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It's not about what revenue level will sustain the existing players in the market; it's about what price consumers will be willing to accept. I don't think cons

by exelius 11y ago

It's not about what revenue level will sustain the existing players in the market; it's about what price consumers will be willing to accept. I don't think consumers will be willing to spend $30/mo on a single video service in 5 years. Maybe across multiple services, but the whole concept of channels is going away in favor of individual shows. The networks don't have the power anymore; the shows do. I also bet that rather than go through Netflix, AMC et al will sell subscriptions directly to consumers. The value add from Netflix isn't that big; you could set up a very similar service on AWS and Akamai with very little investment since they already own the content rights. Much of the appeal of Netflix is in the simplicity; and I don't see them throwing that away (or consumers accepting it).

ghaff 11y ago
I suspect we'll end up with a rather fragmented landscape of services. It will be potentially complicated for consumers to navigate. It's also probable that consumers will be able to cut their current video content bills but primarily if they're willing to give up access to content that consumers as a whole find valuable. (i.e. give up ESPN, not HGTV.)
slyall 11y ago
Where I am (New Zealand) the whole stream TV/movies business is just started to heat up with about 5 services launching in the last 18 months or so (in a market with just 4 million people). I saw a few recent talks at a Industry event from the providers and the feeling from them is that the content owners wanted very much to avoid a single provider being a monopoly. The impression I get was most people would end up with around 3 providers each charging $10 per month and each with exclusivity on some new shows (or sports I guess).
dasil003 11y ago
Having spent the last 8 years building a Netflix competitor, I think you overestimate the commoditization of VoD tech. You need a lot more than AWS + Akamai. The costs of those are too high for the types of margins a Netflix-like service has. Also, you need apps everywhere, and those apps have to be good. Even though it's getting a lot easier every day, it's still way outside the reach of any individual show, they're just not structurally set up to build and manage the tech side. HBO can do it because they are just barely big enough, but individual shows will never jump that canyon. What's going to happen is not that shows replaces channels, but that services become the new channels. Instead of having a few cable companies monopolizing the last mile, building and running all the distribution tech, and charging an arm and a leg for access, the new model is that there are no gatekeepers on distribution. But that is not to say distribution is a commodity or easy, in fact doing good distribution ala Netflix that cuts across devices, geography, and a long tail of content will become an essential value-add and it will be more competitive than it's ever been.
- exelius 11y ago
  Having also spent the last decade or so building a similar service, the tech side is commoditized by at least a half dozen companies. The ingest workflow is still somewhat manual, and there's a lot of QA that has to go in to your metadata, but the tech side (transcoding, CDN delivery, etc) are commoditized -- especially if you're a network that already owns the rights to your content. This is all headed towards a world where the big ISPs run CDN nodes and all the channels buy delivery from them not because they force them to, but because the big ISPs can run their CDNs with a lower cost base (they already have the interconnects and disk space is cheap). The gatekeepers will still exist because they own a market control point -- you didn't think it was going to be that easy, did you? Apps are an issue, but they're not that cumbersome to create, even cross-platform. I was able to hack together a prototype iOS app that played back video from a CMS attached to a CDN reasonably well in about 4 hours -- and I'm not even a professional developer. For the long tail, there are always services like YouTube and Vimeo -- they're a better fit than a custom app anyway because you get access to a larger audience.
  - dasil003 11y ago
    Your response is orthogonal to my main point—which is that services will be the new channels, and they will have much more power than they did under the cable regime. The mega-services at Netflix/Hulu scale will definitely by CDN capacity direct from ISPs, but that in no way means that these ISPs are gatekeepers with anything near the power that is crumbling from the grasp of the cable companies today. That would only be the case if the ISPs defeat net neutrality and become as evil as possible about restricting outside content to reach their users, and frankly if they twirl their mustache that hard consumers will revolt and regulation will come down on them like a ton of bricks.
kjksf 11y ago
HBO tried to build their streaming service in-house. They hired very competent guy (Microsoft's higher-up from xbox) to lead it. The project failed and was scrapped. It's not easy to do those things from scratch to handle "Games of thrones" premiere traffic. Then they outsourced streaming tech to MLB: http://www.theverge.com/2015/8/4/9090897/mlb-bam-live-streaming-internet-tv-nhl-hbo-now-espn http://www.theverge.com/2015/8/4/9090897/mlb-bam-live-stream...

by exelius 11y ago

ghaff 11y ago

I suspect we'll end up with a rather fragmented landscape of services. It will be potentially complicated for consumers to navigate. It's also probable that consumers will be able to cut their current video content bills but primarily if they're willing to give up access to content that consumers as a whole find valuable. (i.e. give up ESPN, not HGTV.)

slyall 11y ago

Where I am (New Zealand) the whole stream TV/movies business is just started to heat up with about 5 services launching in the last 18 months or so (in a market with just 4 million people). I saw a few recent talks at a Industry event from the providers and the feeling from them is that the content owners wanted very much to avoid a single provider being a monopoly. The impression I get was most people would end up with around 3 providers each charging $10 per month and each with exclusivity on some new shows (or sports I guess).

dasil003 11y ago

Having spent the last 8 years building a Netflix competitor, I think you overestimate the commoditization of VoD tech. You need a lot more than AWS + Akamai. The costs of those are too high for the types of margins a Netflix-like service has. Also, you need apps everywhere, and those apps have to be good. Even though it's getting a lot easier every day, it's still way outside the reach of any individual show, they're just not structurally set up to build and manage the tech side. HBO can do it because they are just barely big enough, but individual shows will never jump that canyon. What's going to happen is not that shows replaces channels, but that services become the new channels. Instead of having a few cable companies monopolizing the last mile, building and running all the distribution tech, and charging an arm and a leg for access, the new model is that there are no gatekeepers on distribution. But that is not to say distribution is a commodity or easy, in fact doing good distribution ala Netflix that cuts across devices, geography, and a long tail of content will become an essential value-add and it will be more competitive than it's ever been.

exelius 11y ago
Having also spent the last decade or so building a similar service, the tech side is commoditized by at least a half dozen companies. The ingest workflow is still somewhat manual, and there's a lot of QA that has to go in to your metadata, but the tech side (transcoding, CDN delivery, etc) are commoditized -- especially if you're a network that already owns the rights to your content. This is all headed towards a world where the big ISPs run CDN nodes and all the channels buy delivery from them not because they force them to, but because the big ISPs can run their CDNs with a lower cost base (they already have the interconnects and disk space is cheap). The gatekeepers will still exist because they own a market control point -- you didn't think it was going to be that easy, did you? Apps are an issue, but they're not that cumbersome to create, even cross-platform. I was able to hack together a prototype iOS app that played back video from a CMS attached to a CDN reasonably well in about 4 hours -- and I'm not even a professional developer. For the long tail, there are always services like YouTube and Vimeo -- they're a better fit than a custom app anyway because you get access to a larger audience.
- dasil003 11y ago
  Your response is orthogonal to my main point—which is that services will be the new channels, and they will have much more power than they did under the cable regime. The mega-services at Netflix/Hulu scale will definitely by CDN capacity direct from ISPs, but that in no way means that these ISPs are gatekeepers with anything near the power that is crumbling from the grasp of the cable companies today. That would only be the case if the ISPs defeat net neutrality and become as evil as possible about restricting outside content to reach their users, and frankly if they twirl their mustache that hard consumers will revolt and regulation will come down on them like a ton of bricks.

kjksf 11y ago

HBO tried to build their streaming service in-house. They hired very competent guy (Microsoft's higher-up from xbox) to lead it. The project failed and was scrapped. It's not easy to do those things from scratch to handle "Games of thrones" premiere traffic. Then they outsourced streaming tech to MLB: http://www.theverge.com/2015/8/4/9090897/mlb-bam-live-streaming-internet-tv-nhl-hbo-now-espn http://www.theverge.com/2015/8/4/9090897/mlb-bam-live-stream...