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While the streaming business is growing (adding 220 subscribers domestically in the quarter), and the DVD business sis shrinking (it lost 2.76 million subscribers domestically), it's margins are much worse than the legacy DVD business.
Best in class would be 65%+, but if Stitch Fix is materially more popular than I'm guessing and the typical customer actually orders a fix 4 or even 5 times a year, then it's margins range towards 60%+ and approach best in class.
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In 2011, it was "Margin Call," a very articulate and handsomely acted version of a Lehman Brothers-type meltdown.
It's these margins, I fear, that are killing Apple's common sense.
It's small margins.
"It's small margins," said Bayliss.
"It's about margins," said Andy Dunn, the chief executive and co-founder of Bonobos, a men's clothing site.
"It's fine margins.
"It's fine margins," he said.
That last 10-15 minutes, I was pretty convinced we were going to win the game, but it's small margins".
It can be margin based or lower spiff for PS revenue than software revenue.
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