BluePhantom
Educator (of liberals)
- Thread starter
- #41
Nice theories. I'm assuming tomorrow you're going to actually present real world examples that actually happened to support your theories, rather than just making up more hypothetical examples that - not surprisingly - always support your view? Or do we need not concern ourselves with the real world, real history, what actually happened? Heck - why look back in history and see how tax rates, unionization, etc. actually affected the economy and the real people in it - when you can just make shit up that works out perfectly to support your view? It requires far less reading and research on your part, and since the examples you provide are made up by you with the sole purpose of illustrating your points, they nicely and neatly fit in with your theories instead of introducing the complexities that a real world example would provide.
Ok now that Thanksgiving is over I can get back to this. Sure...I will be happy to provide real world examples.
Let's start with Netflix who recently raised rates up to 60%. They did so because their own costs for postage, handling, and licensing fees from the movie companies were increasing. "...between the cost of mailing DVDs and paying increased licensing fees for content, a Netflix rate hike was inevitable." (1) In other words they were facing increased cost obligations and passed them along to the customer. The company does not simply eat the additional cost burden. Netflix lost 800,000 subscribers because of this price increase which obviously means they lost market share. (1)
Now Redbox on the other hand raised prices 20% in response. Why? Several reasons. One, because they knew that Netflix was going to lose a portion of their market share due to their increased fees and that meant Redbox could boost their prices just slightly, generate more profit which will be used on expansion, and still grab a portion of that market share that Netflix sacrificed. Two, Redbox itself was dealing with increases in operating expenses due to the Durbin Amendment which regulates (there's that word again) debit card transactions. (2,3,4,5)
This is a perfect and very simple real world example that you requested that demonstrates the point. It includes prices increases due to government regulation, operating expenses within the chain of distribution, reactive price increase by a competitor, and market share adjustment.
1) Showbiz Sandbox 112: Why Netflix Had To Raise Its Prices : Showbiz Sandbox
2) Redbox Raises Price On Rentals To $1.20 | TechCrunch
3) We've Seen This Movie Before: Redbox Raises Prices
4) Redbox to Raise DVD Rental Price 20% Per Day - The Hollywood Reporter
5) The Durbin Amendment Explained