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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 stro
by 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 agoVery 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.
- GW150914 8y agoI’m not seeing a better catalogue for comparable money, just endless fragmentation with layers of paywalls to access content. What Netflix and emerging platforms have convinced me of is the value and necessity of piracy, ormthe promise of a better future of media consumption will be undermined by greedy rent-seekers. I have no doubt that within a decade they’ll have managed to make the price of access to content more expensive in terms of money and effort than cable ever was.
- lotsofpulp 8y agoIf you can click a button and get the content, then there is no necessity of pirating. Perhaps you don't want to pay what the owners are asking, but that doesn't "necessitate" stealing it. The only time I can think of being forced to pirate is when legacy licensing crap keeps you from being able to watch it where you want, when you want it. But if it's available to buy on iTunes or Amazon or wherever, and all you have to do is pay, then you're either choosing to pay what the owner is asking, or steal it.