Lessons from Netflix pricing: Ignoring statistical fallacies … and trolls
Here’s a simple business question for you. Let’s say you had 100 customers and charged $10 per month for your service. You decide to raise your prices by 60% – yes 6-0 – and when the dust settles you still have 97 customers. In every month after that, your customer base grows. Would you make that deal? To save you the arithmetic: your revenue after the price increase is $1,552, vs. $1,000 prior to your move. Assuming your costs are constant, your profits have also increased s