I doubt these two scale linearly, otherwise how would they make money? Also, I could imagine that the people that want their comfort show to be running in the background 24/7 are the ones that won't cancel their subscriptions. It's the occasional watcher that will most likely deem netflix worthless to them, so their subscriber to usage cost ratio might even worsen. I'm just guessing here though, obviously.
I definitely agree, it all depends on their profit margin correlation to their infra cost. For a normal SAAS I'm assuming it's not very strong, but for a video streaming business, I think the cost is much higher and therefore a lot more highly correlated. We also need to take into account the reasoning behind this decision. They're also removing multiples of users but losing only one membership so it's even more skewed towards being even. In the end, I'm assuming this is a calculated decision from their end, so they should have the numbers, if they're skewed in their favor they'll proceed, if not, they can always backtrack and not release this in the US, which I think is why they're releasing to smaller markets first.
All good points, especially the one vs many membership to viewers ratio. You're probably right (at least I hope so) that someone will have run the numbers. I guess we will see.
Would be cool to see a big tech company embrace something other than the infinite growth fantasy
Actually, if NFLX pivoted their DVD-rental business (which they are planning to sell) to Digital Dowload-to-Own, there are new customers they can bring. Also, since it is a transactional business, there will be a steady income stream with every new release and people who want to own the Blu-ray equivalent digital edition.
They probably are worried about the cannibalization of the subscription base and hence caught in the Innovator's Dilemma.