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Old 11-16-2011, 07:42 PM   #189  
PSound
High Definition is the definition of life.
 

Join Date: Oct 2011
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Quote:
Originally Posted by bruceames View Post
That doesn't leave them much wiggle room for renegotiating, which they would need to land the much more expensive contracts that would more accurately reflect the larger sub base. If you're right though, a hefty rate hike will follow.
The contracts are fixed rate.

Which means that the margin improve with new subs. Until the new contracts are made, when the content owners can get paid more based on the subscriber base.



Assuming just $2 billion in streaming revenue in 2012 and that 70-80% COG, Netflix would still be looking at $400 - $600 million annual income.

On the old disc model, Netflix was looking at 66% COG for the studios and post office, NOT including the actual fulfillment process (envelopes, warehouses, staff, machinery, etc).
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