Netflix deals at Sundance don’t make economic sense, they don’t have to
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Hollywood thinks they have money and power...until an Apple, or Google, or Amazon comes along and shows them what real economic clout looks like. Again, it may not end up better for creative folks or consumers, but it sure is funny while it's shaking out.
Something I read once stuck with me. I don't remember the exact wording, but basically the movie industry's entire market, soup to nuts, is an order of magnitude less than just one of Disney's physical goods departments.
An entire industry's market doesn't even hold a candle to one company's department. Hollywood is stranger than you could ever know. It makes a pitiful amount of money in relation to global capitalism, always has, always will. But it wields outsized influence on American policymaking regardless.
Another quote comes to mind. When Apple released the Watch, someone asked one of the top watch companies if they were worried about Apple butting into their market. He just smiled and said something to the effect of, "Call me when they can figure out how to get men to wear diamonds on anything other than a watch."
Established industries have spent long, long periods of time getting to know their customer. More often than not, they can take any upstart's best efforts and treat it as outsourced R&D. Netflix and Apple can succeed to their hearts content and still not have a prayer of unseating Hollywood.
And, I think it's too early to tell what'll happen to luxury watch makers. I think that cockiness is not well-founded. I'd be willing to bet that in a few more years, those traditional watches will be as common as cuff links. They'll still exist, but they won't be considered a standard part of people's every day wear, even people who buy and wear luxury goods.
I do agree with you, however, that Hollywood and the entertainment industry wield way more political power than the size of their industry would indicate. They're good at lobbying, and they have a few friends in very high places (like Disney) to fight their battles for them, such as copyright terms, for example.
I'm not sure where you're getting this from. Traditional watches have seen way more potential challengers than just the Apple Watch, and managed to survive nonetheless. You can think "yeah, but this time it's different," but try to think of it from the point of view of somebody whose been making and selling watches to people his whole life in an industry that's been making and selling watches for hundreds of years, as part of a company that's probably been around for at least a hundred years itself. These guys know a thing or two about why people buy watches.
Sometimes, things change.
Traditional watches have had their run. They will disappear, except for hipsters and old people, within a generation.
The items you mentioned fell out of fashion, so I believe his point still stands. It seems to me, watch makers aren't concerned about smart watches from a utilitarian point of view, but from a fashion point of view (After all most people stopped wearing watches once you could get the time on your phone).
Likewise, if it was just the case that watches simply had to have more functions to upend the market, smartphones would have eradicated traditional watches by now.
Whether or not they are underestimating Apple's ability to create a fashionable digital time piece is one thing, but it looks like watch makers understand that their customers aren't buying their products in order to measure their heart rate (or even check the time).
Luxury good makers have spent decades getting to know their customers, who are largely wealthy, cultured individuals. It is unlikely those individuals will suddenly switch their preferences to the Apple Watch. It is more likely that those individuals will no longer be wealthy. Over the last 15 years, we've seen a level of wealth instability that's been unprecedented since the Gilded Age, with whole industries disappearing and new fortunes being made.
I don't see the nouveau rich being a big fan of traditional Swiss watches. Most of the millionaires/billionaires I know tend to own Pebbles, actually.
[0] http://www.boxofficemojo.com/yearly/chart/?yr=2015
[1] http://www.statista.com/statistics/224397/quarterly-revenue-...
1: http://www.bloomberg.com/news/articles/2015-08-04/disney-pro...
His core idea is true even if he got the details wrong: that whole-industry revenue from movies is much smaller than Disney's overall business. That's an interesting insight.
Your comment might be more useful if you acknowledged his core idea even as you corrected the facts. Instead you appear to be in such a rush to prove you're smart that you totally missed the central point. Just sayin.
When have they ever not been? The watch, even back in it's heyday as something you carried around in your pocket, has always been a status-first, function-second fashion accessory. It has always been much, much cheaper to use the established methods of telling time, most villages first infrastructure investment was a town clock, once those became cost-effective to build.
It has only been very recently where it became fashionable for everyone to wear one, and that's only because of cheap electronic watches. Cheap electronic watches had the inevitable effect of whetting appetite for luxury options. Casio was the best thing that ever happened to luxury watch makers.
No clue why Europe is the only relevant market you're referencing here. Either way no clue what the market size for town clocks was.
But when you start to think more carefully about that scenario, it's rather ridiculous. People into watches don't just buy one. You don't "switch" brands, you just select a different one for your next purchase. It could be another Patek, perhaps an Audemars Piguet, or even an Apple Watch.
The idea that someone buying these watches would sell them all and buy an Apple Watch, never to own another high-end watch again, is simply absurd.
You're talking about collectors. They already do not represent a significant portion of the current market for high end watches. Sure, wealthy people who like watches probably have one or two "nice" watches. But, people who collect things will never be the majority of a mass market consumer good. There are car collectors with classic cars, that won't save internal combustion engines. There are people who collect old computers, too, but no one is seriously suggesting the Commodore 64 will ever be a mass market product again. People collect dolls, but Barbie doesn't make their millions from sales to collectors; they make their millions from the mass market.
So, you're arguing there will always be classic watch collectors. No problem. I'm sure there will be. Hell, there are still people that knit their own sweaters. Watch collectors will not be common, and they will not represent a multi-billion dollar market.
No, I'm not. I'm talking about people that buy high-end watches. They're like ties, it doesn't really make sense to own just one. You need one for every occasion, to match all the types of outfits you wear.
It makes sense for you to own just one high-end watch. But the kind of person that can pay $30K for a watch is not you. They are the people that keep Patek Phillipe in business. They made €765.6 million in 2013. The Swiss watch industry as a whole is around $10 billion.
The watch industry is sheltered by old, old money, patronized by the kind of people who could comfortably buy up the entire industry if they saw the need.
Market logic is a useful thing to grasp, but there are bigger things in the world than markets, and it's really useful to be able to understand how they work. What looks small often isn't. Bigger, better, faster, stronger are not the only rules the world lives by. There exist points at which normal logic upends and irrationality rules.
source - http://www.newyorker.com/news/daily-comment/the-kleptocrat-i...
Transformers the show was produced to sell Transformers the toys. The toys came first.
So will Amazon only pick up shows that encourage people to buy more stuff? They'll have big data to back up what types of content actually encourage that. Similarly, when will Netflix get into physical sales? Options like buy 'that thing' you just saw in 'that show', etc.
I don't think Amazon or Netflix will change anything there, it has been a reality for more than 20 years now.
https://hbr.org/2013/05/what-makes-a-good-corporate-st
It shows exactly this, but also states that physical sales in turn become ads for their movies. Literal quote: "Music: keeps films in mind when they're out of circulation." Let It Go must be a gold mine: content for the movie, a top 10 hit song, and an ad for Frozen DVDs & toys every time a little kid annoyingly runs around singing it.
That's true, but by the same token television has failed to unseat Hollywood -- millions of people still go to the movies every year. And yet I wouldn't quite describe motion pictures as having 'won'.
.. and then forgetting about it while wringing the customer for all they are worth. Or failing to notice that their customers are aging and not being replaced by new customers with different tastes.
That said, I've no idea whether Netflix is buying/wants to buy the rights to so much that it actually might bother sites like Mubi (where I work, FWIW) or Fandor. Somehow I doubt it.