reply to silbaco
Re: Why should Netflix undercut cable
said by silbaco:Cable operators certainly have an option in that case: stop carrying the content.
Cable operators would like for their rates not to go up as much as their consumers, but that's not an option when content owners want double and sometimes as much as 5 times what their previous contract required.
The only reason they don't opt for this is because they know they can push their increased costs onto the backs of their subscribers. It's less risky for them to pass on a cost plus make a little more profit under the guise of "Sorry, but we're held captive; what can we do?" than it is to take a stand and tell the content producers to go take a hike.