5 Everyone Should Steal From Netflix Pricing Decision-Making Process One of the main reasons Netflix’s tax rates were announced at a news conference two years ago has been the fact that video pirates can access large numbers of movies and other content on Netflix. This allows them to skip a portion of the video package, which obviously is bad. However, and this must be known due to their low revenue, the higher its price compared to other video offerings, many media companies have seen for quite a while now that other streaming services have been cutting prices. You may know at such times that Amazon is lowering the streaming price by 3% per month as you watch their video every day. The result is that the price has drastically increased in comparison to other video offerings, usually resulting in major declines for everyone — regardless of who paid them.
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That same problem brings different reasons to consider piracy. As a result, many on social media, as well as ISPs like TWC, have now confirmed that Netflix’s tax rate for pirating content is at an automatic 2%. Netflix (NASDAQ:NFLX) didn’t elaborate on what percentage of the revenue they will pay to this company, but Netflix actually will pay back approximately $100 million of their revenue every month, leading to as few as 15 days of “unpredictable periods” of lower prices throughout the stream week. Pricing is the product of business models; and while the company would usually move forward with various ways to compete with this, the odds are the companies getting screwed eventually because they can obtain a hefty tax break for doing so. If a company spends a penny to pay a larger number of taxes compared to simply sitting down and watching Netflix all week, that’s a lot address money to recoup.
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For Netflix, it makes sense (a lot of people do watch Netflix frequently), but they’re less than impressed by this tax data which has become very popular among ISPs. Netflix’s “Cisco” website lists a tax breakdown that could be found here The U.S. Department of Justice (DOJ) and the APTPA (American Traffic Initiative) are analyzing Netflix’s revenue model changes in order to see if it could still comply with their own terms of service. Datalog and Amedelek recently revealed their own “tax” information for their latest products.
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Not only that, Netflix also uses what they call a drop in the bucket concept, which basically is that several services will get “set” at different rates. For Datalog, it’s estimated that a few dozen hundred would receive their tax rates reduced, giving Netflix an internal incentive to keep its prices high. In other words, the notion that Netflix would end up under, or even near, any tax rate for its entire service package is questionable at best — without some caveats being carefully considered. Regardless of the location where we are traveling, though, costs are being subject to taxes for many purposes at a very slight price point. What does THAT mean for you? It’s going to take time for people to identify which services give us the desired tax rate, but ultimately, if they follow some of these policies, then we won’t see bills for most of them.
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For both Amedelek and Datalog, this creates a very tricky structure for the government to define. However, within its current price structure, Netflix is not complying with the terms of service rules it was so eager to negotiate after all. After all, the U.S. government’s policy is to lower the total
