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To simplify: 1. Innovate. 2. Exploit. You start by innovating a "fast horse". This gains you early adopters who pull in a larger audience. A horse can only

by beloch 2y ago

To simplify: 1. Innovate. 2. Exploit. You start by innovating a "fast horse". This gains you early adopters who pull in a larger audience. A horse can only be so fast, so continued innovation might lead to something more like a car. This will only cause you to bleed users. Stick to the horse. Instead of continuing to innovate endlessly, you switch to exploitation. Fire the visionaries. They're just a waste of payroll. Bring in people who can squeeze every last dime out of your user base. ----------------------- The above isn't anything new. However, it's clear that some companies are better at maintaining quality while exploiting. Are they doing something different, or is it just that their customers have to choose them repeatedly? e.g. Most people don't sign up with one car company for life. They'll buy several cars over their life and that's a choice that the car company must win each time. Meanwhile, people sign up for Netflix or Spotify and stay subbed. They don't look at the alternatives every few years. Porsche needs to keep up with the latest and fastest horses to continue exploiting their reputation, while Netflix can focus purely on making more money from their users. A faster horse may come along, but Netflix doesn't break down and need to be replaced.

nthingtohide 2y ago
Are you ignoring the benefits of network effects? Network effects should ideally improve recommendations for all subgenres of people.
_kush 2y ago
Porsche is easy to replace only if you bought it as just another fast car. If you bought it for the design, the legacy, or what the brand means to you, it’s not so easy. Netflix has their content as their moat. Even if someone today builds a better version of what Netflix used to be, it wouldn't matter. They won’t have the rights and licenses to the shows and movies. That’s what keeps people from switching. Porsche has to keep earning you as a customer with every new model. Netflix just needs to keep you watching.
- echelon 2y ago
  > Even if someone today builds a better version of what Netflix used to be, it wouldn't matter. They won’t have the rights and licenses to the shows and movies. That’s what keeps people from switching. What, apart from Stranger Things and Squid Game, has been enough of a cultural touchstone that it keeps people on Netflix? Those aren't things you keep coming back to again and again. Netflix doesn't own Friends, Seinfeld, The Office, Community, Parks and Rec, etc. I'd argue Max (nee HBO) has better legacy titles and franchises. They have both enduring IP as well as the reputation of being "destination television". The thing that keeps people from cancelling Netflix is that they have a better content slate of licensed classics paired with new originals. And they do it in the greatest volume of all the streamers, so there will be "something" on, even if it isn't particularly good.
  - cestith 2y ago
    Nobody Wants This; Bridgerton; Wednesday; Man on the Inside; 3 Body Problem; Emily in Paris; the live-action Avatar: The Last Airbender; Love, Death, and Robots; How to Sell Drugs Online (Fast); Is It Cake?; Everybody’s Live with John Mulaney; and some others I’ve definitely had conversations about outside my own household. Arcane was a pretty big deal and it was released on Netflix and TenCent. They also have continued series that originated on other networks, including Unsolved Mysteries and Black Mirror. I know several people who watched Cyberpunk: Edgerunners on Netflix and are excited about the upcoming CDPR and Netflix project set in the Cyberpunk universe. I’ve had recommended to me and have recommended to others quite a few of their original movies. You might like 6 Undergound if you’re looking for an action movie.
    - BigGreenJorts 2y ago
      Love How to sell drug online (fast), surprised to see it listed here tho 'cause I've never heard anyone talk about it. Considering it got 4 seasons, it must be popular tho. And yeah, Bridgerton, Wednesday, Emily in Paris, and 3 Body Problem each certainly take their moment at least in my circles.
    - HWR_14 2y ago
      Also, Netflix kicked off the streaming premium shows with House of Cards and Orange is the New Black.
- Arainach 2y ago
  >Netflix has their content as their moat. Only Netflix-produced shows apply here. Before Netflix started producing content they had *no moat*. That's the big problem with media streaming - the content owners have all the leverage. Any profit you make they can see and simply increase licensing costs to transfer to them. If you don't want to pay they can (and will, and have done) start their own competitor since the technology isn't a moat - content ownership is.
  - TimPC 2y ago
    Large aggregation is also to a certain degree a moat. Most creators have quickly found that people won't pay for one creator's content unless that creator is a huge volume creator (at the scale of maybe Disney). No one subscribes to a platform with 20 movies and 5 TV shows.
    - travisjungroth 2y ago
      Dropout.tv is a counterexample. They're not 20 movies and 5 TV shows, but they're closer to that than they are Disney. There are also all the people who make a living on Patreon.
  - immibis 2y ago
    Which is also how rent works for physical locations, by the way.
  - chii 2y ago
    Which is why back in the 1930's, there's anti-trust legislations preventing movie studios from owning cinemas. This prevents the ownership of IP from dictating prices in the cinema. The situation with streaming platforms are exactly equivalent, and these content production studios have learnt to prevent this sort of anti-trust legislations from forming. in fact, the cinema ownership decree has been ended i think: https://www.laineygossip.com/with-sonys-purchase-of-alamo-drafthouse-could-studios-buying-movie-theaters-become-hot-new-trend/78384 https://www.laineygossip.com/with-sonys-purchase-of-alamo-dr...
  - mejutoco 2y ago
lgeorget 2y ago
> Are they doing something different, or is it just that their customers have to choose them repeatedly? I guess it's market-related. Your remarks remind me of Behringer. They make products for the music and audio enthusiasts. They have decent quality products at a very fair price that have been around for 10+ years now (like the X32 mixer) and apart from that, they churn out new products all the time (especially remakes of vintage synthesisers) to keep their users coming back and check out what's new.

by beloch 2y ago

nthingtohide 2y ago

Are you ignoring the benefits of network effects? Network effects should ideally improve recommendations for all subgenres of people.

_kush 2y ago

Porsche is easy to replace only if you bought it as just another fast car. If you bought it for the design, the legacy, or what the brand means to you, it’s not so easy. Netflix has their content as their moat. Even if someone today builds a better version of what Netflix used to be, it wouldn't matter. They won’t have the rights and licenses to the shows and movies. That’s what keeps people from switching. Porsche has to keep earning you as a customer with every new model. Netflix just needs to keep you watching.

echelon 2y ago
> Even if someone today builds a better version of what Netflix used to be, it wouldn't matter. They won’t have the rights and licenses to the shows and movies. That’s what keeps people from switching. What, apart from Stranger Things and Squid Game, has been enough of a cultural touchstone that it keeps people on Netflix? Those aren't things you keep coming back to again and again. Netflix doesn't own Friends, Seinfeld, The Office, Community, Parks and Rec, etc. I'd argue Max (nee HBO) has better legacy titles and franchises. They have both enduring IP as well as the reputation of being "destination television". The thing that keeps people from cancelling Netflix is that they have a better content slate of licensed classics paired with new originals. And they do it in the greatest volume of all the streamers, so there will be "something" on, even if it isn't particularly good.
- cestith 2y ago
  Nobody Wants This; Bridgerton; Wednesday; Man on the Inside; 3 Body Problem; Emily in Paris; the live-action Avatar: The Last Airbender; Love, Death, and Robots; How to Sell Drugs Online (Fast); Is It Cake?; Everybody’s Live with John Mulaney; and some others I’ve definitely had conversations about outside my own household. Arcane was a pretty big deal and it was released on Netflix and TenCent. They also have continued series that originated on other networks, including Unsolved Mysteries and Black Mirror. I know several people who watched Cyberpunk: Edgerunners on Netflix and are excited about the upcoming CDPR and Netflix project set in the Cyberpunk universe. I’ve had recommended to me and have recommended to others quite a few of their original movies. You might like 6 Undergound if you’re looking for an action movie.
  - BigGreenJorts 2y ago
    Love How to sell drug online (fast), surprised to see it listed here tho 'cause I've never heard anyone talk about it. Considering it got 4 seasons, it must be popular tho. And yeah, Bridgerton, Wednesday, Emily in Paris, and 3 Body Problem each certainly take their moment at least in my circles.
  - HWR_14 2y ago
    Also, Netflix kicked off the streaming premium shows with House of Cards and Orange is the New Black.
Arainach 2y ago
>Netflix has their content as their moat. Only Netflix-produced shows apply here. Before Netflix started producing content they had *no moat*. That's the big problem with media streaming - the content owners have all the leverage. Any profit you make they can see and simply increase licensing costs to transfer to them. If you don't want to pay they can (and will, and have done) start their own competitor since the technology isn't a moat - content ownership is.
- TimPC 2y ago
  Large aggregation is also to a certain degree a moat. Most creators have quickly found that people won't pay for one creator's content unless that creator is a huge volume creator (at the scale of maybe Disney). No one subscribes to a platform with 20 movies and 5 TV shows.
  - travisjungroth 2y ago
    Dropout.tv is a counterexample. They're not 20 movies and 5 TV shows, but they're closer to that than they are Disney. There are also all the people who make a living on Patreon.
- immibis 2y ago
  Which is also how rent works for physical locations, by the way.
- chii 2y ago
  Which is why back in the 1930's, there's anti-trust legislations preventing movie studios from owning cinemas. This prevents the ownership of IP from dictating prices in the cinema. The situation with streaming platforms are exactly equivalent, and these content production studios have learnt to prevent this sort of anti-trust legislations from forming. in fact, the cinema ownership decree has been ended i think: https://www.laineygossip.com/with-sonys-purchase-of-alamo-drafthouse-could-studios-buying-movie-theaters-become-hot-new-trend/78384 https://www.laineygossip.com/with-sonys-purchase-of-alamo-dr...
- mejutoco 2y ago

lgeorget 2y ago

> Are they doing something different, or is it just that their customers have to choose them repeatedly? I guess it's market-related. Your remarks remind me of Behringer. They make products for the music and audio enthusiasts. They have decent quality products at a very fair price that have been around for 10+ years now (like the X32 mixer) and apart from that, they churn out new products all the time (especially remakes of vintage synthesisers) to keep their users coming back and check out what's new.