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Netflix's New Chapter

287 points by jkestner 4y ago

based_bobby 4y ago
[dead]
WelcomeShorty 4y ago
Cool story about Netflix growth and growing pains. I have 0 knowledge about the subject so can not judge the correctness.
jedberg 4y ago
Netflix only lost to Blockbuster because Blockbuster didn't believe in online anything strongly enough to properly fund it. Blockbuster had the better network and better penetration, and even had equally good technology. But corporate didn't want to fund them to hire the next set of engineers they needed. Blockbuster would have won if their board had been just slightly more forward looking. And Netflix knew it.
- cjbgkagh 4y ago
  I wonder if it would have been possible to ‘bribe’ blockbuster executives into making such decisions. As much as Blockbuster was prepared to pay them to do their jobs I’m sure Netflix would have offered them more to not do their jobs. An indirect/legal way to do this would simply be to poach talent away with good offers, easy to do when you’re poised for substantial growth.
- Waterluvian 4y ago
  Isn't this the Sears case again? They were the veteran incumbent with a mountain of experience in the industry, but turning a corporate ship on a dime seems to be impossible. I guess that manifests as a form of "corporate didn't believe in..." or "didn't invest in the engineering" as you say.
  - macintux 4y ago
    Aka https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
  - jedberg 4y ago
    It was worse than that though. They had already built a second ship pointed in the right direction, it just needed a little bit of extra fuel. They had already innovated.
  - BobbyJo 4y ago
    You can keep the shareholder calls easy for now by just keeping costs low and praying. If you suddenly add a new high cost department that isn't going to be pulling in revenue for 12+ months, those calls are going to get harder, and you need to have the clout with your investors to convince them it's the right more. If you're a hired CEO who's done nothing but tweak logistics and optimize inventory, then they aren't going to trust that you are making the correct move when it comes to completely changing customer acquisition and product delivery.
  - hinkley 4y ago
    If you didn't have the Sears Catalog you had the JC Penney catalog. They both dropped the ball, probably by watching each other to see who blinked first.
  - WorldMaker 4y ago
    Sears was already in the wrong place at that time because not just was it incapable of turning on a dime, it already had corporate raiders inside it turning over every couch for leftover dimes. It was already getting chopped up and shopped for parts by the time the internet arrived.
  - joncrane 4y ago
    Kodak is another great example.
- me_me_me 4y ago
  Google has massive range and tons of way to push their services onto users, and google+ failed miserably. Resources are not guarantee of success.
  - Sohcahtoa82 4y ago
    I'm convinced that what killed Google+ was their slow rollout, which was an absolutely bone-headed move that I'm really surprised a company like Google would make. Google+ was a social network. For a social network to have any value, you need your friends to be on it as well. By making it invite-only and throttling how many people could join, they guaranteed that most of your friends weren't there and COULDN'T be there. There were so many memes being made of Google+ being described as this amazing party you got invited to, only to get there and find there's nobody there. GMail being invite-only at first wasn't a problem because using GMail didn't require everybody you sent/received e-mails to/from to be on GMail as well.
    - function_seven 4y ago
      Yes. It seems like they learned the wrong lesson from both Gmail as well as Facebook. With Gmail, the invite-only rollout had the effect of making the service seem exclusive and valuable. I remember getting my invite from a friend and being “let into the club”. (I didn’t take it that seriously, but the feeling of being “in” was still kinda there). And as you note, email still works across providers, so no network effects were harmed. Facebook also had early exclusivity, but it was entire cohort schools at once! If I was allowed to create a FB account, that meant all my classmates were also being admitted to the club. G+ didn’t start with any natural cohorts, so being rolled out slowly just guaranteed that initial experiences were tumbleweeds and disappointment.
    - ben7799 4y ago
      Excellent point. It's easy to remember google stuff used to be limited and "cool" and it was desirable to get an invite. G+ was around the time that started to swing around and people didn't think Google was so amazing or desirable.
    - 4y ago
no_wizard 4y ago
I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - Therefore, Netflix needs to do what it can to retain / attract subscribers, but essentially can wait until the other services have to give up due to cost In a nutshell, Netflix is poised to play more long game, due to cost structures of their competitors. so fair, sounds good, but it assumes the boards / leadership of these companies won't also play a long game, seeing some sort of profitability horizon is they cannibalize their existing businesses for sticky services (like streaming). I could see Disney doing this, to some extent, with their cable TV channels and movies. I'm less bullish on Comcast/NBC, CBS/Viacom or really any other media company being able to do this, simply because they don't have the "staying power" Disney does. This also fails to account for the strength of HBO Max (very strong sub numbers)
- b112 4y ago
  HBO / Netflix merger FTW?
  - exhilaration 4y ago
    HBO is owned by Warner Bros. Discovery, likely one of their most valuable assets. I can't see them giving it up.
    - de_keyboard 4y ago
      Indeed. Feels like vast majority of the TV worth watching is HBO. I value my time so I'd rather have access to a few HBO series / year than an endless sea of A/B dross.
  - no_wizard 4y ago
    That would now mean buying out WarnerMedia Discovery Group which just merged, and WarnerMedia was the owner of HBO before that. AT&T was forced to divest at least. Never the less, that would be a massive acquisition, they carry alot of debt.
rvz 4y ago
I can only see Microsoft acquiring Netflix on the horizon at this point.
- JumpCrisscross 4y ago
  > can only see Microsoft acquiring Netflix This makes no sense. Microsoft licensing e.g. the Halo franchise to Netflix for serialization is a solid pitch.
  - snickerbockers 4y ago
    they already did that with paramount+
- Cymrukicks 4y ago
  That would actually be a monster acquisition. A huge blow for AWS aswell as they would no doubt switch to Azure.
xrd 4y ago
The first time I've seen a well written critique of activist investors like Carl Icahn. He certainly scuttled any chance that Blockbuster had of succeeding. He's often right about small details when it comes to traditional companies and where to cut costs (as are many activist investors), but this story reads like he sabotaged Blockbuster when it had an actual substantial and viable chance to compete. I had not heard this story before, I always assumed Blockbuster was just too dumb to compete, but it wasn't the case at all. And, interesting if people like Hastings knew the forces at play in his competitors, and as Strategery points out, can play the long game when they know their competitors can't. Terrific article, as usual.
- jessaustin 4y ago
  FTFA: Netflix would go on to offer to buy Blockbuster Online; Antioco turned the company down, assuming he could get a better price once Netflix’s growth turned upside down. Carl Icahn, though, who owned a major chunk of Blockbuster and had long feuded with Antioco, finally convinced him to resign that very same quarter; Antioco’s replacement took money away from Total Access and funneled it back to the stores, and Netflix escaped (Hastings would later tell Shane Evangelist, the head of Blockbuster Online, that Blockbuster had Netflix in checkmate). Blockbuster went bankrupt two years later. OK, it was probably a mistake to cut back on "Total Access", but that takes on a deckchair character considering the whole firm was bankrupt in two years! That isn't a convincing support for previous management. ISTM the best decision for shareholders would have been to take the Netflix deal?
- f38zf5vdt 4y ago
  "Activist investors" engage in what will be considered a crime in the near future, which is purchasing shares to obtain board ownership -> take in obscene amounts of debt for stock buybacks -> dump shares and let the company fall into bankruptcy. I prefer their original name "corporate raiders".
  - kshacker 4y ago
    How is this allowed? If companies by same activist investors regularly go into bankruptcy, the creditors must be able to point that out and get some restrictions placed in their favor, no?
enumjorge 4y ago
Sort of an aside question, but the article praises Hastings ability to execute: > To say that Hastings excelled at execution is a dramatic understatement; indeed, the speed with which the company rolled out its advertising product in 2022[...] is a testament that Hastings’ imprint on the company’s ability to execute remains. Is there a place where one could read details on what made him so great at execution?
- criddell 4y ago
  I don’t know if it has anything to do with his business acumen, but he was a pretty talented software developer. I originally knew of him from the Purify memory debugger.
- JacobDotVI 4y ago
  He wrote a book called Blitzscaling regarding how to execute: https://www.amazon.com/Blitzscaling-Lightning-Fast-Building-Massively-Companies/dp/1524761419/ref=sr_1_1?crid=SD4HQ4WTA12R&keywords=blitzscaling+reid+hoffman&qid=1674492954&sprefix=blitzscal%2Caps%2C137&sr=8-1 https://www.amazon.com/Blitzscaling-Lightning-Fast-Building-... The book Netflixed (mentioned in the article) is likely also a good source: https://www.amazon.com/Netflixed-Epic-Battle-Americas-Eyeballs-ebook/dp/B007X5ZE4W/ref=sr_1_1?crid=16CFIAH8XIFN9&keywords=netflixed+the+epic+battle+for+america%27s+eyeballs&qid=1674492992&sprefix=netflixed%2Caps%2C155&sr=8-1 https://www.amazon.com/Netflixed-Epic-Battle-Americas-Eyebal...
  - wheelinsupial 4y ago
    I think the book Blitzscaling is by Reid Hoffman, founder of LinkedIn. Reed Hastings wrote No Rules Rules https://www.norulesrules.com/ https://www.norulesrules.com/
- ajmurmann 4y ago
  The No Rules Rules book by him and an actual author is really good.
- jedberg 4y ago
  I can tell you as a former employee what I think it was. Reed was a developer, and in fact made software to make other developers more productive. He still thinks with that mindset internally. The entire culture at Netflix is built around enabling engineers to do what they think is the best thing. This in turn attracts engineers who like that kind of environment. I would gladly work with any of my former Netflix coworkers again in a heartbeat. The way this manifests is the mantra "context not control". From Reed on down, management's job is to tell the people that work for them "this is what we want to accomplish as a company/team/group". It is then up to those people to set the agenda. So I'd say Reed's execution is that he is great at making sure the right people get hired and the culture remains one of high performance, attracting talented engineers who want to work somewhere where making big changes is accepted. I wasn't there for the ads rollout, but I suspect it went something like Reed saying, "The time has come for us to roll out ads, we need the extra revenue". Then everyone down the line said, "this is how our department will contribute to that". Then the engineers said, "this is what needs to change" and just made it happen and no one got in their way. They have excellent developer tools that enable rapid prototyping and deployment, so while the engineers were building the ad tools, the content team was hiring the best ad exec they could find, who was very interested in the challenge of building an ad organization from scratch, and then everyone probably got out of their way. I say this because I was there for streaming, and it went very similarly. Reed (and the other execs) agreed that the technology had now caught up to his vision, and it was time to stream over the internet. So the engineers built it while the content team was created to start licensing content. Then some of the engineers said, "we could do this a lot faster and eventually worldwide if we hitch our wagon to this new AWS thing". And so management got out of the way and said "if that's what you think is best, we will support that". And so they started building on AWS, and hired a bunch of people who expertise in building on AWS (that was how I got in) and the rest is history. We kept hiring great engineers and saying "if we do it this way it will be a better experience for the customers" and for us internal teams, our customers were other engineers, so we made the best internal tools we could to enable developers.
thiago_fm 4y ago
Something I don't understand is why Disney and others need to have their own streaming service. Why Netflix can't sit down with Disney and merge the two streaming services. Disney is amazing at making content, so is Netflix at the moment. They could take a look at the present, their market cap, debt and so on and structure a solution that would: 1. Make Netflix the best streaming service with the best content, also best variety as it would have all of Disney 2. Fix the negative cashflow from Disney and its streaming service AND give them a good amount of control of Netflix, and its profits I doubt Amazon or Apple would be able to compete against Netflix in that sense. Their content is also good, but hard to compare against a Netflix+Disney combo. They would easily eat a lot subscribers from the competition. Also, business-wise, it would make a lot of sense for Disney. They wouldn't need to support their crappy app or do any engineering work at all, because they aren't anywhere as close as Netflix in that sense, and they will need at least a decade to get where Netflix is, maybe never, as they don't seem to be able to know how to run a technology company AT ALL. Also users would be happier and thankful again, as they don't need to pay for so many services. Right now it is a fucking pain in the ass.
- gumby 4y ago
  There are mergers and consolidations to come, that's for sure, but it would make no sense for Disney to do a deal with Netflix. Netflix is a pure play. Disney+ is part of a somewhat integrated business: streaming, theatre, toys, theme parks, cruises each advertise and reinforce each other. Everything they do is a cross sell. And though I don't personally enjoy most of their output, I see it as generally very high quality. During COVID things got out of whack, with streaming being a significant, high-growth source of revenue while in-person revenue streams languished. The right way to think of Disney streaming is (ultimately) a low cost way to scoop up residual revenues. They put a film in theatres and can do hundreds of millions, and even billions in revenue. Then stick it on streaming (marginal cost for subscribers and Disney: essentially $0). Take it off streaming, sell disks. Put back on streaming. Repeat. The thing Disney and Netflix have in common is high quality software and deployment, head and shoulders above anyone else. But that's about it.
- mattbrewsbytes 4y ago
  I think what you're describing could be a white-label Netflix. Essentially a different UI skin, branding and content library but served by Netflix's tech stack, etc. Its probably more likely any consolidation would happen with the smaller players (NBC, CBS) doing this with Netflix rather than Disney.
gumby 4y ago
I had never heard this part about Blockbuster: > Blockbuster ... started with Blockbuster Online, an entity that was completely separate from Blockbuster’s retail business for reasons of both technology and culture...a test version went live on July 15, 2004 — the same day as Netflix’s quarterly earnings call Blockbuster really snatched defeat from the jaws of victory. The corporate incentives had become completely backward. As we commonly see time and again in oldline companoes like GE, Sears, Google, Boeing...
- glenstein 4y ago
  Right, it's a remarkable story. There's a wondery podcast series about it that was pretty interesting.
- mhzsh 4y ago
  And at the beginning, they tried to partner with Enron to do it. For some reason that part didn't pan out...
- aidenn0 4y ago
  The was a long series of articles posted on HN about a decade ago about how Blockbuster fell. TL;DR: Netflix didn't kill Blockbuster, Blockbuster killed itself with a revolving door of those in charge all trying the same simple, obvious and wrong solution to its problems.
- jonfw 4y ago
  How much influence did franchisees have on the corporate decision making? I can definitely see how, as a franchisee, I would rather ride the brick and mortar video rental business into the ground rather than try and transition the business, given that a retail franchise is a dead end either way
- rrrrrrrrrrrryan 4y ago
  One thing that wasn't mentioned was that Netflix has a monstrously large catalogue at the time, and the user ratings and content recommendations made their offering extremely sticky. Switching to Blockbuster's competing service was a bit painful because you'd lose all your movie ratings, often stretching back years to the DVD-by-mail era. While Blockbuster could acquire brand new streaming subscribers by pricing their product similarly to Netflix, it was really tough for them to poach existing Netflix subscribers.
nemo44x 4y ago
> Antioco’s replacement took money away from Total Access and funneled it back to the stores, and Netflix escaped (Hastings would later tell Shane Evangelist, the head of Blockbuster Online, that Blockbuster had Netflix in checkmate). Blockbuster went bankrupt two years later. That's fascinating because I always wondered why Blockbuster got rid of Total Access. It was so much better than Netflix at the time because you could also rent games and not have to wait for anything. It wouldn't have mattered long term obviously but for about 8 more years or so they could have driven Netflix out of business using the capital investment in brick and mortar stores they made over the previous 30+ years. But they totally blew it - wow!
dbcooper 4y ago
Does it involve not only producing dimly lit garbage?
at_a_remove 4y ago
I wonder if the time isn't ripe for a kind of "meta" service. Essentially, one group provides the content, branding, some kind of licensing data structure describing date ranges and countries, and so on. An abstracted look and feel. Another service spits out the app and has the streaming infrastructure. The apps produced would have the benefit of reaching many, many platforms and so deduplicate a lot of the work getting something to work on a Roku, or a Firestick or a Chromecast. This could open up the door to a lot of smaller groups and allow them to focus on obtaining, curating, and producing content, their specialty. Netflix could be that platform. Of course, they would have to be their own clients first, learning how to abstract the Netflix app, going over their databases and adding columns to various tables, marking all of their content as ContentID = 1 or something. Once they got through that exercise, they could reach out to the smaller providers who are struggling.
- svachalek 4y ago
  Years ago we joked that someday there would be a service like that, and they would call it "cable".
  - red-iron-pine 4y ago
    Now we call it cable cutting. There won't be a return to cable; probably a return to piracy
- agentwiggles 4y ago
  This is kinda like what Amazon does with their channels, which is a bit clunky in various ways, but on the whole I don't hate the model. (besides the fact that the increasing fragmentation of content means I have to have a dozen subscriptions). What I really want is some sort of meta "subscription manager" where I could mark what I'm currently watching and what I always want access to, and it could manage cancelling and uncancelling the various subscriptions that I have. Even better if it could just give me access to everything through a unified interface. I would pay for this - I think it could save a lot of money. What I've been doing recently is whenever I sign up for a new thing, I just immediately cancel. That way when I hit the end of the month and I'm not using Peacock or Shudder or whatever other bench team service, I just won't have it any more. If I need it again, rinse and repeat. Currently the only subscriptions I'm maintaining long-term are HBO and Disney. Disney will probably be a long-runner as long as my kids still want to use it for Bluey and the odd movie. HBO has their classic shows like The Sopranos and Deadwood, plus the Adult Swim catalogue, so they land in a good value spot for me too.
jdorfman 4y ago
> Three months later Netflix cut prices and referred to Amazon’s assumed imminent entry to the space; Netflix’s stock slid again. I never understood why Netflix would continue to become one of the largest AWS customers after Amazon entered the space. Will someone please enlighten me?
- xylophile 4y ago
  Switching cloud providers at Netflix's scale is an enormous multi-year technical undertaking, plus they would be exposed to the risk of two cloud providers instead of one while in transition, plus there are a lot of unknowns in switching providers at that scale which have all been ironed out over the years at AWS, and which could negatively impact customer perception of their product. Plus, as one of the showcase examples of cloud computing success that AWS loves to refer to, I'm sure that Netflix has some sweetheart deals that are difficult to compete with. It would take many many years for "dollars diverted from our competitor" to come close to "dollars spent executing the transition", even with the assumption that a successful transition is possible.
- coredog64 4y ago
  Amazon doesn’t really compete with Netflix. Prime Video is there as a marginal benefit to keep customers paying for Prime, which in turn keeps them shopping at Amazon. The Prime catalog frequently changes to the point that a third or even half of my bookmarks are either pay-to-rent or just not available at all.
  - Sebb767 4y ago
    To be fair, by now Netflix is rotating a lot, too. By now I'm surprised if a movie or series I'm recommended actually is on Netflix. It's not on Amazon Prime level yet, but it's not that far off, at least in my experience.
  - layer8 4y ago
    I wouldn’t dismiss pay-to-rent and the additional subscription channels. If you’re not averse to those, Prime is still the best one-stop besides Netflix.
kderbyma 4y ago
Why does everyone think Disney lost because of steaming....they lost because of politics....the steaming was the easiest target to hit...not the cause...lmao
- txsoftwaredev 4y ago
  The "Cuties" release helped to accelerate subscriber loses for Netflix.
deepzn 4y ago
Even if Netflix is profitable, and makes money on streaming. Considering it's market cap of $160B with today's rise of ~6% and compared to others like Disney at $192B, and AT&T at $140B, and Viacom at $14B. It seems Netflix is viewed at some tech premium that existed in the early part of the decade. Considering now almost every competitor has their own streaming service, there isn't any tech advantage. Maybe a data advantage in that they know what works and what doesn't, but a lot of that is also public knowledge kind of. But, this seems overvalued right now. In my opinion, Netflix got 2 things right: 1) Streaming model with hits. (Becoming HBO) 2) Streaming internationally. (Where hits in one region can become global hits like Squid Game) And now they are trying to "Become TV" with all the wide spectrum of content that Cable TV offers. This means continuing spend, while competition will exist. And basically involves revenue growth in the form of advertising, which is the traditional model of TV. They are not going to grow revenue as fast in terms of subscribers because they are almost completely penetrated in the US, and international subscribers will have lower revenues associated with cheaper offerings. In other words, they really don't have a special lever of growth ahead that distinguishes them from the competition. And Amazon and Apple are continuing to spend money, and hire talent in their offerings.
- chipgap98 4y ago
  I think the point is that their competitors are in streaming now but won't be in the long term because it is costing them too much money. When that happens they will go back to licensing their content to Netflix.
jdprgm 4y ago
A few thoughts: 1) On the talk of saturation Netflix had somewhere around 230 mil subscribers last year. In theory the addressable market should be adults ~20 and up so somewhere around 5 bil. So not even close to saturation. Discounting say half of that imagine how much better the service could be with 10x the current subscriber base. They talk about increasing subscription price... At 10x you could half the subscription price and still increase content spending 5x which would be pretty incredible. 2) The article talks about old content not holding value as expected. I think a lot of this has to do with the near complete failure to invest in rewatchable content. They were clearly aware the value of shows like The Office and Friends in terms of rewatchability. Off the top of my head I can't even think of an attempt at original content in that lane from Netflix (Licensing and extra seasons of Arrested Development is the only thing that comes to mind). To be fair though utterly bizarrely nearly every service has failed at this kind of content for the past 5 years or so. 3) The lack of global hits is very strange. I was trying to lookup high budget tv productions in foreign countries and not sure if it is just a lack of data or they don't exist. I would think even if there is a cultural bias around kinds of shows people watch just in terms of production quality western shows would still be globally dominant. Are there any examples of international shows with 20 mil per episode budgets? This one is definitely strange to me looking back on what I would have estimated for the world of streaming a decade ago. I would have expected a much more expected shared culture in terms of what is watched worldwide. Instead it seems if anything we have become increasingly isolated. It's crazy to think Netflix isn't even active in a country the size of China for example. I would have thought by now technology would lead to shows with viewerships counted in the billions not millions. Squid Game is apparently Netflix's most popular show ever but even that from brief research has under 200 mil views which in the context of total population still makes it incredibly unpopular. I.e. if you take 100 random humans and put them in a room almost none of them have seen it. I wonder if we will ever reach a point where anything is actually globally popular.
- thewebcount 4y ago
  > 3) The lack of global hits is very strange. Yeah, this part of the article really struck me: > what’s really interesting is there aren’t that many global hits, meaning that everyone in the world watches the same thing. Squid Game was very rare in that way. And Wednesday looks like one of those too, very rare in that way. I have to wonder what the problem is. I've watched more foreign-language shows in the last 3 years than in the rest of my 51 years combined thanks to shows on Netflix, HBO Max, Apple TV+, etc. I'd love to see more of them, but they aren't surfacing in my searches and recommendations very frequently. I'd really like more variety in show selections. They don't even have to be big hits like Squid Games or Lupin. I'd be interested in any show that's good regardless of whether it's been a blockbuster hit. On something like Hulu, there are tons of shows that mostly fall into Police/Medical procedural, Office-like sitcom, or Friends-like sitcom. Those are fine, and some are even pretty decent, but I'm really tired of those formats. Seeing shows about other cultures has been fascinating. And just having other types of stories is nice, too.
lifeisstillgood 4y ago
Curious now - what percentage of global content is netflix seeing in Japan or Mexico, vs local content? I think that would be an interesting metric for all sorts of other influences, political, social etc. Essentially defining the landscape of balkanisation of the internet ...
pnathan 4y ago
My take is that acted video on demand is ripe for collapsing into a few services. The next big streaming target is sports. That will, in my opinion, be the determinant of the streaming success in the next decade.
ChrisMarshallNY 4y ago
> I’m not sure there is any company of Netflix’s size that has ever been so frequently doubted and written off. <cough/> Apple <cough/>
indigodaddy 4y ago
Really good article. One extremely minor grammatical quibble— the first “not” in this sentence in the final paragraph of the article, renders the sentence confusing. It should be removed. “It’s impossible to not dive into the history of Netflix and not come away with a deep appreciation for everything Hastings accomplished.”
hintymad 4y ago
Is it just me or Disney+ does not have as engaging and comprehensive content as Netflix? I feel it's so easy to run out of the existing catalog on Disney+, and boy the newly added are single-dimension: superhero this and Star Wars that, plus a few great animations. I understand that there are other content. It's just that they seemed so so that I don't even remember which ones I watched. On the other hand, on Netflix one can find shows of different genres, many of which are binge-worthy. One can also find rotating old catalogs, many of which are worth rewatching.
- fryz 4y ago
  You might not be the right market (or at least, the marketplace might be different for your demographic). I'm a parent, and for me, and all my parent friends, Disney+ is the streaming service that generates the most value in our households. Along with all the old/nostalgic Disney animated films, they generate and acquire a lot of the "in" content for kids (Bluey, Mickey Mouse Kids House, etc.) Before my kids, Disney+ would have been the first streaming service to make the cut. But now, it'll be the last.
  - hintymad 4y ago
    > Along with all the old/nostalgic Disney animated films, they generate and acquire a lot of the "in" content for kids (Bluey, Mickey Mouse Kids House, etc.) True for my family too! It's just that my kids already cycle through most, if not all, of the content they want to watch.
    - fryz 4y ago
      Maybe we've not gotten there yet (kids are 2 and 1), but they can watch the same thing thousands of times and it will still glue them to the TV.
minhduong243 4y ago
This article said none of Netflix's competitors had positive cash flow. Well, at least Disney did. Disney+ is unlikely to have positive cash flow, but the Walt Disney company has a cash cow in parks and other media assets. This Stratechery article seems to conveniently ignore that unlike Netflix, other streaming services have revenue-generating assets to fund the streaming war. It cost Disney $400 million to make the Avatar sequel and probably that amount for marketing. Yet it already has made $2 billion in box office. Netflix spent $200 million on the Gray Man. How much did the movie bring to Netflix? Disney and Warner Bros have incredible franchises. What does Netflix have in comparison? I also don't see any mention on the fact that while competitors are increasing content spend, Netflix is doing the opposite. If it's the new content, rather than the old stuff, that attracts subscribers, should the fact that Netflix is decreasing content spend be a concern? If Netflix's future is about creativity and content quality, why should we believe that Netflix will be better at creating quality content in the future than they have so far? What data shows that subscribers come back because Netflix content is the best? Or is it because they have the biggest catalogue? And what does it say about decreasing content spend when Netflix is stretched across markets? I don't dispute Reed's achievements, but citing the launch of the ads tier is a bit premature and strange. Reed, for years, pushed back against the idea of an ads-supported plan. He only changed his mind only when he had to. Yes, Netflix launched the ads operations in a few months' time, but we haven't got any concrete data on it.

287 points by jkestner 4y ago

[dead]

Cool story about Netflix growth and growing pains. I have 0 knowledge about the subject so can not judge the correctness.

jedberg 4y ago

Netflix only lost to Blockbuster because Blockbuster didn't believe in online anything strongly enough to properly fund it. Blockbuster had the better network and better penetration, and even had equally good technology. But corporate didn't want to fund them to hire the next set of engineers they needed. Blockbuster would have won if their board had been just slightly more forward looking. And Netflix knew it.

cjbgkagh 4y ago
I wonder if it would have been possible to ‘bribe’ blockbuster executives into making such decisions. As much as Blockbuster was prepared to pay them to do their jobs I’m sure Netflix would have offered them more to not do their jobs. An indirect/legal way to do this would simply be to poach talent away with good offers, easy to do when you’re poised for substantial growth.
Waterluvian 4y ago
Isn't this the Sears case again? They were the veteran incumbent with a mountain of experience in the industry, but turning a corporate ship on a dime seems to be impossible. I guess that manifests as a form of "corporate didn't believe in..." or "didn't invest in the engineering" as you say.
- macintux 4y ago
  Aka https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
- jedberg 4y ago
  It was worse than that though. They had already built a second ship pointed in the right direction, it just needed a little bit of extra fuel. They had already innovated.
- BobbyJo 4y ago
  You can keep the shareholder calls easy for now by just keeping costs low and praying. If you suddenly add a new high cost department that isn't going to be pulling in revenue for 12+ months, those calls are going to get harder, and you need to have the clout with your investors to convince them it's the right more. If you're a hired CEO who's done nothing but tweak logistics and optimize inventory, then they aren't going to trust that you are making the correct move when it comes to completely changing customer acquisition and product delivery.
- hinkley 4y ago
  If you didn't have the Sears Catalog you had the JC Penney catalog. They both dropped the ball, probably by watching each other to see who blinked first.
- WorldMaker 4y ago
  Sears was already in the wrong place at that time because not just was it incapable of turning on a dime, it already had corporate raiders inside it turning over every couch for leftover dimes. It was already getting chopped up and shopped for parts by the time the internet arrived.
- joncrane 4y ago
  Kodak is another great example.
me_me_me 4y ago
Google has massive range and tons of way to push their services onto users, and google+ failed miserably. Resources are not guarantee of success.
- Sohcahtoa82 4y ago
  I'm convinced that what killed Google+ was their slow rollout, which was an absolutely bone-headed move that I'm really surprised a company like Google would make. Google+ was a social network. For a social network to have any value, you need your friends to be on it as well. By making it invite-only and throttling how many people could join, they guaranteed that most of your friends weren't there and COULDN'T be there. There were so many memes being made of Google+ being described as this amazing party you got invited to, only to get there and find there's nobody there. GMail being invite-only at first wasn't a problem because using GMail didn't require everybody you sent/received e-mails to/from to be on GMail as well.
  - function_seven 4y ago
    Yes. It seems like they learned the wrong lesson from both Gmail as well as Facebook. With Gmail, the invite-only rollout had the effect of making the service seem exclusive and valuable. I remember getting my invite from a friend and being “let into the club”. (I didn’t take it that seriously, but the feeling of being “in” was still kinda there). And as you note, email still works across providers, so no network effects were harmed. Facebook also had early exclusivity, but it was entire cohort schools at once! If I was allowed to create a FB account, that meant all my classmates were also being admitted to the club. G+ didn’t start with any natural cohorts, so being rolled out slowly just guaranteed that initial experiences were tumbleweeds and disappointment.
  - ben7799 4y ago
    Excellent point. It's easy to remember google stuff used to be limited and "cool" and it was desirable to get an invite. G+ was around the time that started to swing around and people didn't think Google was so amazing or desirable.
  - 4y ago

no_wizard 4y ago

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - Therefore, Netflix needs to do what it can to retain / attract subscribers, but essentially can wait until the other services have to give up due to cost In a nutshell, Netflix is poised to play more long game, due to cost structures of their competitors. so fair, sounds good, but it assumes the boards / leadership of these companies won't also play a long game, seeing some sort of profitability horizon is they cannibalize their existing businesses for sticky services (like streaming). I could see Disney doing this, to some extent, with their cable TV channels and movies. I'm less bullish on Comcast/NBC, CBS/Viacom or really any other media company being able to do this, simply because they don't have the "staying power" Disney does. This also fails to account for the strength of HBO Max (very strong sub numbers)

b112 4y ago
HBO / Netflix merger FTW?
- exhilaration 4y ago
  HBO is owned by Warner Bros. Discovery, likely one of their most valuable assets. I can't see them giving it up.
  - de_keyboard 4y ago
    Indeed. Feels like vast majority of the TV worth watching is HBO. I value my time so I'd rather have access to a few HBO series / year than an endless sea of A/B dross.
- no_wizard 4y ago
  That would now mean buying out WarnerMedia Discovery Group which just merged, and WarnerMedia was the owner of HBO before that. AT&T was forced to divest at least. Never the less, that would be a massive acquisition, they carry alot of debt.

rvz 4y ago

I can only see Microsoft acquiring Netflix on the horizon at this point.

JumpCrisscross 4y ago
> can only see Microsoft acquiring Netflix This makes no sense. Microsoft licensing e.g. the Halo franchise to Netflix for serialization is a solid pitch.
- snickerbockers 4y ago
  they already did that with paramount+
Cymrukicks 4y ago
That would actually be a monster acquisition. A huge blow for AWS aswell as they would no doubt switch to Azure.

xrd 4y ago

The first time I've seen a well written critique of activist investors like Carl Icahn. He certainly scuttled any chance that Blockbuster had of succeeding. He's often right about small details when it comes to traditional companies and where to cut costs (as are many activist investors), but this story reads like he sabotaged Blockbuster when it had an actual substantial and viable chance to compete. I had not heard this story before, I always assumed Blockbuster was just too dumb to compete, but it wasn't the case at all. And, interesting if people like Hastings knew the forces at play in his competitors, and as Strategery points out, can play the long game when they know their competitors can't. Terrific article, as usual.

jessaustin 4y ago
FTFA: Netflix would go on to offer to buy Blockbuster Online; Antioco turned the company down, assuming he could get a better price once Netflix’s growth turned upside down. Carl Icahn, though, who owned a major chunk of Blockbuster and had long feuded with Antioco, finally convinced him to resign that very same quarter; Antioco’s replacement took money away from Total Access and funneled it back to the stores, and Netflix escaped (Hastings would later tell Shane Evangelist, the head of Blockbuster Online, that Blockbuster had Netflix in checkmate). Blockbuster went bankrupt two years later. OK, it was probably a mistake to cut back on "Total Access", but that takes on a deckchair character considering the whole firm was bankrupt in two years! That isn't a convincing support for previous management. ISTM the best decision for shareholders would have been to take the Netflix deal?
f38zf5vdt 4y ago
"Activist investors" engage in what will be considered a crime in the near future, which is purchasing shares to obtain board ownership -> take in obscene amounts of debt for stock buybacks -> dump shares and let the company fall into bankruptcy. I prefer their original name "corporate raiders".
- kshacker 4y ago
  How is this allowed? If companies by same activist investors regularly go into bankruptcy, the creditors must be able to point that out and get some restrictions placed in their favor, no?

enumjorge 4y ago

Sort of an aside question, but the article praises Hastings ability to execute: > To say that Hastings excelled at execution is a dramatic understatement; indeed, the speed with which the company rolled out its advertising product in 2022[...] is a testament that Hastings’ imprint on the company’s ability to execute remains. Is there a place where one could read details on what made him so great at execution?

criddell 4y ago
I don’t know if it has anything to do with his business acumen, but he was a pretty talented software developer. I originally knew of him from the Purify memory debugger.
JacobDotVI 4y ago
He wrote a book called Blitzscaling regarding how to execute: https://www.amazon.com/Blitzscaling-Lightning-Fast-Building-Massively-Companies/dp/1524761419/ref=sr_1_1?crid=SD4HQ4WTA12R&keywords=blitzscaling+reid+hoffman&qid=1674492954&sprefix=blitzscal%2Caps%2C137&sr=8-1 https://www.amazon.com/Blitzscaling-Lightning-Fast-Building-... The book Netflixed (mentioned in the article) is likely also a good source: https://www.amazon.com/Netflixed-Epic-Battle-Americas-Eyeballs-ebook/dp/B007X5ZE4W/ref=sr_1_1?crid=16CFIAH8XIFN9&keywords=netflixed+the+epic+battle+for+america%27s+eyeballs&qid=1674492992&sprefix=netflixed%2Caps%2C155&sr=8-1 https://www.amazon.com/Netflixed-Epic-Battle-Americas-Eyebal...
- wheelinsupial 4y ago
  I think the book Blitzscaling is by Reid Hoffman, founder of LinkedIn. Reed Hastings wrote No Rules Rules https://www.norulesrules.com/ https://www.norulesrules.com/
ajmurmann 4y ago
The No Rules Rules book by him and an actual author is really good.
jedberg 4y ago
I can tell you as a former employee what I think it was. Reed was a developer, and in fact made software to make other developers more productive. He still thinks with that mindset internally. The entire culture at Netflix is built around enabling engineers to do what they think is the best thing. This in turn attracts engineers who like that kind of environment. I would gladly work with any of my former Netflix coworkers again in a heartbeat. The way this manifests is the mantra "context not control". From Reed on down, management's job is to tell the people that work for them "this is what we want to accomplish as a company/team/group". It is then up to those people to set the agenda. So I'd say Reed's execution is that he is great at making sure the right people get hired and the culture remains one of high performance, attracting talented engineers who want to work somewhere where making big changes is accepted. I wasn't there for the ads rollout, but I suspect it went something like Reed saying, "The time has come for us to roll out ads, we need the extra revenue". Then everyone down the line said, "this is how our department will contribute to that". Then the engineers said, "this is what needs to change" and just made it happen and no one got in their way. They have excellent developer tools that enable rapid prototyping and deployment, so while the engineers were building the ad tools, the content team was hiring the best ad exec they could find, who was very interested in the challenge of building an ad organization from scratch, and then everyone probably got out of their way. I say this because I was there for streaming, and it went very similarly. Reed (and the other execs) agreed that the technology had now caught up to his vision, and it was time to stream over the internet. So the engineers built it while the content team was created to start licensing content. Then some of the engineers said, "we could do this a lot faster and eventually worldwide if we hitch our wagon to this new AWS thing". And so management got out of the way and said "if that's what you think is best, we will support that". And so they started building on AWS, and hired a bunch of people who expertise in building on AWS (that was how I got in) and the rest is history. We kept hiring great engineers and saying "if we do it this way it will be a better experience for the customers" and for us internal teams, our customers were other engineers, so we made the best internal tools we could to enable developers.

thiago_fm 4y ago

Something I don't understand is why Disney and others need to have their own streaming service. Why Netflix can't sit down with Disney and merge the two streaming services. Disney is amazing at making content, so is Netflix at the moment. They could take a look at the present, their market cap, debt and so on and structure a solution that would: 1. Make Netflix the best streaming service with the best content, also best variety as it would have all of Disney 2. Fix the negative cashflow from Disney and its streaming service AND give them a good amount of control of Netflix, and its profits I doubt Amazon or Apple would be able to compete against Netflix in that sense. Their content is also good, but hard to compare against a Netflix+Disney combo. They would easily eat a lot subscribers from the competition. Also, business-wise, it would make a lot of sense for Disney. They wouldn't need to support their crappy app or do any engineering work at all, because they aren't anywhere as close as Netflix in that sense, and they will need at least a decade to get where Netflix is, maybe never, as they don't seem to be able to know how to run a technology company AT ALL. Also users would be happier and thankful again, as they don't need to pay for so many services. Right now it is a fucking pain in the ass.

gumby 4y ago
There are mergers and consolidations to come, that's for sure, but it would make no sense for Disney to do a deal with Netflix. Netflix is a pure play. Disney+ is part of a somewhat integrated business: streaming, theatre, toys, theme parks, cruises each advertise and reinforce each other. Everything they do is a cross sell. And though I don't personally enjoy most of their output, I see it as generally very high quality. During COVID things got out of whack, with streaming being a significant, high-growth source of revenue while in-person revenue streams languished. The right way to think of Disney streaming is (ultimately) a low cost way to scoop up residual revenues. They put a film in theatres and can do hundreds of millions, and even billions in revenue. Then stick it on streaming (marginal cost for subscribers and Disney: essentially $0). Take it off streaming, sell disks. Put back on streaming. Repeat. The thing Disney and Netflix have in common is high quality software and deployment, head and shoulders above anyone else. But that's about it.
mattbrewsbytes 4y ago
I think what you're describing could be a white-label Netflix. Essentially a different UI skin, branding and content library but served by Netflix's tech stack, etc. Its probably more likely any consolidation would happen with the smaller players (NBC, CBS) doing this with Netflix rather than Disney.

gumby 4y ago

I had never heard this part about Blockbuster: > Blockbuster ... started with Blockbuster Online, an entity that was completely separate from Blockbuster’s retail business for reasons of both technology and culture...a test version went live on July 15, 2004 — the same day as Netflix’s quarterly earnings call Blockbuster really snatched defeat from the jaws of victory. The corporate incentives had become completely backward. As we commonly see time and again in oldline companoes like GE, Sears, Google, Boeing...

glenstein 4y ago
Right, it's a remarkable story. There's a wondery podcast series about it that was pretty interesting.
mhzsh 4y ago
And at the beginning, they tried to partner with Enron to do it. For some reason that part didn't pan out...
aidenn0 4y ago
The was a long series of articles posted on HN about a decade ago about how Blockbuster fell. TL;DR: Netflix didn't kill Blockbuster, Blockbuster killed itself with a revolving door of those in charge all trying the same simple, obvious and wrong solution to its problems.
jonfw 4y ago
How much influence did franchisees have on the corporate decision making? I can definitely see how, as a franchisee, I would rather ride the brick and mortar video rental business into the ground rather than try and transition the business, given that a retail franchise is a dead end either way
rrrrrrrrrrrryan 4y ago
One thing that wasn't mentioned was that Netflix has a monstrously large catalogue at the time, and the user ratings and content recommendations made their offering extremely sticky. Switching to Blockbuster's competing service was a bit painful because you'd lose all your movie ratings, often stretching back years to the DVD-by-mail era. While Blockbuster could acquire brand new streaming subscribers by pricing their product similarly to Netflix, it was really tough for them to poach existing Netflix subscribers.

nemo44x 4y ago

> Antioco’s replacement took money away from Total Access and funneled it back to the stores, and Netflix escaped (Hastings would later tell Shane Evangelist, the head of Blockbuster Online, that Blockbuster had Netflix in checkmate). Blockbuster went bankrupt two years later. That's fascinating because I always wondered why Blockbuster got rid of Total Access. It was so much better than Netflix at the time because you could also rent games and not have to wait for anything. It wouldn't have mattered long term obviously but for about 8 more years or so they could have driven Netflix out of business using the capital investment in brick and mortar stores they made over the previous 30+ years. But they totally blew it - wow!

dbcooper 4y ago

Does it involve not only producing dimly lit garbage?

at_a_remove 4y ago

I wonder if the time isn't ripe for a kind of "meta" service. Essentially, one group provides the content, branding, some kind of licensing data structure describing date ranges and countries, and so on. An abstracted look and feel. Another service spits out the app and has the streaming infrastructure. The apps produced would have the benefit of reaching many, many platforms and so deduplicate a lot of the work getting something to work on a Roku, or a Firestick or a Chromecast. This could open up the door to a lot of smaller groups and allow them to focus on obtaining, curating, and producing content, their specialty. Netflix could be that platform. Of course, they would have to be their own clients first, learning how to abstract the Netflix app, going over their databases and adding columns to various tables, marking all of their content as ContentID = 1 or something. Once they got through that exercise, they could reach out to the smaller providers who are struggling.

svachalek 4y ago
Years ago we joked that someday there would be a service like that, and they would call it "cable".
- red-iron-pine 4y ago
  Now we call it cable cutting. There won't be a return to cable; probably a return to piracy
agentwiggles 4y ago
This is kinda like what Amazon does with their channels, which is a bit clunky in various ways, but on the whole I don't hate the model. (besides the fact that the increasing fragmentation of content means I have to have a dozen subscriptions). What I really want is some sort of meta "subscription manager" where I could mark what I'm currently watching and what I always want access to, and it could manage cancelling and uncancelling the various subscriptions that I have. Even better if it could just give me access to everything through a unified interface. I would pay for this - I think it could save a lot of money. What I've been doing recently is whenever I sign up for a new thing, I just immediately cancel. That way when I hit the end of the month and I'm not using Peacock or Shudder or whatever other bench team service, I just won't have it any more. If I need it again, rinse and repeat. Currently the only subscriptions I'm maintaining long-term are HBO and Disney. Disney will probably be a long-runner as long as my kids still want to use it for Bluey and the odd movie. HBO has their classic shows like The Sopranos and Deadwood, plus the Adult Swim catalogue, so they land in a good value spot for me too.

jdorfman 4y ago

> Three months later Netflix cut prices and referred to Amazon’s assumed imminent entry to the space; Netflix’s stock slid again. I never understood why Netflix would continue to become one of the largest AWS customers after Amazon entered the space. Will someone please enlighten me?

xylophile 4y ago
Switching cloud providers at Netflix's scale is an enormous multi-year technical undertaking, plus they would be exposed to the risk of two cloud providers instead of one while in transition, plus there are a lot of unknowns in switching providers at that scale which have all been ironed out over the years at AWS, and which could negatively impact customer perception of their product. Plus, as one of the showcase examples of cloud computing success that AWS loves to refer to, I'm sure that Netflix has some sweetheart deals that are difficult to compete with. It would take many many years for "dollars diverted from our competitor" to come close to "dollars spent executing the transition", even with the assumption that a successful transition is possible.
coredog64 4y ago
Amazon doesn’t really compete with Netflix. Prime Video is there as a marginal benefit to keep customers paying for Prime, which in turn keeps them shopping at Amazon. The Prime catalog frequently changes to the point that a third or even half of my bookmarks are either pay-to-rent or just not available at all.
- Sebb767 4y ago
  To be fair, by now Netflix is rotating a lot, too. By now I'm surprised if a movie or series I'm recommended actually is on Netflix. It's not on Amazon Prime level yet, but it's not that far off, at least in my experience.
- layer8 4y ago
  I wouldn’t dismiss pay-to-rent and the additional subscription channels. If you’re not averse to those, Prime is still the best one-stop besides Netflix.

kderbyma 4y ago

Why does everyone think Disney lost because of steaming....they lost because of politics....the steaming was the easiest target to hit...not the cause...lmao

txsoftwaredev 4y ago
The "Cuties" release helped to accelerate subscriber loses for Netflix.

deepzn 4y ago

Even if Netflix is profitable, and makes money on streaming. Considering it's market cap of $160B with today's rise of ~6% and compared to others like Disney at $192B, and AT&T at $140B, and Viacom at $14B. It seems Netflix is viewed at some tech premium that existed in the early part of the decade. Considering now almost every competitor has their own streaming service, there isn't any tech advantage. Maybe a data advantage in that they know what works and what doesn't, but a lot of that is also public knowledge kind of. But, this seems overvalued right now. In my opinion, Netflix got 2 things right: 1) Streaming model with hits. (Becoming HBO) 2) Streaming internationally. (Where hits in one region can become global hits like Squid Game) And now they are trying to "Become TV" with all the wide spectrum of content that Cable TV offers. This means continuing spend, while competition will exist. And basically involves revenue growth in the form of advertising, which is the traditional model of TV. They are not going to grow revenue as fast in terms of subscribers because they are almost completely penetrated in the US, and international subscribers will have lower revenues associated with cheaper offerings. In other words, they really don't have a special lever of growth ahead that distinguishes them from the competition. And Amazon and Apple are continuing to spend money, and hire talent in their offerings.

chipgap98 4y ago
I think the point is that their competitors are in streaming now but won't be in the long term because it is costing them too much money. When that happens they will go back to licensing their content to Netflix.

jdprgm 4y ago

A few thoughts: 1) On the talk of saturation Netflix had somewhere around 230 mil subscribers last year. In theory the addressable market should be adults ~20 and up so somewhere around 5 bil. So not even close to saturation. Discounting say half of that imagine how much better the service could be with 10x the current subscriber base. They talk about increasing subscription price... At 10x you could half the subscription price and still increase content spending 5x which would be pretty incredible. 2) The article talks about old content not holding value as expected. I think a lot of this has to do with the near complete failure to invest in rewatchable content. They were clearly aware the value of shows like The Office and Friends in terms of rewatchability. Off the top of my head I can't even think of an attempt at original content in that lane from Netflix (Licensing and extra seasons of Arrested Development is the only thing that comes to mind). To be fair though utterly bizarrely nearly every service has failed at this kind of content for the past 5 years or so. 3) The lack of global hits is very strange. I was trying to lookup high budget tv productions in foreign countries and not sure if it is just a lack of data or they don't exist. I would think even if there is a cultural bias around kinds of shows people watch just in terms of production quality western shows would still be globally dominant. Are there any examples of international shows with 20 mil per episode budgets? This one is definitely strange to me looking back on what I would have estimated for the world of streaming a decade ago. I would have expected a much more expected shared culture in terms of what is watched worldwide. Instead it seems if anything we have become increasingly isolated. It's crazy to think Netflix isn't even active in a country the size of China for example. I would have thought by now technology would lead to shows with viewerships counted in the billions not millions. Squid Game is apparently Netflix's most popular show ever but even that from brief research has under 200 mil views which in the context of total population still makes it incredibly unpopular. I.e. if you take 100 random humans and put them in a room almost none of them have seen it. I wonder if we will ever reach a point where anything is actually globally popular.

thewebcount 4y ago
> 3) The lack of global hits is very strange. Yeah, this part of the article really struck me: > what’s really interesting is there aren’t that many global hits, meaning that everyone in the world watches the same thing. Squid Game was very rare in that way. And Wednesday looks like one of those too, very rare in that way. I have to wonder what the problem is. I've watched more foreign-language shows in the last 3 years than in the rest of my 51 years combined thanks to shows on Netflix, HBO Max, Apple TV+, etc. I'd love to see more of them, but they aren't surfacing in my searches and recommendations very frequently. I'd really like more variety in show selections. They don't even have to be big hits like Squid Games or Lupin. I'd be interested in any show that's good regardless of whether it's been a blockbuster hit. On something like Hulu, there are tons of shows that mostly fall into Police/Medical procedural, Office-like sitcom, or Friends-like sitcom. Those are fine, and some are even pretty decent, but I'm really tired of those formats. Seeing shows about other cultures has been fascinating. And just having other types of stories is nice, too.

lifeisstillgood 4y ago

Curious now - what percentage of global content is netflix seeing in Japan or Mexico, vs local content? I think that would be an interesting metric for all sorts of other influences, political, social etc. Essentially defining the landscape of balkanisation of the internet ...

pnathan 4y ago

My take is that acted video on demand is ripe for collapsing into a few services. The next big streaming target is sports. That will, in my opinion, be the determinant of the streaming success in the next decade.

ChrisMarshallNY 4y ago

> I’m not sure there is any company of Netflix’s size that has ever been so frequently doubted and written off. <cough/> Apple <cough/>

indigodaddy 4y ago

Really good article. One extremely minor grammatical quibble— the first “not” in this sentence in the final paragraph of the article, renders the sentence confusing. It should be removed. “It’s impossible to not dive into the history of Netflix and not come away with a deep appreciation for everything Hastings accomplished.”

hintymad 4y ago

Is it just me or Disney+ does not have as engaging and comprehensive content as Netflix? I feel it's so easy to run out of the existing catalog on Disney+, and boy the newly added are single-dimension: superhero this and Star Wars that, plus a few great animations. I understand that there are other content. It's just that they seemed so so that I don't even remember which ones I watched. On the other hand, on Netflix one can find shows of different genres, many of which are binge-worthy. One can also find rotating old catalogs, many of which are worth rewatching.

fryz 4y ago
You might not be the right market (or at least, the marketplace might be different for your demographic). I'm a parent, and for me, and all my parent friends, Disney+ is the streaming service that generates the most value in our households. Along with all the old/nostalgic Disney animated films, they generate and acquire a lot of the "in" content for kids (Bluey, Mickey Mouse Kids House, etc.) Before my kids, Disney+ would have been the first streaming service to make the cut. But now, it'll be the last.
- hintymad 4y ago
  > Along with all the old/nostalgic Disney animated films, they generate and acquire a lot of the "in" content for kids (Bluey, Mickey Mouse Kids House, etc.) True for my family too! It's just that my kids already cycle through most, if not all, of the content they want to watch.
  - fryz 4y ago
    Maybe we've not gotten there yet (kids are 2 and 1), but they can watch the same thing thousands of times and it will still glue them to the TV.

minhduong243 4y ago

This article said none of Netflix's competitors had positive cash flow. Well, at least Disney did. Disney+ is unlikely to have positive cash flow, but the Walt Disney company has a cash cow in parks and other media assets. This Stratechery article seems to conveniently ignore that unlike Netflix, other streaming services have revenue-generating assets to fund the streaming war. It cost Disney $400 million to make the Avatar sequel and probably that amount for marketing. Yet it already has made $2 billion in box office. Netflix spent $200 million on the Gray Man. How much did the movie bring to Netflix? Disney and Warner Bros have incredible franchises. What does Netflix have in comparison? I also don't see any mention on the fact that while competitors are increasing content spend, Netflix is doing the opposite. If it's the new content, rather than the old stuff, that attracts subscribers, should the fact that Netflix is decreasing content spend be a concern? If Netflix's future is about creativity and content quality, why should we believe that Netflix will be better at creating quality content in the future than they have so far? What data shows that subscribers come back because Netflix content is the best? Or is it because they have the biggest catalogue? And what does it say about decreasing content spend when Netflix is stretched across markets? I don't dispute Reed's achievements, but citing the launch of the ads tier is a bit premature and strange. Reed, for years, pushed back against the idea of an ads-supported plan. He only changed his mind only when he had to. Yes, Netflix launched the ads operations in a few months' time, but we haven't got any concrete data on it.