Comment by raw_anon_1111
6 hours ago
So now a business shouldn’t be able to borrow money either to start a new initiative? Should they have instead charged customers enough from day one to fund growth? So the first 1000 or so customers should have been charged enough so they could spend an extra $16 Billion?
If they're using their overwhelming size to lock out smaller competitors that can't put up a similar collateral?
Probably a good idea. And it looks like Netflix simply needed to make the service a bit more expensive?
A “bit” more expensive to cover $16 billion of expenses?
So how would that have helped smaller competitors? Where were they going to get the money from to compete if not other lines of businesses or borrowing? Were they going to charge their first 10,000 customers $100,000 a year so they could fund development without either borrowing money or take it from existing businesses?
Yes? Netflix had 20 million subscribers in 2010. At additional $50 per year per subscriber, that's $1B a year. More than enough to be profitable with regular loan financing at market rates.
> So how would that have helped smaller competitors? Where were they going to get the money from to compete if not other lines of businesses or borrowing?
By borrowing at market rates and pricing services to cover the loan payments.
You're actually making a good argument why cross-financing should not exist at all and that we all would probably be better without it.