There are other significant market dynamics, e.g., Amazon Prime video and more competitive on-demand offerings from companies such as Verizon
For years Netflix had carefully tested its products in focus groups assembled in the Lord of the Rings conference room in Building A at its Los Gatos (Calif.) headquarters campus or at rented space around the country. Focus groups have been asked about everything from the red color of DVD envelopes to the quality of video streams. This time Hastings skipped the focus group step, missing an opportunity to gauge customers’ potential reactions to separate websites and billing, according to the former employee. (Netflix spokesman Steve Swasey declined comment.) Instead, Hastings and his team relied on data showing that 75 percent of new signups before the price hike preferred streaming.