6 ms·

Tech companies are valued based on future potential and as future becomes present, that potential is replaced by a reality that is often much less grand. Netfl

• notduncansmith 8y ago
  Tech is no longer a differentiator in many enterprises, but most small-medium businesses are still barely utilizing what the tech world has made. For example, smooth and useful tech integration is a major differentiator in industries like hospitality, healthcare, logistics, PDR, etc. Mobile/tablet point-of-sale has exploded and enabled a wave of lifestyle entrepreneurs to accept card payment. Smartphone ubiquity has made it much easier to transact with people in your area and abroad, and to help organizations collaborate internally. Still, many people scratch the surface of these capabilities, because their existing low-tech approach has been working for them. With this comes the opportunity to differentiate with solid tech.
  • erikbe 8y ago
    You're right. Many industries still haven't digitalized, and there, adopting "tech" gives a temporary advantage. But it's really just one infrastructure replacing another. It's a hurdle to get over, not a lasting advantage. Tech is commoditized just like it commoditizes other industries.
• autokad 8y ago
  I think content producers weren't going to give netflix a free lunch forever, so they had to start producing their own original content. I dont own netflix, but I do think it's a great idea and a smart investment by them. One thing netflix does with this disruption-wise is the way they think about content. companies like comcast (NBC) still got their heads in broadcast television style producing content, where-as netflix takes a lot of risks, and is ok if a show has a niche following, so long as they have something in their library for everyone. edit: its sad, if content producers thought like this in the past, we'd have more episodes of firefly.
  • erikbe 8y ago
    You're right that they probably weren't going to be able to license all that content indefinitely, so they had to move on and create some other competitive advantage. But then they lost the advantage they had. The subscribers they have today subscribed to the variety it had in its catalog, not Netflix Originals that have replaced it. Netflix is an organization built around distribution, where dependability and efficiency wins. I am highly doubtful that Netflix can produce great stories, whether in movie or series format. They do take a lot of risks (and arguable they would have to because do they have leaders that understand story?) but that in itself is not an advantage. It is only an advantage if it produces better stories and we haven't seen that. In fact, there is a company that is much, much more exciting and successful when it comes to production: Blumhouse Productions. I recommend reading up on their model.
    • pbhjpbhj 8y ago
      > I am highly doubtful that Netflix can produce great stories, whether in movie or series format. // I have UK Netflix, I see no difference in the quality of the stories on Netflix and those on terrestrial TV (which costs more due to BBC license fee). The stories in the Netflix movies are as compelling as other movies IMO, though they don't have the budgets and sometimes that shows more clearly than others. AFAICT we're looking at content producers all having their own walled-garden distribution channels; so they can keep more of the money and squeeze more cash out of consumers as an industry. To fix this it seems we could require content producers to release to any channel if they release to one, giving a global per stream price. So, you release it to your own platform they pay X to the production arm and Y users view it; end of the year everyone else can pay you at a rate of X/Y per stream (plus an admin cost). Maybe that would homogenise streaming channels too much? Remember copyright is an entirely UNnatural right, in theory we get to set its terms to be whatever is best for the demos.
      • malloryerik 8y ago
        > ... we could require content producers to release to any channel if they release to one, giving a global per stream price. Just imagine if, in the physical rental DVD/VHS era, stores could have obtained monopoly distribution rights. Star Wars only at Blockbuster Video. Your suggestion appears worthy of serious consideration.
• keiferski 8y ago
  Netflix’s original content has been lackluster, in my opinion. I would not be surprised if their long-term future potential drops dramatically in the nearer future.
  • erikbe 8y ago
    It probably will. Compare their challenge before - paying to acquire users with a huge content library - to what they have to do now - pay to acquire users with a content library that does not really exist, that they have to pay to build out. I can't imagine how they can manage this financial burden, not to mention actually producing good stories, and recognizable IP.
  • thanatropism 8y ago
    Netflix has about as many original great shows as I remember HBO having 10-15 years ago: two to three a year. They just produce A LOT of stuff, and for people with a habit to consume TV four times a week, it runs out. They have the advantage of being able to use consumer viewing patterns to optimize their new shows, but then the seams are too often visible. Often the shows with better plots suffer from bad acting too. The best of their shows are the ones they seem to have bought as an entire proposition, like "1983" and "Suburra".
    • erikbe 8y ago
      It's highly questionable that you can produce _great_ shows based on data. You can't just go to a producer and tell them, make something about Japan, because it's trending, and use these two actors because they're the most popular at the moment. Creatives don't work based on directives.
      • thanatropism 8y ago
        Which is why the best shows Netflix has tend to be full fledged pitches that they acquired. Compare "Great News" to "The Kominsky Method" or that utterly-unwatchable-beyond-the-second-episode Australian dystopian political show with the Polish dystopian political show "1983".
• sgift 8y ago
  > Netflix is a great example. It went from having a large library because the producers were its friends, to entering production itself, and alienating its former partners. I always thought it's the other way around and Netflix was in a "if life gives you lemons" situation. The content producers in 2010 (or 2005 .. don't know) didn't want to bother with digital, so they just gave it all to Netflix and that's that. Then when time came to renegotiate the existing contracts (let's say in 2015) the situation had changed: Everyone and their dog now knew that digital was great, so half of them didn't want to give Netflix anything anymore. They wanted to be a competitor and Netflix had zero leverage (e.g. Disney), the other half now had a far better understanding of the value of their digital catalogue plus was able to shop around "so, you don't want to pay us our prices? Let us talk with Amazon over here ..". At some point Netflix had to find a way out of that situation and while "we produce our own content" may have a higher initial cost and is not what the existing audience wanted in the long term it frees Netflix from their dependency on competitors.
  • erikbe 8y ago
    Producing content does give Netflix independence, but on the flipside it also means they stand alone. Their former partners are now competitors.
    • sgift 8y ago
      They started to be competitors when they entered the streaming business: Hulu, Disneys new service, ..
    • richmarr 8y ago
      My understanding of this is different. Streaming services are at the mercy of the prices determined by those who own the content. If they make lots of money, up go the licence fees. The decision to create their own content seems like an inevitable consequence of that, and acts as a deflationary force on prices as licenced content has to compete for airtime with content commissioned by the streaming service.
      • 8y ago
• Waterluvian 8y ago
  Interesting perspective. I've felt that Netflix has gotten better. I've certainly been enjoying it more as it makes lots of enjoyable shows and films.
• acdha 8y ago
  > Netflix is a great example. It went from having a large library because the producers were its friends, to entering production itself, and alienating its former partners. This is the opposite of what happened: they had a large library because they were able to cut some deals in the early 2000s when streaming was a niche due to bandwidth and hardware limitations and most of their business was DVDs in the mail. That became popular and the large content owners decided that they wanted a greater cut and especially to avoid what had recently happened in music where iTunes had such a large share of the market that Apple was able to negotiate less consumer-hostile terms with the music industry. Developing their own content is how Netflix is trying to even that up - they profit directly and it makes it harder for one of the large rights-holders to setup a competitor and lure most of their customers over.
• thisisit 8y ago
  > "Tech" here is actually just infrastructure; it's table stakes and not interesting at all. Agreed. Especially when tech becomes commoditized enough that anyone can pick and run with it. And that is what has happened with Netflix. Most companies have realized that getting a streaming service is easy and are trying to get a slice of the OTT pie. But Netflix might actually be valued less and less as time goes by. This is simply because producing content was not their forte and now that they are into content production it will take a concentrated effort to maintain both, good quality of content and a great streaming service. They will be able to pay for content production using the money from streaming but couple of mistakes and both businesses will be affected. This similarly applies to content producers as well. Their forte was to produce great content and not the OTT service. So, they might be able to pay for their OTT division using the profits from the media division. But on a longer time frame many, if not all, streaming services will be unable to replicate the success of Netflix. On a longer timeframe I expect Disney or someone to acquire Netflix or some companies selling their streaming services back to Netflix.