I had an email yesterday telling me that the Apple One subscription was going up for the second time in twelve months.
It no longer represents good value for me and I can save nearly £100 a year by cancelling and subscribing to the important parts that I use most.
Apple are not alone in increasing prices (in a cost of living crisis) to the point they no longer represent fair value. What is it with companies that they lack basic business smarts?
lack business smarts
Nothing lacking at all. It’s business intelligence. Greedflation. A corporation has a fiduciary obligation to its shareholders to maximise profits by whatever means they can. It’s capitalism pure and simple. You can rest assured that people who get paid lots of money did complex forecasts to predict what the ramifications would be. In the end they decided it was worth it. And for them it probably is.
Its pretty annoying, this double whammy of shrinkflation+greedflation. Getting old real fast
Err, I agree with the greed part. But the obligation to maximise profits is not true. A quick web search will bring up, e.g. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits and many other sources. Companies can do whatever they like, as long as it’s within the law. The fact that most choose to maximise profits at the cost of other things is entirely on them.
I know what you’re saying but the world has moved on. Companies and regulators are talking about fair value as governments adopt ESG laws.
Companies that take an old fashioned “as much as we can get away with” approach are finding their customers drifting away. Nowadays if companies want to put up prices and be successful then they have to make the product (whatever it is) seem more valuable.
What is it with companies that they lack basic business smarts?
Short-sighted greed and appeasement of shareholders.
We’re in a consolidation phase. The streaming market is now well established and the market shares are largely settled. In the past many services ran at a loss or without much profit to establish their market share. Now the market is in a phase where they try to figure out how much people are willing to pay for that service that they’re used to.
They’ll continue to raise prices as long as enough people remain to pay them. All of the services.
Certainly the price increase involves losing a very small but vocal percent of users, that is covered by the rest of users who swallow the new price.
To me, their pricing wasn’t competitive. The only good plan is Apple Music plus TV+ if you’re st udent.
Unfortunately a lot of these streaming platforms purposefully run at a loss to increase numbers, then start to raise prices as they think they can/need to. I’m deep enough into to ecosystem that I tried it out, but same conclusion.
