Netflix Flexes
stratechery.com
stratechery.com
All it takes is for them to slip it in to people's "custom, curated" lists at a higher frequency, and maybe do a little subtle social-media engineering on Reddit/Facebook, and bam: instant box office smash of a derivative film with a 66% on Rotten Tomatoes.
That's a huge "flex". Big studios could pump hundreds of millions into a decent film and still have it flop. Netflix can take a B-movie and make it a sensation with relative ease. No wonder every game in town is trying to break into this model. Why invest millions on a potential flop when you can engineer one with 75% accuracy whenever you wish?
(though maybe I'm being just a bit too paranoid here. I have to admit some of the Bird Box magic stems from its intriguing concept. guerilla marketing doesn't work so well if what you're selling doesn't seem too interesting)
edit: people are debating the idea of "box office smash" here. I didn't use that phrase to emphasize direct earnings as a result of the film (which is "free" to watch if you pay for a subscription). The article addresses this:
> Secondly, and relatedly, Netflix is counting on subscription revenue. To that end, producing a piece of content that 58% of its subscriber base viewed in a single month is by definition a triumph (and yes, worth ~$700 million).
The idea is that Netflix was able to coerce more than half of its subscribers to watch this film. That's crazy. The result, as we see in the article, is a tidal-wave of Bird Box achieving near-meme status. How does that feel to someone who does not have a Netflix subscription? What big joke/story are they missing out on? For only $14.99 a month, they can win social acceptance by being "in the know" of the current big thing.
- None of the blockbusters are available,
- Instead, you’ll find a pale B-series copy, oftentimes with plain cringy actors.
Seeing memes on facebook/9Gag, this impression is quite popular in teenagers too. And that’s a very, very bad reputation to have.
A "masterpiece" is in the eye of the beholder.
A masterpiece to some is not to another.
Roma is one example: it clearly is masterfully done. Film critics love it. I loved it and it resonated with me. Have you seen it yet? Maybe you think it's "mediocre".
I liked Bird Box because it was apocalyptic and dealt with the downfall of society, a common theme in this genre. I don't care if anyone else liked it or didn't, the film was made for me. I see Netflix just released Kingdom. I have loved it so far.
I could list dozens of shows and movies that I have been extremely thrilled with. Will everyone else? I. Don't. Care.
As long as Netflix keeps pumping in the fantastic content, people will continue to subscribe.
I think you just need to look harder in Netflix. Try some British shows like Marcella or The Bodyguard.
Netflix only has to make a crap load of content available to cover all the content space. The average quality according to any particular user doesn't have to be good if their recommendation engine can find your niche. Think what the average quality of YouTube is.
I've been very happy with Netflix's originals and think they're top-notch. They have actually solidified my subscription--if they continue to produce shows at the rate and quality they have been, they have a customer for life in me.
Oscar contenders like Roma and Beast of No Nation (a bit early for it's time if you ask me).
Partnerships with foreign content makers to act as an international distributor (BBC produced, Golden Globe Winner, The Bodyguard for example).
Top quality original TV: The Crown for example, fueled by contracts with big name show-runners and writers to produce them (Shonda Rhymes).
And finally, high value syndication targets (Friends, Mad Men, The Office).
Netflix's content allocation seems pretty clear, the next few years will be optimization at the margins.
I loved Violet Evergreen. It was very well done as an animation. The others are “your lie in April”. That legit made me sob. I usually don’t get that emotional. (Although not a Netflix original).
Bird box has an excellent premise, which turns out to just be a hook on which to hang some character development (I did quite enjoy it though).
Death note has a really derivative premise, and then goes nuts drilling down in to the exact mechanics of how such a thing would work - there's no deus ex machina (apart from the literal god of the plot), instead it plays within it's own rules very exactly and never cheats the audience, instead introducing very clever "hacks" to its own system.
For castlevania in particular, the art and animation really declined between the first and second season, the tone and atmosphere seemed totally different and the story just kinda went offs the rails.
I thoroughly enjoyed the first season, it was one of the best video game adaptations i've seen but the second season just didn't quite do it for me. It just felt rushed and cheap.
The plot was interesting, I love castlevania, but the quality is still incredibly low from my point of view.
I think of Shingeki no Kyojin, that destroys Castlevania quality by so many levels...
Be careful with FUMOFFU, leads to death due to laughter
They cover a wide variety of range, not all of them might be of your taste. You also need to get used to some things that are Japanese culture in animes (their way of being fun, their way of being embarassed by stuff that is not in your culture and so on).
Insane plot (like REALLY incredible): - Code Geass - Death Note - Steins; Gate - Shingeki no Kyojin (not completed, season 4 coming soon) - Made in Abyss (not completed, season 2 coming soon)
Epic (you feel hyped): - Sword Art Online - Full Metal Panic - Tengen Toppa Gurren Lagann (this anime is amazing, but I recommend watching it only after you've watched quite a few animes. Rewatching it leads to improvement. It's like when you try wine for the first time and it sucks, then it turns great) - No Game No Life - Boku No Hero Academia - Accel World
Laugh: - Full Metal Panic FUMOFFU (requires watching the season 1 first)
This list is purely based on my taste, but I watched over 200 animes (lot of bad stuff too, sadly), so for a beginner it's a good baseline.
Good plot (not like the insane ones, still good): - Psycho-Pass (AMAZING soundtrack) - Ga-Rei Zero - Full Metal Alchemist: Brotherhood
Disclaimer: I watch a lot of animes since most tv shows don't come even close to their plots, soundtracks and epic moments.
Netflix's goal is quite distinct from much of its competition. In simplistic terms, their goal is to release enough compelling content to keep existing subscribers subscribed and then hopefully entice new users to sign up more than old users quit. These "flexes" I would assume are primarily for the second category. If you make something enough of an event, with subscribers talking about it all the time, maybe non-subscribers will think they are missing out and take the plunge. If that fails, however, they only really lose out on the marketing costs, since it's very unlikely to affect the existing subscriber base at all.
I switched to amazon video... I can't say I'm always thrilled with the video quality, but amazon video usually has what I want to watch, and they make watching it low effort (They usually charge me a few dollars to watch it, but if I'm going to take two hours to watch something, a few dollars is the least of the cost.)
I mean, one could argue that I'd be better served by the netflix disk service, but I can't reliably predict what I'm going to want to watch ahead, and I don't have a convenient device for watching disks in the gym. (I know they exist, and I used to have one. But the kindle fire is a lot more convenient.)
Netflix on the other hand has their tech together. Beautiful streaming and lightweight responsive app.
Please Amazon, pay your Engineers well and make an app that doesn’t crash at the least.
You seem to be forgetting the downright user hostile UX, though maybe not as user hostile as Hulu and Amazon and everyone else
Netflix, on the other hand, has almost everything in English with English subs (exceptions are foreign language shows and most anime)
Of course, it doesn't help Amazon that their interface is atrocious and that they have ads. (Well, I mean Netflix is working towards making their interface worse, but for now, they are still miles ahead)
If I wouldn't get Prime Video for free with my normal prime subscription for shipping, I'd never use it. I barely ever use it as is.
I mean, I can get an amazon.co.jp and amazon.fr and amazon.es account, and tie them to different kindles, but each time I want to switch kindles, i have to wipe the thing, and get rid of my english books.
I'm totally willing to pay a premium for kindle convenience, and deal with not being able to loan books so easily, etc, etc, the kindle walled garden actually works really well for me in English but once you move out of English, it's just not convenient anymore.
English books work fine, but for some reason, I can't add skills while Alexa is in English. I need to switch it to German, add skills, switch it back to English for it to work.
In other words, I’m saying that yes, Netflix can fairly easily promote a film and get millions of people to watch it, but that doesn’t mean they have a magical sustainable model. If they were to consistently flex this muscle with content people don’t like, it’s pretty obvious things will turn out badly for them.
It seems like the real magic is the capability to make a particular piece of content the “thing that prople talk about”, and so you watch it just so that you’re able to talk about it in conversation, because it’s part of the social consciousness.
the article you're commenting on makes a pretty thorough case for why it is a box office hit.
How is a film with literally $0 at the box office and “instant box office smash”.
Sure, if as many people as watched it paid for full-time tickets at a theater it would have been a stunning box office, but all that proves is that more people will pay a $0 marginal cost than the cost of theater tickets. Which we already knew.
> "...if Netflix wants to make any of their original content one of the most-watched media events of the year, they can do it, regardless of the quality of the content itself."
birdbox isn't the first promoted original content. it certainly drives success, but ultimately to get 45 million views, probably more than 2x all of who have ever seen game of thrones (16 million is their highest rating ever), is big.
I did think the movie was kinda derivative, a mix of the happening and vanishing on 7th street, but its still a must watch if you are into horror.
every game in town is 2nd guessing their models, because they are extremely outdated. Comcast's (NBC etc) entire model is based around market share - broadcast television. Hollywood is around big box office high spending action movies to make global sales. These is fine in some senses, but it means there are types of content we havent seen much, and while Netflix could satisfy niche customers, it was generally thought that it couldn't compete with large budget content producers. Now maybe it can, and that requires content providers to re-think.
>"The idea is that Netflix was able to coerce more than half of its subscribers to watch this film. That's crazy. The result, as we see in the article, is a tidal-wave of Bird Box achieving near-meme status. How does that feel to someone who does not have a Netflix subscription? What big joke/story are they missing out on? For only $14.99 a month, they can win social acceptance by being "in the know" of the current big thing."
for the longest time, ironically this has been hbo, especially with game of thrones. i feel like they must be paying reporters lots of money to go on about it so much, because its not really watched by that many people - compared to how much its talked about.
> probably more than 2x all of who have ever seen game of thrones (16 million is their highest rating ever)
I don't think that's an accurate measure for GoT as it's probably the most pirated TV show ever, that 16 million figure you quoted is people watching on HBO only. Those of us outside of the US either watch it on a different network (e.g. Sky in the UK) or just pirate it.
You may be getting bored of this trope (DON'T USE THIS SENSE OR YOU DIE) but that doesn't make the individual films terrible.
Slip it in? I feel like Netflix beats me over the head with their own content even when I'm looking for something else.....
Bird Box was one of the best horror movies I've ever seen.
What definition of 'coerce' are you using? I'm a Netflix subscriber. I saw this thing popup in my feed. Had a glance. Read some articles about it. Doesn't sound overwhelmingly compelling to me. I've added it to 'My List' but keep finding other stuff to watch ahead of it. I suspect it will end up getting removed from my list without having been watched. I guess I'm in the other half of Netflix users?
Yes they can do it but, not without consequences. I thought Bird Box was pretty lame and given a dozen experiences like these, it'd completely destroy their reputation for putting out decent content for me, and I'd unsubscribe in a world where non-original content was an important factor. (and looking at the media landscape, with content companies creating their own platforms, or publishing on competing platforms, that world is becoming more and more a reality).
It's a bit like saying that Apple can create a big software hype by pushing an iOS 13, just by pushing it as a notification on 1.3 billion iOS devices. But if iOS 13 is complete rubbish, they can only perform that 'trick' a few times before they lose customers.
That plus, one can wonder if they can actually do it. Bird Box indeed took on meme status, me and my gf only watched it because it showed up as a joke on our feeds about 20 times and we had nothing better to do one night while eating food and decompressing from work. There's plenty of netflix content that pretty much bombed, despite showing up for weeks on end on the Netflix front page whenever I logged in. This felt more like the Flappy Bird of movies, a gimmick, a meme, not the next Harry Potter or Game of Thrones that turns people into long-lasting fans of your content.
Is digital content streaming that simple that there is no value in creating defensible IP? Or is it more a function of dumb data pipes which do not favor the smartest content distribution so there’s no need for that investment?
I believe this is has a huge portion of Netflix's ability to get tons of people to watch their content. Fish in a barrel, trapped audience, whatever cliché you prefer. Of course I agree with the hype machine and self-promo within their apps as you've described as well. Combined together, it's a powerful marketing/promotion result.
Conversely, Bird Box is about robbing us of one of our senses. In one movie, you have to be quiet - you are robbed of a form of expression. But you can still see, you can still hear, you are attempting to hide. In the other, there is no attempt to hide, at least from the monsters or force or whatever you want to call it. You just have to deny yourself one of your most important senses to be safe.
They're both set in a post-apocalyptic world, or at least partially so, but that's hardly unique to them or something A Quiet Place invented.
I thought A Quiet Place was a bad movie with a flawed premise that prevented suspension of disbelief due to just how ridiculous the premise was, and then totally failing to subvert the ridiculousness. I saw it long before I saw Bird Box. I didn't think Bird Box was a great movie, but I did think that it was significantly more enjoyable than A Quiet Place.
How is this different from any other Netflix show/film? They can pay for marketing and force it to be recommended for all users, but that's about it. The difference is that Bird Box had a lot of viral potential and turned into a meme because of its content, not external factors.
It's starting to remind me of another company which at one point in their evolution prioritised user engagement over everything else – Facebook. Once this occurs, it is a long slippery slope which leads to a series of user hostile internal decisions which ultimately leads to the user and their privacy becoming the product.
When you actually pay for Netflix and this is their modus operandi it leaves a large opening for a competitor with a more user-focused approach to come in and gain marketshare.
A few examples of how Netflix is prioritising engagement over their users:
- Auto-playing shows once a show has finished (this leads lazy users unnecessarily watching more Netflix)
- Promoting Netflix shows above third party content, irrespective of quality. This prioritises what's best for Netflix instead of promoting the best content for the user.
- Algorithmically modifying the poster frames / thumbnails of shows to be more appealing to users. Again promoting engagement and misleading users of the true content of the show.
- Removing the ability to easily see the complete catalogue via comprehensive categories, which enhances the reliance users have on algorithmic suggestions
I'm sure all of this has been tested in Netflix and they can show that these approaches increase stickiness and engagement. Stickiness and engagement is not what is in the users best interest however and over the medium and long term I think it will be detrimental to a better measurement which is user satisfaction.
It would be tremendous good will if Netlifx took insight from psychology and applied it to their customer's mental health _rather_ than for the opposite, in the form or binge watching and engagement. Otherwise their motive is not distinguishable from that of opioid merchants.
To me, this one seems counterproductive to both Netflix's and the consumer's shared goal of engaging in interesting, new content. I've had occasions where I've signed in to my "guest" profile and seen media that never appeared at all under my main profile, and have enjoyed watching it, where at the same time my main profile has felt a bit stale.
Netflix might have confidence in their all seeing all knowing algorithm, but with myself as a single data point, it has sometimes failed to suggest things that I've found interesting.
At least you can still disable the auto-play next episode "feature".
I've read about this a few times. If you disable it once, does it get disabled permanently? Because Netflix (unlike the Amazon Prime Video ads) never plays trailers with sound for me.
> auto-play next episode "feature"
I'd certainly call it a feature. I'd hate having to manually click every time I want to see a new episode.
I have a recent AppleTV, which doesn't have any way to disable auto-playing trailers. Same for my previous STB (Roku). This is a somewhat new feature, so some older STBs and Smart TVs don't have it, but that's just because they can't be updated to the latest version of the Netflix app.
You can disable auto-play next episode across all interfaces and devices in the settings on netflix.com. I just wish there was an equivalent switch for trailers.
But it's not necessarily "misleading". Eg. if I like actor A and you like actor B, and both are starring in the movie, showing us two different posters with actor A and B respectively doesn't really mislead neither of us. With posters it's always "blind men and an elephant" anyway.
For what it's worth, I recommend the RateFlix extension for Chrome. It augments Netlifx UI by showing IMDB and Rotten Tomatoes ratings next to the titles. It makes it much easier to dismiss most of the trash.
> But it's not necessarily "misleading"
I suspect GP was talking about when Netflix was accused of displaying different posters based on race in an attempt to manipulate and mislead[0]:
> Rather than showcasing its two white leads, the poster for Like Father instead suggests to some subscribers that there are major roles for African-American actors Blaire Brooks and Leonard Ouzts
[0] https://news.sky.com/story/netflix-deceiving-black-users-wit...
However that's the past now, and the OA is missing a few trends:
First, Netflix will not maintain its UX lead at the same level for long. Video streaming like all technology is commoditizing, the experience will get better and better from non-tech companies. Meanwhile Netflix is continuing to plow down this path of algorithm-driven engagement and ramming stuff down people's throats with auto-play, bad search, and other dark patterns. Given the current cultural zeitgeist (eg. Facebook backlash), this isn't going to end well if they don't change course.
Perhaps even more important is the fact that Netflix has a long way to go on the production side. There's a lot of volume of Netflix productions, but not a lot of quality. This is where the OA underestimates Disney—their content is way broader and better than Netflix, and people care a lot about that.
Netflix's experimental Interactive content and Reed Hasting's comments about Fortnite also give me pause. This is typical SV-style next-big-thing thinking, but it also represents taking the eye off the ball. Video games are video games, Netflix doesn't know shit about them, and if you ask me they are better off focusing on their core competency versus trying to build a moat with a gimmicky concept.
5 years ago I would have said Netflix has a better chance at becoming a great producer than Disney has at creating a great streaming experience, but now I'm not so sure.
Have to wait for S2, being edited currently I think.
I also liked the end of Lost, HIMYM, Quantum Leap, Mad Men, and BSG, so I'm probably just weird.
The ending of HIMYM was awfully contrived.
The ending of Mad Men, however, was thought-provoking.
Brit Marling had a good ending in "Another Earth", but both "The East" and "Sound of my voice" copped out with cliches - imho.
Arguably getting the ending right is among the most difficult parts of the job.
Redbox seems to be very successful with games (the redbox in my neighborhood is typically sold out of games by 7pm, daily), and there’s a deep inventory of quality games that are cheap in comparison to video and can consume many hours of engagement.
Apple’s short-sighted, dependence on skinner-box free to play games demonstrates a hunger for zero marginal cost entertainment. The production cost for casual games is near zero; If Netflix could offer quality product to fill that hunger without the casino aspects of the AppStore, that’s a huge business.
Ultimately what everyone wants is a super easy interface to pay for precise a la carte content, never bundled, never subscription-based. If a given person wants to buy everything from HBO, they still could, and maybe could get a discount for subscribing, but nobody wants to be forced to subscribe to watch just a handful of content items.
It doesn’t matter if it’s Disney streaming, Netflix, Premier League soccer, or anything else. It’s clear rent-seeking to create walled gardens of content only unlockable by bundled subscriptions, and the clear consumer drive existentially threatening the TV industry is that all anybody wants is a dumb pipe with an easy interface to individually purchase each content item on its own merit, flat out.
Many streaming services, particularly Amazon’s, offer this to a way higher degree than Netflix, especially in terms of sports access and new release films.
Netflix is betting that it can create locked-in content that will compel people to stay subscribing, but I think this is a long-term failing idea. Bird Box is a great example: really poor production, sloppy writing with contrived villains, lowest common denominator stuff. Stranger Things? I couldn’t see one reason to care about it. Not exceptionally bad, just overproduced blandness. The gimmick of making things into viral phenomena is not a stable business plan in this area.
As prices rise, Netflix just becomes another HBO. A walled garden of content, except HBO actually makes good television and knows how to do it. Netflix is trashing its own brand with mindless crap. It’s network quality for premium add-on prices. Especially if economic hard times hit, this is exactly something people are going to realize they can live without.
I 100% do not want this. I want to pay for one subscription to get all the media I want (music, tv shows, movies, books, etc). And I don’t care at all about ownership. I’d pay $50-100/month for this subscription, and we’re getting close if you don’t mind cobbling together a half dozen subscriptions and using a bunch of different apps.
For example Amazon now has The Expanse, Starz has Counterpart, Netflix has Black Mirror and I also liked the new Lost in Space. Hulu has... Future Man? CBS All Access has... the ability to ruin Star Trek, so I might want to watch that train wreck.
Anyway if there was a cheap subscription like Amazon Prime which allowed me to try out a couple free episodes, then pay $3 per episode that would work. That way I feel like I'm supporting the specific shows I want to see.
It sounds like you specifically do want a single interface for a la carte content (note: this has nothing to do with ownership vs restricted access), and you currently achieve something like this with a combination of subscription products that bundle a bunch of content you do want with a bunch of other content you don’t want but also don’t care about.
A situation where the price is broken down to individually activate just the content you want and not the content you don’t would offer exactly the same experience but with less irrelevant content and you’d only pay for what you choose to consume.
In other words, the concept of “I pay for one subscription and get exactly and only all the content I personally want” is equivalent to a unified portal for a la carte purchasing.. activating an on-going payment for ability to see Show A and never activating the same payment for Show B which you don’t care for. The “subscription price” is just the total price of your personal a la carte activations (be they ownership purchases, rentals, or recuring payments to license access to that singular content).
At any rate, your comment here is explicitly contradictory.
I explicitly do NOT want to pay a la carte. I understand what you’re saying about only paying for what I consume and not paying for any irrelevant content.
And yet, I prefer a subscription, even if the total cost is higher. I don’t want the cognitive overhead of constantly trying to decide if it’s worth a little bit of money to purchase or rent a specific piece of content. I’d much rather pay a flat fee once per month for all-you-can-consume access. If we were talking about something very expensive, then my position might differ, but in the grand scheme of things, this is relatively trivial, so I’m happy to pay a few extra bucks to not think about it as much.
But you already engage with this decision-making overhead when deciding what to watch and not watch. It’s built into any viewing system whether it’s all-you-can-watch after entry in a portal or not.
Also I hardly believe you never purchase on-demand content at all, especially since no combination of subscription services currently covers everything, and large chunks of content still can only be purchases in an on-demand fashion.
For example, I buy all my music outright from Amazon & Bandcamp, downloaded to my laptop. From there I use the VLC app to propagate the music to my phone, ipad, etc.
Most normal consumers wouldn’t put up with this. That doesn’t mean they wouldn’t rather own the music and pay only for what they personally consume. It just means Apple & Spotify have set up a big moat. You can’t start a startup to compete with them if your main sell is an easy way to have the raw, owned music files propagated to many devices and organized for easy browsing, because the big players (who don’t want consumers to have that) will just negotiate exclusive licenses and disallow you from having inventory.
Uh, iPods and iTunes? DRM-free music from the iTunes Store?
>For example, I buy all my music outright from Amazon & Bandcamp, downloaded to my laptop. From there I use the VLC app to propagate the music to my phone, ipad, etc.
You've just described iTunes though! And iTunes Match since 2011, for $25/year. It's even DRM-free. That was the way people did music before, and it turns out that when you can rent every album in the world for ten bucks a month nobody wants to be spending twenty bucks on every album they want anymore.
The success of Netflix, Spotify, and even TV itself seems to show that a large number of people don't want to self curate, and would prefer to consume content curated by a third party; even if the quality suffers, the lower effort expended might make up for it.
The point wasn't that they should compete with video games, or enter the space.
The point was that in the war for attention and engagement, netflix sees better competition from non-tv streaming services than it sees from other tv streaming services. It was a dig on HBO and Disney, not a suggestion for a new business venture.
Sure it got tons of views because of all the advertisement and the tons of focus on viral media advertisement on every single platform. But the reaction from people watching it before me when asked if it was good was "Well I mean, I did watch it to the end, but i wouldn't call it good". Personally I didn't care for it. It was a huge and expensive stunt by Netflix to show that they could game viewer numbers for a one-shot thing. And I get that this is an important thing for them to do, but it's in no way sustainable or valuable either to them or their viewers.
If they did more stunts like bird-box throughout the year, most would quickly start to completely ignore them with an attitude of "Oh sure I head about X, and it's "blowing up on facebook" but that's always the case with Netflix focus pieces, they aren't worth watching though."
edit: typo.
Perhaps if I wasn't already a subscriber and the social media hype led me to subscribe I would be disappointed, but for an existing subscriber? I'll keep my auto-renew going.
It's like you're a mirror of myself:
Price going up? mmm... I don't know if I want to pay that...
Wait...
What? Decent new content?
Well, guess I won't unsubscribe. Still cheaper than cable!!!
If you were a director, would you sign with netflix after seeing those view numbers? If this helps Netflix get high quality creative talent then I think that is a value to the subscribers.
Logging in with a friends credentials for a tv provider she cancelled over a year ago still worked, oddly enough.
Netflix has been way more attractive, even with the slight price hike. Hulu as well.
It shouldn't be a surprise that that original vision was somewhat lost when Comcast bought NBC/Universal and gained a huge stake in Hulu, but it's still a shame that we don't have more "powered by Hulu" apps per that original vision. I still don't understand why NBC/Universal's Seeso attempt wasn't "powered by Hulu" given how central NBC/Universal was as a Hulu content partner (nor why Hulu didn't just inherit the majority of Seeso content when they got bored with the experiment), and that's a large part of why I didn't bother with Seeso. I guess I'm still often angry at the CW for dropping Hulu support for their own app which is just full of technical papercuts that Hulu fixed a long time ago; I would mind the CW app less (even if it was still a separate app) if it was at least "powered by Hulu" and had some of the backend streaming tech improvements, UX improvements, and commercial volume smoothing tech that Hulu uses.
Disney+ supposedly is using backend tech/knowledge from ESPN+, so it won't be entirely from scratch, but with Disney now being majority owner of Hulu, again it seems a shame that it probably won't just be "powered by Hulu", and is likely yet another case where we'll see bugs and UX papercuts that the industry as a whole could have worked to fix together instead of each their own.
Netflix used to be a distributor. It paid content owners to license its back catalog which no longer had any value in primary channels, namely cinemas. It then charged users for access. In contrast, two-sided Facebook's user do not pay anything, but the advertisers pay for access to them. The relationship is roughly the reverse.
Netflix also do not have suppliers that build up the attractiveness of the platform to end users. Netflix paid for back catalogs. Amazon doesn't pay its merchants. Today, Netflix is both a distributor and a producer. This doesn't make Netflix twice as strong but introduces a number of dilemmas into the organization. In the same way that Disney would look to external distribution channels to maximize the return on its investment in content, Netflix now has the same incentives. Netflix has no suppliers in the sense of Amazon - it pays for all the productions on its platform. It supplies itself.
In fact, they could theoretically make more by having staggered releases where premium channels like cinema receives new titles first. Why? First, because a single ticket to the cinema costs more than a month's subscription to Netflix. Second, because the direct income from Bird Box is $0.
Certainly Bird Box has a positive effect on subscriptions but it can only be inferred. This is an enormous problem. How can you justify spending say $100 on a production which could directly generate $700M at the box office, and then just release it to a limited audience? There are going to be numerous internal battles over this. I bet we'll see Netflix go for wide cinematic release of some titles.
Another issue is capital. Not only does Netflix has to produce content from which there is no direct return. They also have to market it. A $100M production may receive half or the same amount of spend on marketing. They have to build IP that is as relevant as Marvel. In summary, the challenges Netflix has is contradictory incentives between distribution and production, mastering the art of production and building of IP, and spending on marketing new productions.
Most streaming is via Hulu (commercial free) or Prime in our house nowadays.
I don’t have children, but I could see how having the Disney catalog would be enticing to parents of young children.
Also, strange the article did not mention Fortnight, by name, as a competitor.
And that's the whole classic catalogue - when you bear in mind that kids will happily watch the same old Frozen DVD over and over again, I don't see it as a huge compelling offering. Even adding all of Marvel, I still believe people will prefer to pick and choose their favourite individual media over an expensive subscription.
It's the continuous flow of new and unique TV/movies that is really working for Netflix. Disney just don't output anywhere near the same content hours to make a subscription worthwhile, and kids probably wouldn't care even if they did.
I'm probably underestimating some of the Disney kids TV shows that I've never heard of, but are they even on Netflix right now? Isn't Disney just going to cannibalise their own existing TV market?
So it really becomes a question of whether people are buying Netflix just for their kids content and will cancel one for t'other if Disney pull all their content, or whether they're happy to buy both.
If they only want to buy one, then maybe they'll switch.
If they're happy with both, then it actually helps Netflix bottom line as they no longer have to license expensive movies from Disney.
It's a balancing equation between whether the people they lose outweigh the licensing costs for Disney. Which is exactly the same situation they've always been in anyway competing with traditional cable offerings.
I see a challenge, but not a considerable Netflix killer like some people try to make out.
It's painful, really, I just want the Mickey mouse clubhouse in Italian and am unable to obtain it legally.
The day an international Disney streaming service appears I'm guaranteed to sign up.
Netflix should be very, very worried about Disney's streaming ambitions.
Marvel, Lucasfilm, etc. I'm still not seeing it. Two or three movies a year that I can pick up on DVD/Bluray cheaper. And that's if they're even worth buying on DVD after having watched them once in the cinema. Marvel movies have been wearing fairly thin, and Star Wars is showing similar fatigue.
I'm not saying they won't have a big market, Disney are huge afterall. I'm just saying that I really don't see them as strictly a direct Netflix killing competitor. They're in a slightly different game, content-wise, and Disney's biggest enemy will be itself.
Outside of your bubble, Infinity War is the highest-grossing film of all time. (With Black Panther following in 2nd or 3rd place if I'm not mistaken.)
Sure, Marvel does not particularly contribute to the pantheon of cinema, but it's nowhere near "wearing thin" commercially. Quite the contrary actually.
There’s so much room in the entertainment market for them to save customers $50/mo, offer them more, and increase their revenue.
Also I doubt they can keep it up, soon they and Amazon will go through all the culture written down and then what?
We'll see.
In that light they are already a little too expensive for the value to me for a yearlong subscription. Instead I’ll subscribe for a few months and then cancel when I realize I’ve been paying without watching anything for weeks.
That's impossible. 3/4 or more of their total customer base for the future is outside of the US. The economic middle 50% and the top 50% of people in Brazil, Indonesia, India, Turkey, Vietnam, Thailand, China, Nigeria, Mexico, Colombia, Russia, Bangladesh, Philippines, Ethiopia, and about 140 other countries - can't and will not pay an average of $35-$40 / month (or say ~$25-$30 if we're assuming an average lifted by higher prices in affluent nations; that requires eg the US market to pay far higher prices beyond $35-$40). Not under any circumstances will any of that happen.
Netflix will be able to raise prices in the non-rich markets (ie most of their customer base of the future) only as economic growth allows for it, both at the global and local levels. Customers in Brazil aren't going to suddenly be able to jump from $5 / month to $25 in the next ten years, no matter how much good content Netflix puts up.
Western European customers, who could largely technically afford $35-$40 per month, will never accept those prices.
Netflix is pushing near the edge of what people will pay right now globally. They can maybe raise prices in the US another 25% over several years before hitting the ceiling in their most lucrative market. The US market represents a rough approximation of their maximum pricing power. There's no scenario where they retain their customer base in the US and charge $35-$40 (unless we're talking about 50 more years of inflation).
There's a line though, where it moves on over into the high-enough-to-notice expense category, where people will be much more inclined to cancel if they're not using it significantly. If Netflix had cost me $20 or more a month, I would have cancelled it long ago, and only subscribe for a month a year to binge.
I'm betting Netflix want to stay in that first category for as long as they can.
Netflix is global, so at some level their product and pricing has to reflect what the "lower middle class" in Turkey, China, and Brazil can bear. We know that cable providers have succeeded in getting more for less in this market, so Netflix could profitably charge more for more in some regions.
I would guess that divide can't be reconciled, but by launching another layer of content/service at a higher price-per-month could let them maximize revenue. Netflix+ or something, paired to exploit some newer technology that isn't central to other services...
I'm currently subscribed to DAZN, a european live sports streaming service that covers all kinds of international sports and leagues and for 10 € monthly the available content is stunning. Having that content on Netflix would be very welcome, particularly due to their better streaming technology which is very important when it comes to live streaming.
That is, until they stop choosing Netflixt.
I cancelled my Netflix account a week ago after finally realizing what a huge time suck it has become in my life. I know I'm just one data point but I'm pretty sure others will come to that conclusion eventually.
people come to that conclusion all the time. It's not new, and not something unique to Netflix. I don't see any reason why people would stop watching Netflix at higher rates than they have stopped watching any other TV format in the past 50 years. People like watching TV.
Ultimately it depends on what you want to spend your time on, but I'd argue most want some form of entertainment, and Netflix fills that role for a lot of people.
It's reasonable to describe a service full of perceived low quality content as a time suck in ways that one might not consider watching better content.
The former also takes two orders of magnitude less space, time to prepare, time to eat and time to clean. :). Also tastes better.
Personally, I interpret "time suck" as something that sucks time in, i.e. you may have "allocated" X hours for entertainment this week (but who truly allocates this?), but with Netflix, you find yourself spending 2 * X this week, an increase from 1.5 * X the last week.
Seriously? I'd take a good steak over potato chips every single time.
Well sure, and throwing on Netflix take less time and mental energy than playing music, reading something challenging, working out, or any of a million other things that most people would personally say is a more productive use of leisure time. This seems in accordance with my metaphor.
I think you may have assumed an indictment of eating junk food from my comment, while there was none. I eat it myself occasionally without any (or at least many) qualms. But it's something that you'd ideally minimize, in the same way that one would for things considered a time suck.
> Personally, I interpret "time suck" as something that sucks time in, i.e. you may have "allocated" X hours for entertainment this week (but who truly allocates this?), but with Netflix, you find yourself spending 2 * X this week, an increase from 1.5 * X the last week.
Hm, I get where you're coming from, but I don't think I'd exclude something that takes a constant, large amount of time from the category. I also am not sure I'd include things that I find fulfilling, like working out or reading, even if their time commitments surprised me upwards.
(fwiw, junk food only tastes better if you're used to it: I find healthy food way, way more palatable, with the only exception being when I'm drunk or high).
I see a flaw in a lot of subscription models in that they lead to companies optimizing for "engagement" rather than maximizing the value of my time as a consumer. In theory this seems like it shouldn't be fundamental to a subscription model in that Netflix's costs could be lower if they offered me less but higher quality content but in practice it doesn't seem to work out that way.
Netflix might be right that if people choose to watch TV they'll choose Netflix. I chose not to watch TV any more rather than switching to another provider.
This is really interesting. I suppose the question is how do you measure value delivered?
Typically people show that they value something by paying for it. Normally you pay for goods with money, but many subscription services and F2P games are happy for you to pay with time. I feel like using "time paid" is a valid proxy for how much value customers get from the service. What doesn't make sense to me is why it appears that so many people value their (free) time so lowly.
Perhaps if Netflix offered a second PPV service its recommendation engine would have different incentives. With that model you also have payment friction and discovery friction. But honestly I'm not sure why they don't do it -- Amazon has been for a while.
From the company's point of view this might look like a positive trend in engagement followed by a sudden hard to explain complete drop off.
Yeah, that's been my experience with Netflix every time I've tried restarting a membership.
I don't think Disney's streaming service is out to compete with Netflix directly, to me it's more of a play to leverage the Disney brand and ensure they still have a 1:1 relationship with the consumer. Look at it this way, dozens of journalistic outfits have gone by the wayside in the era of Facebook and Google, but the New York Times and Wall Street Journal are not trying to compete by being aggregator platforms like Facebook and Google, instead they are leveraging and monetizing their goodwill and reputation by putting up paywalls, I see Disney doing the same for their content. Also, Disney (smartly) is going to hedge their bets and continue to put new original content on ABC, ABC Family, movie chains, etc. They are not playing the same game as Netflix. The same can be said for Hulu, yes Hulu has more original content -- but at the end of the day Hulu is mainly a channel for the traditional networks to get their hit shows on a streaming platform ASAP from original air date.
As long as Netflix keeps their debt under control, they will continue to grow and have a lot of room to keep raising their prices. Netflix is still drastically cheaper than the cheapest cable bundle, even if you combined a Netflix subscription with Amazon, HBO, Hulu, etc.
I think the more likely scenario is Hulu goes away and we're left with Amazon, Disney/ESPN and Netflix. And HBO, of course.
I doubt it. Comcast/NBCU, AT&T/Time Warner, and Disney all have good (and in some cases superior) content and their own distribution paths in place or in the works.