this post was submitted on 06 Dec 2023
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more a matter of “don’t wanna” than “can’t”
It says they operated at a loss in SK. If that's true, I wouldn't wanna, either.
What the actual fuck are you talking about? A simple google search shows that Amazon very much makes a profit. Do some basic research first before posting bullshit please.
Wha
Dang, stores better get rid of their loss leaders than.
Sometimes you gotta take a small loss for the overall benefit of the company/system.
How is remaining in an unprofitable market a "loss leader"?
You really don't think Twitch did some analysis on this matter before making a decision? Or do you just figure that your uninformed assumptions about their financials are more accurate than their internal analysis? Clearly whatever benefit they were or were not getting from their SK business was not enough to justify the operating costs.
Negative press costs money too. There will be unforeseen costs related to this move.
They're leaving the market. If anything Amazon is putting a shot across the bow of the ISPs who are charging these interconnect fees to get THEM negative press and make the Korean public demand a change in the laws so they can get the Internet they pay for.
Amazon may be quitting twitch in Korea, but their cloud services are still paying for the dumb fees.
What negative press? They're no longer going to do business in a particular market for completely normal reasons. This isn't some kind of scandal, it's a standard decision for a company to make regarding unprofitable operations. Everyone besides you seems to understand this.
You clearly have no idea what you're talking about.
Loss leaders you know lead to something. Can't see what it would lead to.
Neither does the person you're replying to. They probably just learned the term "loss leader" and thought they'd sound smart bringing it up but have no idea how the concept actually works in practice.
Sounds like he needs to rightsize.
Loss leaders work because customers will purchase other products/services. Operating in a market at a loss isn't what a loss leader is.
I dunno man, neither of us are financial analysts for Twitch
Gaming nerds dictating how business should operate is one of the funniest things to observe.
Or just remove what's costing you so much?
Can't remove a tax without lobbying or breaking the law.
Correct, but those are both expensive in their own ways.
If they don't see a return they won't do either.
Which would cost you more in the end, so if removing it costs more, you keep it in.
That’s what’s a loss leader is…..
I also didn’t know that South Korea charges extra for foreign content providers which is also pretty aggressive.
Yeah, and it all started from a lawsuit between SK Telecom and Netflix because in 2020 people watching Squid Games in Korea used an unprecedented amount of bandwidth. Reuters article
Most telecom providers make deals with the big platforms regarding payment, but I guess S. Korea really wants Afreeca to be the only player in the streaming space. It could also be chaebol shenanigans.
There's no "don't wanna" unless there's a "can't" due to not being able to make a profit. If they could they would. It's simple as that.
Companies don't just want to make a profit, they want to make the largest profit. Plenty of businesses turn down profitable ventures in pursuit of more lucrative returns.
Why would they do that if they aren't mutually exclusive to one another? I'd get this notion if they'd started to do some sort of alternate way of providing for the SK market where their original platform would have been in the way but why close off profitable branches for no reason at all?
Because an organization or person only has so much bandwidth and attention. You can't infinitely scale to grab every bit of profit.
"Tripping over dollars to pick up pennies."
While true, that's not exactly relevant when it's a choice between losing a lot of money and not losing a lot of money.