Business Foundation Management Assignment Example | Topics and Well Written Essays - 500 words

Business Foundation Management - Assignment Example It jacked up it prices by 60% because of the deal they made with Hollywood (Sandoval 1). The deal was that Netflix was to pay a specific amount of money for every user per month for any user who had the right of connecting to the Hollywood content. This was regardless of whether they Netflix consumers viewed that content or not. Therefore, Netflix could not afford the luxury of paying for the digital content for individuals who were not watching it. The organisation argued that it was not cost of living increase and nor was it inflation. Regardless of the fact the analysts argued that the new hike in prices by Netflix was because of the new studio contracts, Netflix maintained the contracts had nothing to do with it. It also maintained that neither was it the high costs of doing business had caused it to hike the prices. In the Netflix’s blog, they say that when they launched their $7.99 unlimited streaming plan, whereby DVDs by mail were treated as a two dollar adds on to their unlimited streaming plan (Sandoval 1). In that previous year, the management had not anticipated offering DVD-only plans. Thereafter, they realised that there was still a very large continuing demand for DVDS. This was from both their existing member and the non-members. They continue to argue that, given the long life they thought that DVDs by mail were going to have, treating DVDs a two dollar add on their unlimited streaming plan was neither making great financial sense not satisfies the individuals who just want DVDs. Netflix mana gement argued that creating an unlimited DVDs by mail plan whereby it did not include streaming at their normal prices, which were very low, $7.99, it did not make any sense (Sandoval 1). In addition, they stated that it would not ensure a long life for their DVDS by mail offering. The most argument that comes regarding this decision was that the price hike was mostly to force the millions of Netflix’s members and non-members to go for