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Indeed a 'dead end' from a business perspective...Competition is good, but not when both companies are essentially "buying business" -- a la undercutting their own margins just to retain a subscriber.
That subscriber becomes a loss since they are continually getting the favorable pricing. The loss may not be apparent from a $ perspective, but each subscriber at a lesser margin creates extra load on the infrastructure that can't be easily upgraded due to the lack of profit that should have been generated beyond the new subscriber discounts.
This may sound like a loss to the consumer, but this gives both companies a chance to maintain/improve the quality of service. Last thing I want to see is for service to deteriorate to competitors' levels (e.g. Time Warner's cruddy speeds). |
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CXM_SplicerLooking at the bigger picture Premium Member join:2011-08-11 NYC
1 recommendation |
That is part of the problem with today's business mentality... making less profit is still a profit, it is not a loss. No cable company would ever offer a promotional price that actually resulted in a legitimate financial loss. |
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amarryatVerizon FiOS join:2005-05-02 Marshfield, MA |
I think government is the worst offender when it comes to that. Politicians call them cuts when they're really reductions in the increase. Still an increase, just less of one, and that's a "cut". |
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openbox9 Premium Member join:2004-01-26 71144 |
to CXM_Splicer
That's like saying your salary decreasing is still a profit. Are you ok with that? |
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openbox9 |
to amarryat
It's all about marketing and most voters don't have a clue. Add in the estimated reductions are spread across 10 years, covering at least a few Congresses and a couple of presidents that will likely change something, and things become even sillier. |
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amarryatVerizon FiOS join:2005-05-02 Marshfield, MA |
Unfortuntately, the right to vote doesn't require any prerequisites, such as understanding what you're voting for. This country is full of "useful idiots". |
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openbox9 Premium Member join:2004-01-26 71144 |
openbox9
Premium Member
2014-Jan-3 8:51 pm
Agreed. Being born into, or obtaining citizenship along the way, enables anyone with a pulse to vote their ignorance. |
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CXM_SplicerLooking at the bigger picture Premium Member join:2011-08-11 NYC |
to openbox9
Yes, I am ok with the concept that if my salary is decreased I am still making a profit and not paying to work there. |
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openbox9 Premium Member join:2004-01-26 71144 |
openbox9
Premium Member
2014-Jan-4 9:33 am
But would you be satisfied? |
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CXM_SplicerLooking at the bigger picture Premium Member join:2011-08-11 NYC |
The question is not one of satisfaction, it is of the definition & interpretation of 'loss' and how it is distorted by business-think.
My reaction to a pay cut would be (and has been) to provide less work. How else should it be in a business arrangement?
Should a customer be satisfied with a higher price for the same service? Especially if they know the cost of providing that service has gone down? |
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to Comp625
I disagree. Comapnies, particular cable & telco companies DO NOT sell products or services at prices which constitute a net loss, EVER. At worst, they are reveue/profit neutral. Between telcos raking it in on the wireles side, and the Cable companies' non-union labor costs... they both seem to do quite well each year. As consumers become more savvy, they are realizing they do not have to buy phone & video from these providers. As such, prices have been indexing higher to punish this market force for single/dual play services. Nevertheless, when there is a difference of $5 or $10 between one service & two services... it's quite clear what they are doing. Eventually this negative reinforcement will meet with consumer backlash.. the end result of which is still unknown. If Google fiber can become a success in Austin, Tx... then it could become a success in Metro NY. Verizon, Comcast, Cablevision and Time Warner & AT&T only have themselves to blame for it.
One example of an industry selling at a loss is once in a blue moon when ethanol prices tried to make a run at competing with gasoline.. a huge marketing (tv ads), market manipulation of corn and lowering of gas prices to burn investors in ethnaol (temporarily) was the negative behavior by the oil industry (this was around 2005 - 2007ish). |
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double post |
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openbox9 Premium Member join:2004-01-26 71144 |
to CXM_Splicer
Ok, strictly speaking, yes, it should be detailed as a decline in profits, not a loss, assuming the company's net profit is still in the black. The same would be the same when discussing individual subs.
Many customers are satisfied with the price they pay, even if it's through their laziness. Some will complain, some will take action, and some will have no clue, or don't care. |
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