Vendavo Price Chat

Where some of the best minds in pricing meet to discuss current pricing trends, their takes on relevant news, tips and tricks for maximizing your pricing efforts, and so much more

EPISODE 2

The Streaming Wars: The Consumer Strikes Back

In this episode, Paul and Dan discuss The Streaming Wars and your ever-increasing Netflix prices. There is a great disturbance in the Media Market, and profitability seems to be far, far away.

Welcome to Price Chat

Welcome to Price Chat with Dan and Paul. Join us as we periodically discuss topical news stories, how they relate to the pricing world, and what we would do if we were in charge. During each episode, we avoid doing our day jobs and review interesting challenges such as Red Lobster’s Endless Shrimp debacle and how we would solve it. 

Meet the Experts

Dan Cakora

Dan Cakora
Business Consultant at Vendavo

Dan Cakora is a Business Consultant at Vendavo, and has worked in various aspects of Pricing for over 15 years. Dan started his career as a Field Economist responsible for helping to measure inflation for the federal government. He has led Pricing teams, developed Pricing and Sales Enablement products, and has a passion for data visualization.

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Paul Sansom

Paul Sansom
Business Consultant at Vendavo

Paul Sansom is a Business Consultant focused on understanding market challenges, building business cases, and driving business value and outcomes for Vendavo customers. Paul has a wide range of expertise in business development, forensic market analysis, CRM management, marketing communications, field engineering, and corporate business strategy.

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So, how can we build a better promotional strategy? You can certainly incentivize new behavior bring in different customers, but you need to understand the cost to serve and the relationship to your volume. Examine the behavior of your customers before they’re buying, incentivize higher margin purchases with cross selling, and cover your costs.
We really have to understand where we can make the most margin and how we can do it the most efficiently.
“Platforms are being besieged on all sides by high content costs, increasing churn rates, and, up until recently, a lack of ad revenue to support their platform. So, they’ve lost 25 to 30 percent of revenue every year. Investors don’t like losing revenue, so they have put pressure on these companies to close the profitability gap by raising prices.
How do you think companies can close this profitability gap? The one tried and true method is of course market consolidation. It’s reducing the number of options and potential competitors. You could also call this the Wild West phase, as it includes tons of options like including direct competitors and niche players.
Even though people are canceling in droves, almost 39 percent of those customers return to the service and subscribe again within 11 months. So this could signify seasonality, such as customers subscribing for college football season or the new edition of Love is Blind. Therefore, companies could incentivize longer durations of 12 or 24 months with lower prices.