attribute to the rise of Netflix, which allows consumers to bypass their cable box to stream movies and shows...""
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