Well…with all of the turmoil that is going on with Netflix and the giant mistakes they have made over the past few months, I thought a few comment on their management might be in order. As you know, the stock has been in free fall since the ceo, Reed Hastings, made the stupid decision to raise prices almost 60% and split the company into two parts, losing almost 8 billion dollars in shareholder value in the process. What I don’t understand is the lack of economic understanding of the market they operate in and the utter hubris of their decision making. If you know anything about economics and how markets operate, you know that in the early days of Netflix they were operating as consumers of marginal output…that is they were the only purchasers of content that the providers had already paid for as an addition to the normal channels like HBO and Starz, giving the content suppliers marginal revenue that standard economic theory says should be taken at any cost. And, until competitors come into the market, Netflix got a bargain on this content that they then built their streaming services around. But, what they missed is the fact that as more channels are available for content providers, the price will rise as marginal demand for the product increases. That is exactly what happened in this case and this was compounded by the fact that the supply side of the equation changed as well, limiting the amount of price increases that the market will bear. So, in every possible part of the economic equation, Reed and his cronies got it wrong and they are now paying for it by the company’s valuation plunging by almost 75%….it just looks like a karmic payback for trying to screw the customers that made them successful….couldn’t have happened to a worse bunch…