Netflix plans to spend $8B to make its library 50 percent original by 2018 | Hacker News Reader

Netflix plans to spend $8B to make its library 50 percent original by 2018

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88 pointsartsandsci80 comments

I think it's important to note that this is not by choice, but rather the only path left to Netflix now that studios have realized the value of their catalogs to streaming. Netflix originally made a bunch of content deals that made them the sole streamer of entire backlogs of syndicated material. It worked out great for them and pretty decently for the studios too, but after Netflix's success the studios now realize what they gave away. As more of those deals expire the various studios are all looking for ways to get their own streaming platform up where they own more of the profits. A Netflix where the majority of shows are originals, is just an online only version of HBO, which is a shame because the experience is still vastly superior to all the other streaming options.

In their greed the studios have basically turned one of the great internet ideas into the second coming of cable. It's understandable why they would all want their own platform but it's much worse for the consumer

At least you can aggregate most of the streaming "channels" though Amazon so you don't have to use a bunch of different apps.

As long as the service doesn't start sucking (like other monopolies and government services), I think there are a lot of benefits to being able to stream through an established player: it's not just about licensing all the content people want to watch. Supporting a lot of devices (I care about Linux support, A LOT), having agreements to cache content locally with ISPs to ensure performance, etc. I wouldn't mind having a different 4-5 apps for different shows, or switching services every few months. But if everyone went solo and they were all still figuring out how to support everyone's device and how to scale? Not gonna bother.

Hulu has started offering this as well -- HBO, in particular, doesn't really care about the streaming platform per se so much as making the content available. I think this is likely to be a path that others will take to take advantage of the fact that consumers may have a preference, and HBO would prefer to offer a nice standalone app, but perfectly happy to let customers choose Amazon/Hulu etc., for customers who prefer a different or integrated experience.

HBO is owned by Time Warner who is also a partial owner of Hulu. Makes sense for them to not care which platform you stream from since either is preferable to Netflix.

I have this suspicion, though, that not all these streaming services will fare well. Sadly, yeah, there's going to be a handful and it'll feel similar to cable, but I think some will forego an independent streaming platform (or abandon ones later on) and license it out to the bigger players, especially because people aren't going to shell out money for each individual service. Though besides Hulu and Netflix, I don't know who else is a big streamer of third-party content. HBO does it with movies but nothing else AFAIK.

Maybe some other studios will copy the Hulu approach and create a group of networks all housed on one platform, but I do think it's going to be hard for anybody to push their way into the streaming market without a large backlog of media like Disney.

You're right, but I am not sure this is the end. We are entering a "streaming content desert" where every content-maker tries to make their own Netflix. Consumers will buy subscriptions to the top 3, at best. Most probably won't go beyond Amazon Prime and Netflix. In five or ten years, when the data finally rolls in that these disparate services are not making anything, have shoddy reviews from hastily-coded backends, etc, content makers will come crawling back. Or go out of business and get scooped up by the larger media houses.

By 2030 I expect Netflix, Amazon, Disney, and Hulu will have bought up the struggling or failing independent content makers. The markets for content will shrink and consolidate around the big name streaming kings. Then we will wonder why we gave up a cable-free-for-all for an oligopoly. ;)

The hilarious thing is this is going to drive people back to engaging in piracy on various levels (i.e. ripping streaming shows for personal use and/or organized piracy groups).

The main reason for piracy's decline is $20/month for a couple streaming services is less hassle for most people in the 1st world. They are restoring the incentives that led to its rise. Its quite hilarious.

I mean if eztv hadn't been taken over I'd be going to them right now because I'm tired of the balkanization of streaming services now that even Hulu is getting knifed in the back like Netflix is. As the knives come out and the backstabbing continues because "its worth money", people will be pushed back into doing that.

It certainly already has for me.

> The hilarious thing is this is going to drive people back to engaging in piracy on various levels

People aren't "driven to piracy". Piracy's a conscious decision to take what they want without paying for it.

It's a conscious decision, but that decision may be greatly influenced by the content being prohibitively expensive for them to otherwise obtain.

Or often not available at any price.

Sure, but that's the basic deal for any situation involving self-control and moral freedom.

There's an act you would like to perform, but it's unwise/moral/sinful/suboptimal. Do you do it or not?

Glad you asked! But some people may disagree with your premises rather than directly with your conclusions.

- if you steal that's bad - few people disagree with this

- if you sell unauthorized copies of someone else's thing, that's bad - few people disagree with this.

- if you make and watch an unauthorized copy of someone else's thing, but only for yourself, that's bad - most people kind of disagree with this, especially if in a vacuum.

- same as above, but you make minimum wage (because the economy is only growing for the 1%, not because you're lazy) at 2 jobs and you like 1 tv show from 6 Netflix clones and you think 6x12$/month is too much when you're already paying 100$+ for cable TV and internet and share a small apartment with 2 roommates, and student loans, and you don't have healthcare, so you pirate 3 tvshows. - you'll probably mentally rewrite this as "no, they were lazy, otherwise they'd be getting VC funding for their 3rd startup like me", but most people probably don't think this is wrong if they don't apply egocentric mental rewrites of reality. And of course, if the response to this person's "personal problems" is "not my problem, piracy objectively bad", then of course the correct response would be "somebody watched your video for free, not my problem".

- the content cannot be legally acquired in your country - probably less people find this bad.

- you pirated the content because you don't think the people who would profit deserve money - I would consider it ethical to pirate EA games and unethical to pirate most indie games. If ISIS (terrorist organisation) released a TV show, are you going to defend their IP rights?

- you pirated content because you don't believe in property rights - this one can be interesting. The USA's philosophical mind share is heavily propertarian, but how do you convince someone they stole your TV show view count (worth less than 10$ this month) when they believe you are sitting on top of the stolen value of the entire real estate of North America (stolen from the natives) and labor (some literally stolen from Africa, others where someone worth twice minimum wage in profits is paid minimum wage), then you have the balls to acuse them of theft? In fact, if you don't believe in property rights, then you think the gate keeping on this video is a form of theft, since without the right, it belongs to everyone.

"Piracy is theft, there are no valid nuances" isn't a good position.

> People aren't "driven to piracy". Piracy's a conscious decision to take what they want without paying for it.

Do you believe in psychological studies? Dark UI patterns?

Denying these things doesn't make it less true. People take the lowest effort route to the end goal.

Dark patterns don’t “make” people pirate.

Pirating is the act of saying, “I want something I don’t have the rights to have.” And then taking it. Period.

There’s no way to rationalize immoral unethical behavior by hiding behind “psychological studies” and “dark UI patterns”.

You seem to think I'm rationalizing the morality of the act by pointing out the morality/ethics is really just another thing humans bend on when the incentives change.

If you want to argue incentives are fictional because "morality", I think we aren't going to have a productive discussion.

I am not advocating for or against piracy, but it's not just the money. Convenience is also a major player. People want a Netflix situation where they can get most of their content and pay one bill and use one app. They don't want seven different services and bills and apps. If piracy becomes simpler than juggling all that, piracy rates will increase.

Piracy is a conscious decision to take the path of least resistance.

Yes, total cost is :

Cost of content + Cost of Aggravation. Even if I'm willing to pay for 10 services I dont care to look though the 10 services to find what i want to watch

Disney owns Hulu FYI https://en.wikipedia.org/wiki/Hulu#Business_history

Amazon Prime has a way to "add" channels to your subscription[1]. This is an interesting idea IMHO. I liked the Prime app (which is still worse than Netflix) more than HBO Now and subscribed via Prime. There's a third possible path forward, one where you don't have to subscribe to tens of services and use tens of apps but still get content from a wide variety of providers - one where the content makers don't have to give up their entire catalogue.

[1]https://www.amazon.com/b?_encoding=UTF8&filterId=OFFER_FILTE...

The Apple TV's "TV" app centralizes the content from other apps you install, including HBO, Amazon, Hulu and Netflix. You can even set the TV app to be default "home" screen.

we still aren't watching commercials on netflix yet so thats a win

What I don't understand is why Netflix never released a "white label" streaming service for studios. Yes, it's a crappier experience for the consumer to have to subscribe to N different services, but Netflix could have made a ton of revenue hosting everything. Maybe they still could.

This is something I expect them to reach fairly quickly, not necessarily through new content: Netflix has steadily carried less and less content from other companies as long as I've been a subscriber. They carry least-common-denominator content in the back catalog plus a few limited time recent movies to keep people hooked.

What I've realized is most well-regarded, award-winning film cannot be found on Netflix. They will easily reach 50% original content, mostly because they'll just continue dropping everyone else's content over time.

Thankfully, their original content alone is pretty much worth the price.

I disagree and haven't been subscribed to netflix for a year and a half. I've switched over to hulu which has a lot of the content that netflix has lost.

I noticed almost all of my recommendations were originals, so I started using a third party recommender [0], which has put me back to watching more old/well-regarded films. Haven’t found a source as good for old series, though.

[0] https://www.cinesift.com

Cool, I'll check this out. Hate browsing for content on the Netflix iOS app since it's all originals when I really just want something else lately.

What I'd really like is the ability to set a couple filters on my phone and shake it to get a random movie/series...

I've found flixable.co to be pretty good for finding targeted NF content.

Personally, I really don't care that Netflix doesn't have content from other companies - most of it is overrated trash.

I do like that they have more foreign language dubbing/subtitles - that makes TV a learning vehicle for my kids.

The problem is though, is that by doing this it is no longer the service that originally attracted many users: a one stop service to watch the things I want to watch.

It is just becoming the internet equivalent of an unlimited on-demand cable channel.

I've had my subscription for over 10 years. Unfortunately the streaming side does not have what originally attracted me. Fortunately they still have a DVD side to Netflix that has what originally attracted me.

Don't get me wrong. I've found Marco Polo, Stranger Things, House of Cards (S1 & S2) & several other shows to be really interesting. I just don't have the time to watch that many episodes. I prefer a nice short movie to unwind to when I have time.

That said, I wish more books & comics would be turned into a series instead of movies at the theater. Netflix proved this with 13 Reasons Why. Star Wars, Marvel, etc would also benefit from this.

>> Star Wars

Clone Wars is good. The first season has some questionable animation quality, but it improves.

> It is just becoming the internet equivalent of an unlimited on-demand cable channel.

With no commercials. All in all, That's still an improvement over traditional cable.

Can people stop saying this. There are plenty of ads in netflix/amazon/whatever shows.

They just make them unskippable by integrating them into their shows.

And I know other shows and movies do it as well, that is no reason to pretend you're not getting brainwashed to crave fast food and soda when watching these shows instead.

> Can people stop saying this. There are plenty of ads in netflix/amazon/whatever shows.

> They just make them unskippable by integrating them into their shows.

No, we're not going to stop saying this, because eliminating obnoxious commercial breaks is still a tremendous win.

True, but the reality is: Disney is going their own way. HBO, DC, CBS are all going their own way. The idea of a "one stop shop", also known as a monopoly doesn't make sense as soon as the market is large enough for multiple players.

Netflix doesn't want to pay the prices they'd have to in order to remain a one-stop shop, it certainly isn't practical at $9.99 a subscription.

There's no way the $100 a month cable subscription was suddenly going to be replaced by a $10 a month subscription. Now you can get CBS All Access, Netflix, Hulu, HBO GO, the new DC comics streaming service, the new Disney streaming service, a couple more probably, and you'll still be paying $100 a month... just a la carte for the channels you want.

HBO is owned by WB, DC is leveraging WB to build their streaming service. Disney and WB both have a stake in Hulu.

So the realistic remaining players after the dust settles would be Disney+Hulu, CBS, Netflix, and Amazon. And of those 4, CBS lacks the capital or content to compete with the other 3 and given their relatively friendly relationship with WB, I can see them integrating into the Disney/Hulu heavyweight.

What you 'see' lacks a lot of understanding.

- CBS remains the dominant power in network TV, shows like NCIS, Big Bang Theory, etc.

- CBS has always been the standout in refusing to offer their shows over Hulu, feeling they have enough independent value of their own.

All Access has it's weaknesses, but it's also one of the cheapest offerings ($5.99 to watch with commercials), and CBS easily has the content to work with. Discovery alone is worth the cost of admission, and for anyone who also watches CBS' network shows, it becomes an easy sell.

Again, at the end of the day, these businesses are based on a $100 a month cable package model. All of this content is not going to keep being made at $10 a month offerings. Either you're going to end up with ten services, or the three or four services you see 'consolidating' will end up costing $25 a month each.

Dominant meaning the smallest of the big 4 (Disney, Comcast, Fox, CBS) along with being the only one with a dropping stock price YoY in a bull market? (+3.2%, +16.6%, +25.1%, -8.25%)

Discovery is my favorite show at the moment, but one show can't carry a company.

I will restate what I wrote above: CBS is the number one network channel. There are a big three: CBS, NBC, and ABC.

Disney owns the third biggest channel, Comcast owns the second biggest channel. Fox isn't even on the playing field, and is cashing in their entertainment arm.

Unless more people in total subscribe at the lower price points. Not everyone had cable.

Which is probably more than cancled out by lack of advertising revenue. Cable networks get 50% of their revenue from ads.

> The idea of a "one stop shop", also known as a monopoly doesn't make sense as soon as the market is large enough for multiple players.

It would be a monopoly if it were the only place to get that content; but a one stop shop, where the content is not exclusive, would still be highly valuable to a lot of consumers.

Exactly, the exclusive content rights will be a killer. I hope this is where the market eventually moves. In the near term content creation networks (CBS, NBC, Disney, etc) will probably try to set up their own streaming services to stream their own content exclusively. I think that they will realize they aren't making much money with their own platform, and hopefully if they are smart, will again sell the rights to other streaming services.

Perhaps having a minority of exclusive content will still be possible/desirable as a market differentiation mechanism.

>Thankfully, their original content alone is pretty much worth the price.

Have to give Netflix credit. They have executed two of the biggest strategy pivots in my recent memory. Transitioning to streaming from the physical mail order system and more recently adjusting to increasing fees by building their own "studio" and producing content.

I went from being pissed that movies continuously disappeared from my queue to favoring NetFlix Originals over major releases.

Thankfully, their original content alone is pretty much worth the price.

I've enjoyed a lot of what I've watched but I've never actively looked for anything on there. It's all been random chance because it looked interesting while I was browsing. It wouldn't take many poor choices before I cancelled if there was any other content...

Online movie services are a disappointment because the selection is terrible.

Go to IMDB.com. Pick a random movie. Click on the director to see more movies by him or her. Choose one. Click the lead actor to see more movies with him or her. Choose one. Click the studio to see more movies by them. Choose one.

Why can't I do this with any streaming service?

There's no decent search and filter ability because there's not enough selection to support it. The interfaces are all geared toward suggesting what you might like, not letting you search for what you know you want, or filter out what you know you don't.

Want to see only Best Picture winners? Only 5-star PG movies? Only detective films from before 1970? Nope. Sorry, not enough selection. Maybe you'd like this new drama we just made?

Technically, we could have a service with every movie ever made. But we don't, for stupid business reasons.

If we ever get a service with a decent selection, it won't be possible for it to have 50% original content because it would take a hundred years of solid filming to get there.

I regularly use https://www.justwatch.com for looking up movies. But its scraping abilities leave a lot to be desired; they are often wrong. And the data is not very transparent (e.g. historical data).

I have considered creating an alternative. And have the client choose the streaming services they have like JustWatch. However, for unavailable movies, have a "I'd watch this if it were streaming for me" button. Then I'd record the cross-section of that user's streaming services and their request and keep public counters. I'd remove all users votes if that movie became available for any of their streaming options. I'd show votes for movie per streaming subscription service. Also, in the interest of transparency, I'd keep a running history of when movies came and went from providers. I'd also scrape TV guide to see when they are on TNT or whatever. This is the type of data people deserve.

Aside: JustWatch people, I know you browse HN...you can steal this idea and monetize it by, instead of being nice like me and making the votes transparent, just keep the counters internal and sell them as data points. You can couple it into a "I'd watch this! Notify me when this movie is available" feature.

> But its scraping abilities leave a lot to be desired; they are often wrong.

If you spot any mistakes, especially ones that are consistent and happen frequently (wrong price on a provider,...) feel free to email us at data-police@justwatch.com and we'll take a look. We are very responsive when it comes to that and are constantly improving our scraping infrastructure to stay as accurate as possible. Unfortunately it'll always be a bit of catching up if you scrape hundred of third party providers in more than 30 countries that constantly change their APIs or websites :)

As for the "notification" system. That's definitely something that we think about, stay tuned!

Disclaimer: I work on the JW scraper

By "often wrong" above, I should clarify that I find maybe a mistake a week browsing hundreds. I don't want to give anyone the wrong impression that it is wrong most of the time or anything. I do report incorrections through the app. I love the feature that allows me to put in my email to get notified when the issue is fixed, I wish more companies did this (granted I only put my email on a small percentage of the issues I find). To date, I have not seen anything systemic though.

Filtering by Metacritic scores please! They're more useful than Rotten Tomatoes for TV shows.

I wish they would spend more money on finding old films and digitizing them. There have to be vaults of old Italian films that don't have significant licensing costs. Sure, I may represent a small segment of their paying customers, but I find myself using Amazon's video service more and more because of this. To me, a newly released old movie has similar value to a newly released new movie, and I bet the former can come cheaper and faster (I personally am mostly done w/ TV shows and often consider the format a protracted way to consume my time over a standalone movie).

The problem is that there is also a vanishingly small audience of people who want to watch old Italian films (or old films from anywhere, really).

The mass audience only cares about the new releases. This has been true since the dawn of home video; anyone who ever browsed the shelves of a Blockbuster store will remember how lopsided the selection was -- entire walls filled with copies of the latest releases, a few shelves with movies released over the last ten years, practically nothing farther beyond that. They didn't stock that way because they wanted to, they stocked that way because recent movies where what their customers wanted to rent.

Even universally-acknowledged classics are hard to market to the mass audience -- there are tons of people who flat out refuse to watch anything in black and white, for instance.

I agree the audience is currently small, but I don't agree it is getting smaller. People rediscover eras and genres.

The good part for Netflix vs Blockbuster is that this is a one-time cost and it will be digitized forever. You don't have to market it to a mass audience or attempt to determine the number of VHSs you'd have to create. I don't think they need to market it at all. Just do it. Surely it is only a fraction of the cost of having Will Smith in a Police-Alien movie and it'll boost your catalog.

>I agree the audience is currently small, but I don't agree it is getting smaller. People rediscover eras and genres.

Slowly enough to not matter and always stay a niche endeavour.

I feel libraries should be doing this. Maybe the national library of each country should archive every out of license movie. Heck they can even just use Youtube if they don't have the infrastructure to do so.

In a perfect world, I'd agree. However, I think the technical challenge is in the digitization and I'm not the most confident that the state could tackle it. I think a company w/ a financial incentive could setup a high quality restoration and curation process. But in the current absence of haste, I'll take anything for now.

I get why they feel they need to do this, but I hate the trend of everyone taking their ball and going home. I loved how with Netflix, I had most of the content I would want right there on a single service.

Note to content providers: I'm not going to have Disney, Netflix, HBO, CBS, Hulu, etc subscriptions. It's just not going to happen. I'll do without first.

I've stopped using torrents since I subscribed to Netflix and Spotify years ago, but I can see myself very well returning to it if that scattering trend continues.

I sense a resurrection of torrenting and ironically enough, DVD rentals. BTW, Netflix still has a very rich library of streaming content, but in other world regions. A good global VPN service and some DNS tweaks will unlock a ton of streaming content.

A good global VPN service and some DNS tweaks will unlock a ton of streaming content.

Can you recommend something the works? I used to have a couple of different ones, but Netflix got really good a blocking VPNs a while back so I kind of gave up.

You are right, it is a bit of cat and mouse game, but I have been quite successful at using a Nordvpn's French and Brazilian pops (for at least the past 6 months). You have to also modify your client DNS settings to either use European/S. American DNS servers (plenty of free ones) so that Netflix's apis will resolve to the proper region, otherwise you will get only NA catalog, even if you are on VPN. good luck!

> Note to content providers: I'm not going to have Disney, Netflix, HBO, CBS, Hulu, etc subscriptions. It's just not going to happen.

The history of cable TV, in which people happily paid $100+ for a bundled content package, suggests otherwise.

My guess is that eventually streaming content will go the same route. When the providers realize that there's not enough dollars out there to support everybody having ten $10/month content subscriptions, they'll start merging and there will be a race to see which one can put together the first bundle that most people will consider "good enough."

I think the argument is not that people can't imagine paying for multiple services (though I would expect there is a breaking point, since you're already paying your ISP), but that the friction of having multiple bills, multiple accounts, multiple apps on your devices (if they're all supported, etc.) will make the whole arrangement unappealing.

This seems like a huge opportunity for Hulu or whatever service the 21Fox/Disney deal leads to. HBO has long proven that there is tremendous value in originals, but having a really broad base of legacy content seems like it could attract a ton of people who don't place the same value on new shows.

A lot of TV shows and movies are now only available on Hulu. I've started subscribing, and am seriously considering dumping Netflix.

I really enjoy a lot of Netflix originals, but I wish they would direct more energy into improving their streaming library's 3rd party content. There are so many films only available via their DVD service, which I (and many others) no longer use.

Netflix simply can’t afford the licensing fees. All the other movie companies are trying to put Netflix out of business and aren’t going to charge them anything like a reasonable rate.

It's worse than that. Studio's are simply declining to license their stuff to Netflix for streaming at all. Losing Disney was incredibly telling because their catalog is so big and diverse I can't imagine that Netflix wasn't willing to write a blank check to ensure they didn't lose access to that content. The children's movies alone would be worth the cost.

the best way to watch movies is buying the dvd for $1 at your local video store. or library sale. or thrift store. you just can’t easily search

With some extra work you can extract the movie and place it on a plex server, now you have a searchable movie collection.

I'm more and more disappointed in their content. I'm sure some people love their original content, but I am not one of them. Nevertheless, I stick with Netflix because their UI for navigating it all, while not perfect, is far better than the other streaming services. And they have easy to use profiles including a 'Kids' option.

But if any other provider catches up to their UX, I'll drop Netflix in a second.

From what I understand Netflix is pretty smart about where/what they film to take advantage of tax credits and other incentives countries provide. So that $8B really stretches.

Seems like they are at the point where they need to keep their head above water long enough to let other content providers try/decide if it's worth trying to compete in the streaming business.

How about spending $8B to make the current library of titles available to more regions...

$8B could add a lot of good movies that are currently absent from the collection. Original content is probably a better financial move, but my impression of the quality of shows on Netflix is not high.

Netflix original content is a mixed bag. They have some really good shows, and some more forgettable ones that are the type you throw on for background noise.

Considering this means a lot of low quality sitcoms and endless comic book television series (until the next fad is made manifest), its hardly a value proposition.

this is likely to be an unpopular opinion but I hope they produce content that is also family appropriate. It doesn't have to suck or be cliche, just be relatively clean. Too much of the original content I am seeing is TV-MA. If they do this they will enfranchise many families to ditch cable than would otherwise have done so.

well, if their catalog grows to 50% original content, here's hoping netflix adopt more UK/HBO style formats for tv shows.

have a clear defined arc lasting ~3 seasons with 6/8 episodes in each season..and then just stop.

point in case, house of cards should have been a 2 series show with frank never becoming President.

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