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I'm the engineering lead on the Silverlight player at Netflix. Honestly, I love it when people underestimate the complexity of the player. To me, it means we'

I'm the engineering lead on the Silverlight player at Netflix. Honestly, I love it when people underestimate the complexity of the player. To me, it means we're doing a good job. 3+ years of releasing every 2 weeks and still no settings dialog. It always just does the right thing. Regarding S3, S3 is not a CDN. To your point about disintermediation, it's a good question. A direct to consumer play by the content owners would cut out Starz as well as Netflix. The last time the studios did that, it didn't end so well: http://en.wikipedia.org/wiki/Paramount_Pictures#1941.E2.80.931950:_United_States_v._Paramount_Pictures.2C_Inc http://en.wikipedia.org/wiki/Paramount_Pictures#1941.E2.80.9.... I can think of a couple good reasons it wouldn't work out today, either. I'd predict that the business model of a content silo would be less profitable than the current system. Studios make more money when they have multiple distribution channels; distributing their own goods would give rise to conflicting incentives. Also, you need the DNA of a software company to compete in the streaming space. Studios are built to make movies; Netflix (and Amazon) are built to make software, and it's software that powers streaming. Even if that software is almost invisible.

CamperBob 15y ago
How come all of your objections (as well as US v Paramount) haven't applied to online game developers as well? Making movies is one hell of a lot easier than developing modern PC/console games, and the game studios are having no qualms with the direct-to-consumer model. Companies like Valve and EA were game developers and publishers long before they started offering services like Steam and Origin. Ultimately, the same Internet that will kill the cable companies will also kill Netflix. (I have more confidence in Netflix to reinvent itself when the time comes, of course, since you've already done it once.)
- jamesgeck0 15y ago
  Valve and EA were software companies with experience delivering content over the internet before they started offering direct download services, though.
  - CamperBob 15y ago
    Sure, but the point is, his "DNA" argument is a complete non-starter. Game studios have to do a ridiculous number of things that have nothing to do with the core business of game design, like rendering, physics, networking, tool development, and so on. The same's true of a few movie studios who've led the way for the rest. Are we supposed to believe that a Pixar or a LucasArts or a James Cameron is somehow incapable of developing and deploying a simple networked Silverlight player? I hope that Netflix's long term business model doesn't depend on the answer to that question being "No, that's not in their DNA."
    - deleted 15y ago
      [deleted]
    - jmellicker 15y ago
      I agree that each content provider developing their own digital distribution system would be inefficient and confusing to the consumer, who desires a simple, centralized menu and search function to locate and view content. It's nice that so many websites offer some kind of streaming video, but the friction of moving from site to site, each with their own navigation and search functions of varying quality, seems like as much trouble to most consumers as getting up and walking across the room to change channels on their TV. Netflix has done a good job in aggregating content, although I don't believe they have a format and business model that is sustainable into the next decade.
- trunnell 15y ago
  My comment about software DNA is not central to my point, so I take that back. Regarding the game business, it's not a good comparison. Selling games is like the DVD business: games are produced at a fixed cost and sold at nearly zero marginal cost. This is true of games sold on disc as well as games sold online through Steam. But this is not how the movie streaming business works. Content is licensed, not sold. It's licensed to a single buyer for a fixed window of time. After that, it's licensed to someone else. This is why HBO, AMC, and Netflix will never be showing the same movie at the same time. This is a profit maximization strategy by the studios. I doubt that major studios would make more profit with a direct to consumer model, at least not with one that would replace the windows in which Netflix typically buys content. It could potentially work for new releases, though. I'll leave the exact reasons why as an exercise to the reader.

CamperBob 15y ago

How come all of your objections (as well as US v Paramount) haven't applied to online game developers as well? Making movies is one hell of a lot easier than developing modern PC/console games, and the game studios are having no qualms with the direct-to-consumer model. Companies like Valve and EA were game developers and publishers long before they started offering services like Steam and Origin. Ultimately, the same Internet that will kill the cable companies will also kill Netflix. (I have more confidence in Netflix to reinvent itself when the time comes, of course, since you've already done it once.)

jamesgeck0 15y ago
Valve and EA were software companies with experience delivering content over the internet before they started offering direct download services, though.
- CamperBob 15y ago
  Sure, but the point is, his "DNA" argument is a complete non-starter. Game studios have to do a ridiculous number of things that have nothing to do with the core business of game design, like rendering, physics, networking, tool development, and so on. The same's true of a few movie studios who've led the way for the rest. Are we supposed to believe that a Pixar or a LucasArts or a James Cameron is somehow incapable of developing and deploying a simple networked Silverlight player? I hope that Netflix's long term business model doesn't depend on the answer to that question being "No, that's not in their DNA."
  - deleted 15y ago
    [deleted]
  - jmellicker 15y ago
    I agree that each content provider developing their own digital distribution system would be inefficient and confusing to the consumer, who desires a simple, centralized menu and search function to locate and view content. It's nice that so many websites offer some kind of streaming video, but the friction of moving from site to site, each with their own navigation and search functions of varying quality, seems like as much trouble to most consumers as getting up and walking across the room to change channels on their TV. Netflix has done a good job in aggregating content, although I don't believe they have a format and business model that is sustainable into the next decade.
trunnell 15y ago
My comment about software DNA is not central to my point, so I take that back. Regarding the game business, it's not a good comparison. Selling games is like the DVD business: games are produced at a fixed cost and sold at nearly zero marginal cost. This is true of games sold on disc as well as games sold online through Steam. But this is not how the movie streaming business works. Content is licensed, not sold. It's licensed to a single buyer for a fixed window of time. After that, it's licensed to someone else. This is why HBO, AMC, and Netflix will never be showing the same movie at the same time. This is a profit maximization strategy by the studios. I doubt that major studios would make more profit with a direct to consumer model, at least not with one that would replace the windows in which Netflix typically buys content. It could potentially work for new releases, though. I'll leave the exact reasons why as an exercise to the reader.