15 ms·

How Netflix outsmarted everyone else in TV

150 points by dsr12 8y ago

frandroid 8y ago
>> You were at MTV early. Early-ish. > I sold my company to MTV in March 2000 2000 is not "early" or even "earlish" at MTV, youngun.
lmilcin 8y ago
Well, I don't agree on the "outsmarted" part. I have basically seen all there was to see and new material trickless too slow to keep me. My family is still hooked but they aren't too happy either. If they don't find a new way to keep audience they will soon face prospect of people being bored and leaving for somewhere else.
- dacox 8y ago
  TIL! I am on the Canadian version with even less content, and there's no way I can keep up with the Netflix content, let alone the 3rd party content.
- makira 8y ago
  All my recents searches for old movies were vain. Last Sunday, I wanted to see 'Little Miss Sunshine (2006)', result: not available (in Canada anyway). Unsubscribing has started to cross my mind. When I subscribed for Netflix, the motivation was a large catalog of old movies, cool stuff from other countries (I remember watching TV series from Iceland that were great), no ads. But the greatest selling point: it was more convenient than pirating. Now, it's all about pushing Netflix produced content down my throat using whatever trick possible, and pirating is again more convenient (large catalog, no ads) even if less user-friendly. So yeah, "outsmarted" is really pushing it. I'm not the only one getting bored by the current Netflix direction.
  - plopz 8y ago
    I cancelled my subscription a year and a half ago because of the lack of good content. I've gone back to torrents.
  - dragonwriter 8y ago
    > I'm not the only one getting bored by the current Netflix direction The current Netflix direction is the only one possible; one big catalog only worked before they had proven the viability of mass streaming—once that happened competitors bidding for exclusives (and content owners reserving material for their own services) was inevitable.
- crooked-v 8y ago
  I feel like there's more content in Netflix that I would be interested in but have never seen, but they've increasingly made it so Goddamn hard to find anything while endlessly recycling low-quality content I would never watch and a bunch of content I've already watched on the primary section views.
  - lmilcin 8y ago
    I agree. It would be so nice to have alphabetical index or something akin to that. Instead it seems they care more about hiding the true size of their library than the discoverability of the content within.
    - crooked-v 8y ago
      I wouldn't even need an index. Just a simple "stop recommending this to me" checkbox would be enough to force the front page to stop cycling through the same 50 items endlessly.
  - tokyodude 8y ago
    if their UI would let me browse in peace I'd spent 10-20 minutes looking deep for interesting things to watch. Instead they autoplay everything which I find massively distracting like a used car salesman screaming "Watch This!" so after about 30 seconds I give up and cancel my subscription. Try again in 6 months when there's something I know I want to watch. Always cancel immediately after watching
lostctown 8y ago
As a technologist I couldn't be more impressed by Netflix's rise over the last decade, but the old film artist in me kind of despises the direction they are taking motion pictures. I recently stopped using it and it was like walking out of an incredibly comfortable, yet subtly depressing cave. I found it hard to get out of the cycle of watching only films that I was likely to watch. What humans will eventually discover after we've squeezed every last drop of value out of the monolith ML systems of today is that many facets of our culture do not benefit from traditional recommendations systems. Maybe a more democratized and transparent system for model consumption could help. If indie researchers and hackers can integrate their ML models into existing systems and offer truly diverse ML models then maybe recommendations systems have chance. But in their current state they are laughable representations of the average taste of its users, which is generally not great.
- gxs 8y ago
  This is a good observation and I share the sentiment. AI/ML is great at optimizing what you're currently doing. While it can also find correlations and connections that you may miss without it, it's unlikely that it will make any radical recommendations. IMO this is ok because AI/ML can evolve into that capacity - you have to take baby steps after all. But in the interim, it's definitely something to watch out for - you don't want to take away the element or principal of randomness out of life - it's at the core of how we operate, innovate, and (almost quite literally) how we evolve.
  - GraffitiTim 8y ago
    It would be interesting to see ML recommendations of the form "There is a 75% chance you'll LOVE this movie, 25% chance you'll hate it" rather than only "98% chance you'll like this movie". Right now those 75% movies are actively hidden, as 75% is considered a bad prediction. In other words, rather than optimizing for zero risk of disliking something, allow the user to optimize for the possibility of truly loving something, or being surprised. Especially on Netflix, where the risk is you stop part way through and switch to something else!
    - deleted 8y ago
sambroner 8y ago
Will we end up paying Netflix, HBO, Hulu, Sports streaming the same amount we paid for cable? Maybe we get more granularity, but that comes with the overhead of managing more subscriptions. Who will laugh when we end up paying for a bundle of streaming services?
- Raphael 8y ago
  You could rotate Netflix, HBO, and Hulu as long as they retain their libraries.
- joezydeco 8y ago
  Probably more, since your cable company (sorry, that should read broadband provider) will raise their rates to make up for the lost revenue in TV services.
  - gscott 8y ago
    I subscribed to Direct-TV-Now to save money on television but then hit the bandwidth cap of Cox Cable internet and so now I pay an extra fee for unlimited bandthwidth. I never realized there was a cap until we had multiple tv sets streaming HD video on top of other Internet use.
  - trca 8y ago
    This is actually not true. Smaller cable companies (so anyone smaller than Comcast) traditionally make very little if any profit on cable TV. The entire cost of the cable TV package is made up of the licensing and distribution fees charged by the studios. A (will remain) unnamed provider in the northeast region actually looses money per cable TV subscriber so they can stay competitive against Comcast. They're very excited for the day they can drop their Cable TV packages entirely and solely become a pipe.
- lotsofpulp 8y ago
  You also get choice, ability to cancel stuff you don't like, avoiding ads (at least for now, and then you can cancel if it starts back up again), access whenever you want wherever you are, etc. Many more benefits than the old model.
m3mpp 8y ago
man, only in this world, second rate movies, shitty shows, stupid functionalities like autoplay, they don't even have a decent search...
- dostres 8y ago
  That’s by design. If they had a good search people would discover content was missing faster.
- dcole2929 8y ago
  I mean this is such a straw man argument. It's simply impossible to maintain HBO level quality putting out the amount of content they do. And to make it clear they have no choice but to greenlight that amount of content. Autoplay though was a profoundly good idea. It's literally the reason binge watching exist, which from a business is genius. For what reason do you dislike autoplay? I see nothing wrong with search either. I mostly use the PS4 app in which in works fine. It's admittedly not the best but certainly no worse than any other streaming service and worlds better than what my cable provider has.
  - m3mpp 8y ago
    The whole streaming industry is a joke. It's like fast food for the brain, and I include HBO in it. Where are the documentaries, where are the interviews, there are so many good stuff to watch out there, why the only thing available on all those services is junk, stupid nonsense fiction? I include amazon in that critic. >For what reason do you dislike autoplay? Because it doesn't bring anything but distraction. If I want it to play, I can click, if I want to browse, I don't need a preview. Most of their movies is shit anyway so why would I need to preview them? > It's admittedly not the best but certainly no worse than any other streaming service Amazon is way better, both on their app and website. EDIT: amazon (prime) is better for the search, content wise, it's the same poor selection of violent movies and idiotic documentaries.
- baq 8y ago
  They need to become TV in order to survive, so they are trying. Ads will come, too, it's just a question of when.
dcole2929 8y ago
I think the "outsmarted" part is absolutely correct to an extent. They definitely saw an opportunity that an entire industry didn't. They have absolutely changed the direction of television in pretty much all respects, from release cycle, to delivery to even marketing. However, I think the issues that Netflix has largely encountered now that others are catching on are a result of them not pushing hard enough. It's readily apparent that Hastings and his team saw this opportunity, and were in perfect position to capitalize on it but they didn't show enough faith in the model to make the sorts of long term bets that could have built them an unassailable moat. You get all these shows for whatever crazy amount that no one else would pay but you do relatively short term deals? Certainly Netlfix was ready when the deals started to expire to go all in on original content to replace the stuff they lost, but knowing that the major networks were going to come at you hard once they realized the opportunity they had signed away why wouldn't you push for longer deals? I recognize the sheer economics of the issue but outside of the originals Netflix is losing all the things that originally brought people to the service. If they did 10-15 years it would have been impossible for anyone to catch them as they are doing now.
- lotsofpulp 8y ago
  I don't see why one would assume that Netflix had enough funds at the time to secure rights for longer periods of time. Obviously it is Netflix's interest to have as much content for as long as possible, so the only explanation for why they secured rights for as long as they did was because they didn't have sufficient resources.
  - dcole2929 8y ago
    I'm sure economics played a role but I don't overall find that to be a compelling reason to not shoot for longer deals. They are any number of ways to generate the money necessary and contractually they could have structured things such that there were automatic extensions built in based on arbitrary criteria. I think Netflix took a huge bet, and knew they were doing so and thus hedged their bets. They either hoped they could re-negotiate better deals later on or were scared the service would fail leaving them with huge liabilities.
draw_down 8y ago
Man. I really don't think I would say they've won the race yet. Whatever advantage they have at the moment is not guaranteed to last the next 5 years (or whatever medium-term timespan you like). The depth of content today is really disappointing in comparison with what they used to have, for one thing. The basic question is whether content owners can become Netflix faster than Netflix can build a library of their own worth paying for. And I think the answer to that question is murky at best, but personally I don't think it looks good for Netflix. It's a lot easier to throw money at the distribution problem than the content-creation problem.
jefe_ 8y ago
The other day I noticed the drama films on Netflix this month are very strong. Led to realization that as time passes, the licensing costs for media often decline. When Netflix started streaming in 2007 films that were 5, 10, and 15 years old (less expensive) were produced in 2002, 1997, 1992 respectively. Someone starting college in 2007 would have been between 4 and 14 years old when those films were released. Today, the same 5, 10, 15 targets hit years 2013, 2008, 2002. That user from 2007 is now ~30, and would have been between 14 and 25 when those films were released. As time passes, Netflix will be able to offer more relevant content to their core users at a lower cost. It seems some of their recent original content fills some of the programming gaps for younger users. They are positioned very well.
- jetrink 8y ago
  Interestingly though, they have very little content that is 40+ years old. In the United States, there are currently just 10 films available from the 1960s. Five of those are Bollywood films and three concern Barbara Streisand. There are only four films from the 1950s, including White Christmas, which always make good August viewing. There are so many amazing films from those two decades. Where are they?
  - jedberg 8y ago
    Locked in vaults on deteriorating film masters. It's really hard to find original masters to digitize the older you get. You can't just grab an old laserdisc and encode it -- the resolution isn't good enough. You need to find the old high res film masters. As the AI gets better for restoring old film, it might become possible to find old laserdiscs or even VHS to use as a master, but right not, that's not really possible.
    - peeters 8y ago
      I mean the work has already been done for a heck of a lot of those films though right? A quick search shows oldies.com having 500+ movies from the 60s available in blu-ray. I would assume the rights to those digitalizations belong to the same owner as the rights to stream in most cases.
PaulKeeble 8y ago
I am always going to disappointed that in the end the only model Netflix could follow was that of the cable companies by having its own locked in content. The cable companies didn't want to share their media via the internet and hoarded it and Netflix's attempts to be a modern delivery service failed, so they became a cable TV company over the internet with their own locked in content.
glitchc 8y ago
Netflix hasn't outsmarted anyone really. They are still dependent on the studios for AAA content. It remains to be seen how successful Netflix remains once studios ramp up their own streaming services and start pulling their content from Netflix. I predict it will become another HBO with similar subscription rates.
chaoticmass 8y ago
One thing I lament about Netflix is how people's watching habits have changed around it, and how the programming has also changed in response. A lot of people like to have something playing on the TV that they passively watch while also doing something else. Maybe they put on a show while they browse Instagram, or do house work/cook dinner, or while hanging with friends. Seemingly as a result of this, there are a lot of shows/movies where you don't really need to pay close attention to get the plot because it has been dumbed down, reduced to the most basic strokes. There's more filler in between plot developments. It's like a lot of B-movie schlock with high production value. These shows/movies don't interest me. When I put something on to watch, I sit there and watch it. I want deep plots and fleshed out characters and a lot of Netflix originals seem to lack this.
- iamforreal 8y ago
  I don't think that in itself is a change in viewing habits. There's been plenty of filler tv trash for the last half century, and I've used it in the way you describe even before netflix existed
  - chaoticmass 8y ago
    True. I guess I wish their original programming didn't skew so heavily that direction. It wasn't as much of a problem for me when they still licensed a lot of non-original programming.
    - valarauca1 8y ago
      > I guess I wish their original programming didn't skew so heavily that direction. no it really did. "Shipping" is a classic trope where 2 characters have a will they won't they relationship for several seasons. It is always a good B story to fill otherwise empty space with when writers run out of material. The name literally implies what it is, you are "shipping" a script. quality is slightly irreverent
      - Apocryphon 8y ago
overcast 8y ago
I'm nearly ready to cancel my streaming subscription. There is less and less studio movies I want to see on there, and more Netflix originals. Not that I have an issue with the originals, there are good ones, but there is seriously nothing else worth watching. I still subscribe to Blu-Ray rentals for the following reasons. A. Streaming quality is still poor, particularly audio. The bitstreams are compressed beyond normal DTS/DD compression, and it sounds like garbage in comparison to the lossless tracks on physical disks. To me the audio track is 90% of any movie. B. It's impossible to find the vast majority of movies on streaming. If something pops up, it disappears in a month or so. Out of FIVE HUNDRED physical discs queued up, only TWELVE are available on streaming. I seriously fear the day they get rid of physical disk rental all together. Their catalog is expansive, and we have ZERO other options now. I just bumped from 2 discs to 3 discs out at a time, because we no longer have 1 day turn around times on returning and sending out discs. It's nearly impossible to get one back the same week unless you send it out Monday or Tuesday.
- ghaff 8y ago
  I still get disks for the same reason. Unfortunately they're literally letting their back catalog rot with more and more in-print films no longer available. Unfortunately at least some of them aren't available on a la carte streaming services.
  - overcast 8y ago
    Really not sure what is going to happen to the cinephile demographic if they do away with their physical library. I'm not going to deal with 8 different streaming sites, all with poor quality.
    - rangibaby 8y ago
      There’s always TPB
      - ghaff 8y ago
        Which is pretty marginal for non-mainstream content. The answer is that you're probably buying anything on disc that is at all obscure. Which isn't actually that bad. DVDs aren't super-expensive for the most part.
remir 8y ago
There's a lot of hype about Netflix, but beside Stranger Things, and some "old" movies here and there, I'm not that much impressed. After I watched what interested me, I cancelled my subscription.
- WilliamEdward 8y ago
  You're not the market. I keep finding new things I want to watch, to the point where there's almost too much choice.
  - mywittyname 8y ago
    If you're a 30-something white male who likes comedies and fantasy, you'll never want for content on Netflix. I can tell that other demographics are not nearly as satisfied though.
  - smacktoward 8y ago
    "You're not the market. I'm the market!"
  - jkmcf 8y ago
    I agree. My watch list is like 40 films or series' long. A lot of that is Chinese kung fu movies, but I really love the cinematography and locations. Additionally, Netflix provides me my BBC mystery fixes (Shetland, Midsommer Murders, etc...)
- overcast 8y ago
  Out of all the content on there Stranger Things really is some of the weakest. Nostalgia city sure, but that story is weak as shit.
sarcasmic 8y ago
The 'old guard' wasn't wrong; Netflix pretty much were suckers for licensing a bunch of old content. The part in the transcript where he presents this as a stroke of genius that led to the pivot to original content is a rosy-glass view that gives Netflix too much credit. In my opinion, this fate came about entirely because of the content owners and not because of Netflix. Netflix basically needed to bootstrap its streaming service with content, so they paid a bunch for syndication. They then sold an all-you-can-eat plan at a low price. Their success butted against pay-per-view providers, other syndicators, and content owners: Netflix blazed the trail and proved that people sign up for video-on-demand in droves if it carries content people want to watch, and is cheap enough to where one doesn't have to think about every view. But this devalued the content, so studios yanked their newer seasons and put them on knock-off platforms for a separate subscription. This development meant Netflix had to start making deals with less controlling content providers, or produce content of their own. On the other side of the house, Hulu was able to justify its price point by offering current seasons of popular shows, and being a joint venture of influential content owners, but single-owner offerings struggled for customers, unless the IP was exceptional. This is why HBO hasn't yet died in this space, and Disney will likely succeed on their own, but also-rans no longer offer enough in a crowded market. By the end of the article, they do descend to reality and identify the magic formula: Netflix makes money from the subscription, and a constant flow of offerings both strong and mediocre will tide the user over to make them not consider cancelling. And in time, the ever-expanding catalog is insurance for a change in market headwinds. The key, though, is will Netflix be able to convince the consumer to part with their money when other platforms with the same business model offer a more compelling catalog? In the long run, that remains to be seen.
- gumby 8y ago
  Very much so. Netflix was strong when they ran the DVD business as they could show almost anything simply by buying a copy. But the licensing deals have obscure time limits (and once the licensors saw how Netflix was doing they of course raised the prices, held back key content, shortened the windows etc). They downside of showing only your own content is that you need a pretty high percentage of winners (diversity of viewers increases your odds, but still). A "drought" can kill you. And as a result, Paramount, 20th century Fox, MGM etc are irrelevant to the viewers' choices.
rpoconn1 8y ago
9 minutes of commercials per 1/2 hour? Ice road truckers level content? The bar was really low here. I wouldn't give Netflix too much credit, although IMHO they are doing the best out of their competitors (AMZ, Hulu, etc..).
40acres 8y ago
Netflix definitely found greenfield with their business model, however the next few years will be decided by who can create the best original content. Netflix has spent billions on content: signing popular writers / show runners to long term contracts and picking up movies in the indie scene for distribution. However I still don't think they've had a massive hit, nothing Netflix has made can touch Game of Thrones or the Sopranos for cultural impact, and critically even Amazon Studios has had an Oscar nominee (although I think Beasts of No Nation was robbed for not getting a best actor nom). Disney is rolling out their own streaming service and I'd bet that eventually they will roll ESPN+ into the deal and maybe even ESPN entirely itself. I think once sports gets into the mix the entire streaming domain will radically change.
- tener 8y ago
  Do they need a massive hit though? I for one appreciate the diversity that is available on Netflix. Surely they can match people's tastes better this way. Still I'm rooting for the Witcher to be a big hit.
  - 40acres 8y ago
    I think so, as mentioned Netflix has definitely changed the game but when it comes to awards success and cultural impact I think they've been lacking. Netflix doesn't release viewing numbers so it's hard to tell but traditionally every big network provider has had a generational hit now and then (Grey's Anatomy, Big Bang Theory, Family Guy, etc.). As other streaming services catch up (and I think they will) services will need to differentiate with original content that you just can't miss.
    - deleted 8y ago
      [deleted]
    - chris11 8y ago
      I kind of wonder if Netflix's decision to release a show a season at a time changes cultural success. All of those shows were weekly, so they stuck around in your head and in general conversation. Netflix you can binge watch, so after a month or two you probably aren't watching it anymore.
rajacombinator 8y ago
Tough times ahead for Netflix. Their model is broken and smart money is leaving the service. Why pay monthly for a bunch of crap shows I don’t like. They have no edge vs competition. Prime, Hulu, etc all offer the same thing it’s just a matter of whose lineup is better and Netflix can’t produce enough content to compete on that.
sambe 8y ago
I feel more and more done with paid streaming services. Even Netflix seems to make their interface progressively more intrusive and less useful. Their content seems to vanish and get replaced with "original content" - conspiratorial documentaries, mostly. For sure there is still some value there, but it's more and more distributed across platforms, with worse and worse usability. Often I find I'm paying for multiple expensive services and can't find a way to stream what I'm looking for. Or (Amazon Prime!) I can rent it from a service I already pay monthly for. TV had lower expectations. On-demand but sort-of-not-really-and-you-have-to-pay-again-and-watch-more-ads is frustrating.
telltruth 8y ago
Stock market aside, it is yet to be seen if Netflix model is viable on long term. Current content budget growth is larger than revenue growth and lot of the new memberships are coming from International market which will saturate at some point. The basic hypothesis here is that $10/mo per subscriber would be enough to sustain roughly $700 million/mo content budget. This is quite possible if you had 70 million subscribers. HBO on the other hand 130 million subscribers but they do this by sneaking in package deals with cable plans. However there is no magic here with idea or business plan. You can think of whole deal as Netflix turning itself in to Internet version of HBO. It will just work as good or as bad.
partycoder 8y ago
Because they track what people like and give people more of that.

150 points by dsr12 8y ago

>> You were at MTV early. Early-ish. > I sold my company to MTV in March 2000 2000 is not "early" or even "earlish" at MTV, youngun.

lmilcin 8y ago

Well, I don't agree on the "outsmarted" part. I have basically seen all there was to see and new material trickless too slow to keep me. My family is still hooked but they aren't too happy either. If they don't find a new way to keep audience they will soon face prospect of people being bored and leaving for somewhere else.

dacox 8y ago
TIL! I am on the Canadian version with even less content, and there's no way I can keep up with the Netflix content, let alone the 3rd party content.
makira 8y ago
All my recents searches for old movies were vain. Last Sunday, I wanted to see 'Little Miss Sunshine (2006)', result: not available (in Canada anyway). Unsubscribing has started to cross my mind. When I subscribed for Netflix, the motivation was a large catalog of old movies, cool stuff from other countries (I remember watching TV series from Iceland that were great), no ads. But the greatest selling point: it was more convenient than pirating. Now, it's all about pushing Netflix produced content down my throat using whatever trick possible, and pirating is again more convenient (large catalog, no ads) even if less user-friendly. So yeah, "outsmarted" is really pushing it. I'm not the only one getting bored by the current Netflix direction.
- plopz 8y ago
  I cancelled my subscription a year and a half ago because of the lack of good content. I've gone back to torrents.
- dragonwriter 8y ago
  > I'm not the only one getting bored by the current Netflix direction The current Netflix direction is the only one possible; one big catalog only worked before they had proven the viability of mass streaming—once that happened competitors bidding for exclusives (and content owners reserving material for their own services) was inevitable.
crooked-v 8y ago
I feel like there's more content in Netflix that I would be interested in but have never seen, but they've increasingly made it so Goddamn hard to find anything while endlessly recycling low-quality content I would never watch and a bunch of content I've already watched on the primary section views.
- lmilcin 8y ago
  I agree. It would be so nice to have alphabetical index or something akin to that. Instead it seems they care more about hiding the true size of their library than the discoverability of the content within.
  - crooked-v 8y ago
    I wouldn't even need an index. Just a simple "stop recommending this to me" checkbox would be enough to force the front page to stop cycling through the same 50 items endlessly.
- tokyodude 8y ago
  if their UI would let me browse in peace I'd spent 10-20 minutes looking deep for interesting things to watch. Instead they autoplay everything which I find massively distracting like a used car salesman screaming "Watch This!" so after about 30 seconds I give up and cancel my subscription. Try again in 6 months when there's something I know I want to watch. Always cancel immediately after watching

lostctown 8y ago

As a technologist I couldn't be more impressed by Netflix's rise over the last decade, but the old film artist in me kind of despises the direction they are taking motion pictures. I recently stopped using it and it was like walking out of an incredibly comfortable, yet subtly depressing cave. I found it hard to get out of the cycle of watching only films that I was likely to watch. What humans will eventually discover after we've squeezed every last drop of value out of the monolith ML systems of today is that many facets of our culture do not benefit from traditional recommendations systems. Maybe a more democratized and transparent system for model consumption could help. If indie researchers and hackers can integrate their ML models into existing systems and offer truly diverse ML models then maybe recommendations systems have chance. But in their current state they are laughable representations of the average taste of its users, which is generally not great.

gxs 8y ago
This is a good observation and I share the sentiment. AI/ML is great at optimizing what you're currently doing. While it can also find correlations and connections that you may miss without it, it's unlikely that it will make any radical recommendations. IMO this is ok because AI/ML can evolve into that capacity - you have to take baby steps after all. But in the interim, it's definitely something to watch out for - you don't want to take away the element or principal of randomness out of life - it's at the core of how we operate, innovate, and (almost quite literally) how we evolve.
- GraffitiTim 8y ago
  It would be interesting to see ML recommendations of the form "There is a 75% chance you'll LOVE this movie, 25% chance you'll hate it" rather than only "98% chance you'll like this movie". Right now those 75% movies are actively hidden, as 75% is considered a bad prediction. In other words, rather than optimizing for zero risk of disliking something, allow the user to optimize for the possibility of truly loving something, or being surprised. Especially on Netflix, where the risk is you stop part way through and switch to something else!
  - deleted 8y ago

sambroner 8y ago

Will we end up paying Netflix, HBO, Hulu, Sports streaming the same amount we paid for cable? Maybe we get more granularity, but that comes with the overhead of managing more subscriptions. Who will laugh when we end up paying for a bundle of streaming services?

Raphael 8y ago
You could rotate Netflix, HBO, and Hulu as long as they retain their libraries.
joezydeco 8y ago
Probably more, since your cable company (sorry, that should read broadband provider) will raise their rates to make up for the lost revenue in TV services.
- gscott 8y ago
  I subscribed to Direct-TV-Now to save money on television but then hit the bandwidth cap of Cox Cable internet and so now I pay an extra fee for unlimited bandthwidth. I never realized there was a cap until we had multiple tv sets streaming HD video on top of other Internet use.
- trca 8y ago
  This is actually not true. Smaller cable companies (so anyone smaller than Comcast) traditionally make very little if any profit on cable TV. The entire cost of the cable TV package is made up of the licensing and distribution fees charged by the studios. A (will remain) unnamed provider in the northeast region actually looses money per cable TV subscriber so they can stay competitive against Comcast. They're very excited for the day they can drop their Cable TV packages entirely and solely become a pipe.
lotsofpulp 8y ago
You also get choice, ability to cancel stuff you don't like, avoiding ads (at least for now, and then you can cancel if it starts back up again), access whenever you want wherever you are, etc. Many more benefits than the old model.

m3mpp 8y ago

man, only in this world, second rate movies, shitty shows, stupid functionalities like autoplay, they don't even have a decent search...

dostres 8y ago
That’s by design. If they had a good search people would discover content was missing faster.
dcole2929 8y ago
I mean this is such a straw man argument. It's simply impossible to maintain HBO level quality putting out the amount of content they do. And to make it clear they have no choice but to greenlight that amount of content. Autoplay though was a profoundly good idea. It's literally the reason binge watching exist, which from a business is genius. For what reason do you dislike autoplay? I see nothing wrong with search either. I mostly use the PS4 app in which in works fine. It's admittedly not the best but certainly no worse than any other streaming service and worlds better than what my cable provider has.
- m3mpp 8y ago
  The whole streaming industry is a joke. It's like fast food for the brain, and I include HBO in it. Where are the documentaries, where are the interviews, there are so many good stuff to watch out there, why the only thing available on all those services is junk, stupid nonsense fiction? I include amazon in that critic. >For what reason do you dislike autoplay? Because it doesn't bring anything but distraction. If I want it to play, I can click, if I want to browse, I don't need a preview. Most of their movies is shit anyway so why would I need to preview them? > It's admittedly not the best but certainly no worse than any other streaming service Amazon is way better, both on their app and website. EDIT: amazon (prime) is better for the search, content wise, it's the same poor selection of violent movies and idiotic documentaries.
baq 8y ago
They need to become TV in order to survive, so they are trying. Ads will come, too, it's just a question of when.

dcole2929 8y ago

I think the "outsmarted" part is absolutely correct to an extent. They definitely saw an opportunity that an entire industry didn't. They have absolutely changed the direction of television in pretty much all respects, from release cycle, to delivery to even marketing. However, I think the issues that Netflix has largely encountered now that others are catching on are a result of them not pushing hard enough. It's readily apparent that Hastings and his team saw this opportunity, and were in perfect position to capitalize on it but they didn't show enough faith in the model to make the sorts of long term bets that could have built them an unassailable moat. You get all these shows for whatever crazy amount that no one else would pay but you do relatively short term deals? Certainly Netlfix was ready when the deals started to expire to go all in on original content to replace the stuff they lost, but knowing that the major networks were going to come at you hard once they realized the opportunity they had signed away why wouldn't you push for longer deals? I recognize the sheer economics of the issue but outside of the originals Netflix is losing all the things that originally brought people to the service. If they did 10-15 years it would have been impossible for anyone to catch them as they are doing now.

lotsofpulp 8y ago
I don't see why one would assume that Netflix had enough funds at the time to secure rights for longer periods of time. Obviously it is Netflix's interest to have as much content for as long as possible, so the only explanation for why they secured rights for as long as they did was because they didn't have sufficient resources.
- dcole2929 8y ago
  I'm sure economics played a role but I don't overall find that to be a compelling reason to not shoot for longer deals. They are any number of ways to generate the money necessary and contractually they could have structured things such that there were automatic extensions built in based on arbitrary criteria. I think Netflix took a huge bet, and knew they were doing so and thus hedged their bets. They either hoped they could re-negotiate better deals later on or were scared the service would fail leaving them with huge liabilities.

draw_down 8y ago

Man. I really don't think I would say they've won the race yet. Whatever advantage they have at the moment is not guaranteed to last the next 5 years (or whatever medium-term timespan you like). The depth of content today is really disappointing in comparison with what they used to have, for one thing. The basic question is whether content owners can become Netflix faster than Netflix can build a library of their own worth paying for. And I think the answer to that question is murky at best, but personally I don't think it looks good for Netflix. It's a lot easier to throw money at the distribution problem than the content-creation problem.

jefe_ 8y ago

The other day I noticed the drama films on Netflix this month are very strong. Led to realization that as time passes, the licensing costs for media often decline. When Netflix started streaming in 2007 films that were 5, 10, and 15 years old (less expensive) were produced in 2002, 1997, 1992 respectively. Someone starting college in 2007 would have been between 4 and 14 years old when those films were released. Today, the same 5, 10, 15 targets hit years 2013, 2008, 2002. That user from 2007 is now ~30, and would have been between 14 and 25 when those films were released. As time passes, Netflix will be able to offer more relevant content to their core users at a lower cost. It seems some of their recent original content fills some of the programming gaps for younger users. They are positioned very well.

jetrink 8y ago
Interestingly though, they have very little content that is 40+ years old. In the United States, there are currently just 10 films available from the 1960s. Five of those are Bollywood films and three concern Barbara Streisand. There are only four films from the 1950s, including White Christmas, which always make good August viewing. There are so many amazing films from those two decades. Where are they?
- jedberg 8y ago
  Locked in vaults on deteriorating film masters. It's really hard to find original masters to digitize the older you get. You can't just grab an old laserdisc and encode it -- the resolution isn't good enough. You need to find the old high res film masters. As the AI gets better for restoring old film, it might become possible to find old laserdiscs or even VHS to use as a master, but right not, that's not really possible.
  - peeters 8y ago
    I mean the work has already been done for a heck of a lot of those films though right? A quick search shows oldies.com having 500+ movies from the 60s available in blu-ray. I would assume the rights to those digitalizations belong to the same owner as the rights to stream in most cases.

PaulKeeble 8y ago

I am always going to disappointed that in the end the only model Netflix could follow was that of the cable companies by having its own locked in content. The cable companies didn't want to share their media via the internet and hoarded it and Netflix's attempts to be a modern delivery service failed, so they became a cable TV company over the internet with their own locked in content.

glitchc 8y ago

Netflix hasn't outsmarted anyone really. They are still dependent on the studios for AAA content. It remains to be seen how successful Netflix remains once studios ramp up their own streaming services and start pulling their content from Netflix. I predict it will become another HBO with similar subscription rates.

chaoticmass 8y ago

One thing I lament about Netflix is how people's watching habits have changed around it, and how the programming has also changed in response. A lot of people like to have something playing on the TV that they passively watch while also doing something else. Maybe they put on a show while they browse Instagram, or do house work/cook dinner, or while hanging with friends. Seemingly as a result of this, there are a lot of shows/movies where you don't really need to pay close attention to get the plot because it has been dumbed down, reduced to the most basic strokes. There's more filler in between plot developments. It's like a lot of B-movie schlock with high production value. These shows/movies don't interest me. When I put something on to watch, I sit there and watch it. I want deep plots and fleshed out characters and a lot of Netflix originals seem to lack this.

iamforreal 8y ago
I don't think that in itself is a change in viewing habits. There's been plenty of filler tv trash for the last half century, and I've used it in the way you describe even before netflix existed
- chaoticmass 8y ago
  True. I guess I wish their original programming didn't skew so heavily that direction. It wasn't as much of a problem for me when they still licensed a lot of non-original programming.
  - valarauca1 8y ago
    > I guess I wish their original programming didn't skew so heavily that direction. no it really did. "Shipping" is a classic trope where 2 characters have a will they won't they relationship for several seasons. It is always a good B story to fill otherwise empty space with when writers run out of material. The name literally implies what it is, you are "shipping" a script. quality is slightly irreverent
    - Apocryphon 8y ago

overcast 8y ago

I'm nearly ready to cancel my streaming subscription. There is less and less studio movies I want to see on there, and more Netflix originals. Not that I have an issue with the originals, there are good ones, but there is seriously nothing else worth watching. I still subscribe to Blu-Ray rentals for the following reasons. A. Streaming quality is still poor, particularly audio. The bitstreams are compressed beyond normal DTS/DD compression, and it sounds like garbage in comparison to the lossless tracks on physical disks. To me the audio track is 90% of any movie. B. It's impossible to find the vast majority of movies on streaming. If something pops up, it disappears in a month or so. Out of FIVE HUNDRED physical discs queued up, only TWELVE are available on streaming. I seriously fear the day they get rid of physical disk rental all together. Their catalog is expansive, and we have ZERO other options now. I just bumped from 2 discs to 3 discs out at a time, because we no longer have 1 day turn around times on returning and sending out discs. It's nearly impossible to get one back the same week unless you send it out Monday or Tuesday.

ghaff 8y ago
I still get disks for the same reason. Unfortunately they're literally letting their back catalog rot with more and more in-print films no longer available. Unfortunately at least some of them aren't available on a la carte streaming services.
- overcast 8y ago
  Really not sure what is going to happen to the cinephile demographic if they do away with their physical library. I'm not going to deal with 8 different streaming sites, all with poor quality.
  - rangibaby 8y ago
    There’s always TPB
    - ghaff 8y ago
      Which is pretty marginal for non-mainstream content. The answer is that you're probably buying anything on disc that is at all obscure. Which isn't actually that bad. DVDs aren't super-expensive for the most part.

remir 8y ago

There's a lot of hype about Netflix, but beside Stranger Things, and some "old" movies here and there, I'm not that much impressed. After I watched what interested me, I cancelled my subscription.

WilliamEdward 8y ago
You're not the market. I keep finding new things I want to watch, to the point where there's almost too much choice.
- mywittyname 8y ago
  If you're a 30-something white male who likes comedies and fantasy, you'll never want for content on Netflix. I can tell that other demographics are not nearly as satisfied though.
- smacktoward 8y ago
  "You're not the market. I'm the market!"
- jkmcf 8y ago
  I agree. My watch list is like 40 films or series' long. A lot of that is Chinese kung fu movies, but I really love the cinematography and locations. Additionally, Netflix provides me my BBC mystery fixes (Shetland, Midsommer Murders, etc...)
overcast 8y ago
Out of all the content on there Stranger Things really is some of the weakest. Nostalgia city sure, but that story is weak as shit.

sarcasmic 8y ago

The 'old guard' wasn't wrong; Netflix pretty much were suckers for licensing a bunch of old content. The part in the transcript where he presents this as a stroke of genius that led to the pivot to original content is a rosy-glass view that gives Netflix too much credit. In my opinion, this fate came about entirely because of the content owners and not because of Netflix. Netflix basically needed to bootstrap its streaming service with content, so they paid a bunch for syndication. They then sold an all-you-can-eat plan at a low price. Their success butted against pay-per-view providers, other syndicators, and content owners: Netflix blazed the trail and proved that people sign up for video-on-demand in droves if it carries content people want to watch, and is cheap enough to where one doesn't have to think about every view. But this devalued the content, so studios yanked their newer seasons and put them on knock-off platforms for a separate subscription. This development meant Netflix had to start making deals with less controlling content providers, or produce content of their own. On the other side of the house, Hulu was able to justify its price point by offering current seasons of popular shows, and being a joint venture of influential content owners, but single-owner offerings struggled for customers, unless the IP was exceptional. This is why HBO hasn't yet died in this space, and Disney will likely succeed on their own, but also-rans no longer offer enough in a crowded market. By the end of the article, they do descend to reality and identify the magic formula: Netflix makes money from the subscription, and a constant flow of offerings both strong and mediocre will tide the user over to make them not consider cancelling. And in time, the ever-expanding catalog is insurance for a change in market headwinds. The key, though, is will Netflix be able to convince the consumer to part with their money when other platforms with the same business model offer a more compelling catalog? In the long run, that remains to be seen.

gumby 8y ago
Very much so. Netflix was strong when they ran the DVD business as they could show almost anything simply by buying a copy. But the licensing deals have obscure time limits (and once the licensors saw how Netflix was doing they of course raised the prices, held back key content, shortened the windows etc). They downside of showing only your own content is that you need a pretty high percentage of winners (diversity of viewers increases your odds, but still). A "drought" can kill you. And as a result, Paramount, 20th century Fox, MGM etc are irrelevant to the viewers' choices.

rpoconn1 8y ago

9 minutes of commercials per 1/2 hour? Ice road truckers level content? The bar was really low here. I wouldn't give Netflix too much credit, although IMHO they are doing the best out of their competitors (AMZ, Hulu, etc..).

40acres 8y ago

Netflix definitely found greenfield with their business model, however the next few years will be decided by who can create the best original content. Netflix has spent billions on content: signing popular writers / show runners to long term contracts and picking up movies in the indie scene for distribution. However I still don't think they've had a massive hit, nothing Netflix has made can touch Game of Thrones or the Sopranos for cultural impact, and critically even Amazon Studios has had an Oscar nominee (although I think Beasts of No Nation was robbed for not getting a best actor nom). Disney is rolling out their own streaming service and I'd bet that eventually they will roll ESPN+ into the deal and maybe even ESPN entirely itself. I think once sports gets into the mix the entire streaming domain will radically change.

tener 8y ago
Do they need a massive hit though? I for one appreciate the diversity that is available on Netflix. Surely they can match people's tastes better this way. Still I'm rooting for the Witcher to be a big hit.
- 40acres 8y ago
  I think so, as mentioned Netflix has definitely changed the game but when it comes to awards success and cultural impact I think they've been lacking. Netflix doesn't release viewing numbers so it's hard to tell but traditionally every big network provider has had a generational hit now and then (Grey's Anatomy, Big Bang Theory, Family Guy, etc.). As other streaming services catch up (and I think they will) services will need to differentiate with original content that you just can't miss.
  - deleted 8y ago
    [deleted]
  - chris11 8y ago
    I kind of wonder if Netflix's decision to release a show a season at a time changes cultural success. All of those shows were weekly, so they stuck around in your head and in general conversation. Netflix you can binge watch, so after a month or two you probably aren't watching it anymore.

rajacombinator 8y ago

Tough times ahead for Netflix. Their model is broken and smart money is leaving the service. Why pay monthly for a bunch of crap shows I don’t like. They have no edge vs competition. Prime, Hulu, etc all offer the same thing it’s just a matter of whose lineup is better and Netflix can’t produce enough content to compete on that.

sambe 8y ago

I feel more and more done with paid streaming services. Even Netflix seems to make their interface progressively more intrusive and less useful. Their content seems to vanish and get replaced with "original content" - conspiratorial documentaries, mostly. For sure there is still some value there, but it's more and more distributed across platforms, with worse and worse usability. Often I find I'm paying for multiple expensive services and can't find a way to stream what I'm looking for. Or (Amazon Prime!) I can rent it from a service I already pay monthly for. TV had lower expectations. On-demand but sort-of-not-really-and-you-have-to-pay-again-and-watch-more-ads is frustrating.

telltruth 8y ago

Stock market aside, it is yet to be seen if Netflix model is viable on long term. Current content budget growth is larger than revenue growth and lot of the new memberships are coming from International market which will saturate at some point. The basic hypothesis here is that $10/mo per subscriber would be enough to sustain roughly $700 million/mo content budget. This is quite possible if you had 70 million subscribers. HBO on the other hand 130 million subscribers but they do this by sneaking in package deals with cable plans. However there is no magic here with idea or business plan. You can think of whole deal as Netflix turning itself in to Internet version of HBO. It will just work as good or as bad.

partycoder 8y ago

Because they track what people like and give people more of that.