Monthly Archives: October 2011

Netflix, the digital video delivery company, announced on Sept.18 that the company’s movies by mail service would be rebranded as Qwikster, while the Netflix brand would be dedicated to streaming video.

They have effectively raised the price on subscribers of both by 60%. But in return caused an estimate loss of 1 million customers, or 4% of its subscribers. Did the increase in price and decrease in quantity sold bring up the profit?

Just after few weeks the answer came out. Netflix has abandoned the plan. Qwikster, just like how it sounds, died really quickly. The change in plan obviously didn’t give them more profit. I think that customers valued the simplicity Netflix has always offered, but to keep up the change, they then need to have 2 accounts under 2 websites which was complicated. Also, the average price of both services has increased, and since this product is a normal good, the demand for will decrease. And from the results, the elasticity for this service is probably elastic as it has many substitutes.

The decision to abandon Qwikster is probably a good idea, they might be able to pull back the customers that bailed out on them.

http://money.cnn.com/2011/10/10/technology/netflix_qwikster/index.htm?source=cnn_bin

Word count: 198

As mobile phones are becoming a necessity for most people, our phones have replaced many other once-common tools, from GPS devices to handheld gaming consoles, point and shoot cameras, calendars, notebooks, newspapers and portable music players.  Now Google is ambitiously proposing a future that people can walk out of the house “with only your phone in your hand—and nothing else”,

The idea of using mobile phone as a credit card, driver’s license, transit pass, digital coupon, house key, hotel key, car key and more probably sounds pretty futurey. But if people consider the exponential growing technology, it is possible.

The Google wallet app has already been released, although it only relates to payments but it is a start. People just simply have to pull out their phones instead of their credit cards, and then tap it on a NFC reader to log the payment.

But this type of payment isn’t supported everywhere while other payments are easier and quicker. And lots of hardware and industry standards might need to be changed to make something like that happen. Even more complicated would be the phone-based drivers’ license, since state governments would need to approve that. But this idea is very innovative, and in the future,  will make our pockets alot
lighter.

http://www.cnn.com/2011/10/09/tech/mobile/google-mobile-wallet/index.html?hpt=hp_c1

Word count 199

As world food consumption increases, more people are facing the problem of obesity (http://www.worldometers.info/obesity/). Recently, Denmark has introduced what is believed to be the first fat tax in the world in effort to decrease the health risks obesity brings. Products such as Butter, milk, cheese, pizza, meat and oil are subjected to the tax if they contain more than 2.3% of saturated fat.

Although the intensions of the government is positive, but both the consumer and the producers are heavily impacted by the tax. Since the elasticity of demand and supply are both inelastic (no good substitutes), the producers and consumers will have to suffer significantly as they pay more for the lesser amount. As a result, consumers began hoarding to beat the price rise, while some producers call the tax a bureaucratic nightmare.

Danish officials claim that the new tax will help limit the population’s intake of fatty foods. But people could just buy from alternative suppliers, therefore harming the domestic market. Not only that, if the purpose is to reduce obesity, scientists think saturated fat are less harmful than salt, sugar and carbohydrates, which should be targeted.

http://www.bbc.co.uk/news/world-europe-15137948