3 ms·

I don't blame them. Netflix had 2 options: 1. Continue licensing content and be subject to the whims of the content creators who can destroy their margin by

by mrep 8y ago

I don't blame them. Netflix had 2 options: 1. Continue licensing content and be subject to the whims of the content creators who can destroy their margin by increasing fees. The content creators can also start their own streaming services like disney is planning on doing eating into that market of streaming. 2. Create their own content eliminating the 2 main risks in option 1. Option 2 is really the only viable option even if competition for content will likely result in content providers (HBO,Showtime,Netflix,Amazon...) not making much profit as the industry goes towards more perfect competition.

onlyrealcuzzo 8y ago
Creating good content is harder than leasing it. Option 2 has it's risks, and honestly they seem higher. Why would Disney or Comcast want Netflix to fail when it's a boon for them currently? Sure, they'll aggressively negotiate the best deals for themselves, sure they'll plan for a backup in the event Netflix would ever stop leasing their content, but why kick a cash cow in the teeth? It's bad business. If anything, Netflix jumped the shark cutting their cheques to the providers and creating their own content.
- jogjayr 8y ago
  > Why would Disney or Comcast want Netflix to fail when it's a boon for them currently? See Pandora for a lesson in what happens when a content distribution company has no pricing power with their suppliers (content producers). Note that Spotify has been paying attention. [1] 1. https://techcrunch.com/2017/02/23/spotify-expands-its-push-into-original-content-with-new-podcasts/ https://techcrunch.com/2017/02/23/spotify-expands-its-push-i...
- raynr 8y ago
  Disney is already working on their streaming service. Disney only wants Netflix around for as long as it takes for Disney to build a competing service made up of only Disney content that you have to pay a premium for. Even from Netflix's stratified perspective, Disney is a juggernaut, and Netflix's bargaining power goes away as soon as Disney has its own service running. Netflix needs to give subscribers a reason to keep their subscriptions going and if licensed content goes away they're going to need compelling original content to keep their subs interested.
- TheCoelacanth 8y ago
  No one really wants a middle man to be making a lot of money off of them. They might tolerate it for some time, but if they ever have an option to do so they are either going to cut out the middle man (sell directly to consumers) or commoditize the middle man (lots of places to get the same content all making only a very small markup). A company with the potential investment capital of Disney or Comcast will almost certainly be able to manage one of those sooner or later. There is no path to long term profitability for Netflix just through reselling content from a few huge media conglomerates.

by mrep 8y ago

onlyrealcuzzo 8y ago

Creating good content is harder than leasing it. Option 2 has it's risks, and honestly they seem higher. Why would Disney or Comcast want Netflix to fail when it's a boon for them currently? Sure, they'll aggressively negotiate the best deals for themselves, sure they'll plan for a backup in the event Netflix would ever stop leasing their content, but why kick a cash cow in the teeth? It's bad business. If anything, Netflix jumped the shark cutting their cheques to the providers and creating their own content.

jogjayr 8y ago
> Why would Disney or Comcast want Netflix to fail when it's a boon for them currently? See Pandora for a lesson in what happens when a content distribution company has no pricing power with their suppliers (content producers). Note that Spotify has been paying attention. [1] 1. https://techcrunch.com/2017/02/23/spotify-expands-its-push-into-original-content-with-new-podcasts/ https://techcrunch.com/2017/02/23/spotify-expands-its-push-i...
raynr 8y ago
Disney is already working on their streaming service. Disney only wants Netflix around for as long as it takes for Disney to build a competing service made up of only Disney content that you have to pay a premium for. Even from Netflix's stratified perspective, Disney is a juggernaut, and Netflix's bargaining power goes away as soon as Disney has its own service running. Netflix needs to give subscribers a reason to keep their subscriptions going and if licensed content goes away they're going to need compelling original content to keep their subs interested.
TheCoelacanth 8y ago
No one really wants a middle man to be making a lot of money off of them. They might tolerate it for some time, but if they ever have an option to do so they are either going to cut out the middle man (sell directly to consumers) or commoditize the middle man (lots of places to get the same content all making only a very small markup). A company with the potential investment capital of Disney or Comcast will almost certainly be able to manage one of those sooner or later. There is no path to long term profitability for Netflix just through reselling content from a few huge media conglomerates.