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Comment by tracerbulletx | Hacker News Reader

Everyone wants to come up with complicated reasons Netflix is in trouble, when it's basically 99.99% that they had a defacto monopoly and everyone was ok licensing them all of their IP for a while so literally every single show and movie was there, and now in the last few years all of the content producing companies have caught up to parity and pulled their huge content libraries. Their originals are perfectly competitive with other similarly sized studios, but it's never going to be anywhere near enough to have the power they had up until now. They were TV, now they're a channel.

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I'd suspect that one side factor was that the tech moat wasn't anywhere near as deep as you'd expect.

People used to be very impressed by Netflix's infrastructure-- CDN boxes in major ISP sites, all the reliability engineering gimmicks. There was probably a case to be made that "IP first" companies wouldn't want to bet that big on trying to be tech firms.

There was also a secondary risk factor, especially at your B-tier IP firms. Disney owns everything and can presumably fill a viable streaming catalog, but if your catalog is a bunch of old sitcoms and movies-of-the-week that your acquired before people were savvy about rights negbotiation, that doesn't command $10 per month. On the other hand, it would do well with an established service, plumping its long tail offerings. I suppose that was the original premise of Hulu, collecting some of the catalogs that weren't big enough to self-sustain.

The tech moat can only be so deep. IMO Netflix has two main issues:

1. Content is expensive to make and they are not the only game in town making quality stuff anymore.

2. Tons of their old back catalog was licenced stuff that the rights-holders have decided to take back & use for their own back catalogs.

Netflix was great when it was the only game in town. But competition is fierce between Disney needing to pay $0 to licence SW, Marvel, Disney stuff and Apple with insanely-deep pockets. Both can take on losses for YEARS before turning a profit on streaming. Let's not forget that Apple didn't even charge for ATV+ in its first 18-months in existence.

Beautifully concluded.

NF might be being punished for nkt having envisaged this.

I mean, their core business is content, and they know the mightbof the likes of Disney and HBO.

I think they did envisage it---thus the urgency at developing their own content.

Hard to compete right away with a century of Disney content etc. But, give it a few decades, and things might look better in hindsight.

That's literally all it is.

netflix used to be a bit like youtube. A platform where content creators (e.g. the big movie and TV studios) would distribute their content (first on DVD, later on streaming).

netflix today is a content creator hosting it's own content. Similar to HBO or Disney or Paramount or whoever else.

Different business altogether really that can hardly even be compared.

I'm deep believer in fat long tail of content. That is you also need sufficient availability of the content people rarely, but consistently look for be it older movies or tv shows. Then again I haven't looked recently at local netflix, but I guess it isn't very good.

That last sentence sums it up perfectly! Netflix never had real competition. Then Apple and Disney got in the game and put their billions into it. The rest is history.

Netflix still has good shows. ST4 was amazing. But the quality elsewhere is on par, if not better.

Just don't discount their huge advantage in streaming market share and subscriber counts that still exists, and don't pretend like they don't have a wide variety of content available.

I point out some of my beefs with the bearishness on Netflix in another comment on this thread.

https://www.cordcuttersnews.com/report-hbo-max-overtakes-dis...

That's not subscriber data, that's JustWatch "measured interest in SVOD services" data—in other words, people that use JustWatch tend to use more Netflix. Well, no shit, because people go to HBO and Disney+ for memorable shows and franchises that they don't need to look up on JustWatch. Netflix has Stranger Things and then falls off very fast. If you put their production investment up against Disney+ and HBO it would not look good (I haven't looked at the numbers, but I spent 10 years as a founder in the streaming industry and I feel confident making that wild guess).

Here's a more reasonable comparison (not fully apples to apples) that shows Disney + having passed Netflix: https://deadline.com/2022/08/disney-just-passed-netflix-in-t...

Disney+ launched less than 3 years ago. They are also a pretty bad employer by tech standards, but they've proven content is king, and Disney, HBO and a host of others are much better producers than Netflix. With the stock price down, and the lack of warchest that diversified companies like Disney, Amazon and even Hulu have, Netflix is in a rough spot.

I think the idea that Netflix would ever remain the largest service was always unrealistic, so when people see that Netflix is losing market share they seem to be really bearish on Netflix's business decisions, content, and long-term survival. In reality, Netflix losing market share was always going to happen with complete inevitability no matter how well they performed.

Netflix is a really solid place for content and will remain one of the top players in the market for a long time.

The market has rapidly grown and there is plenty of revenue to go around. Anyone predicting Netflix's eventual downfall or that their business is in serious peril is dramatizing the situation.

Yes, of course Disney has more subscribers across their three services. They are a gigantic conglomerate company and easily the most successful in their industry. Being "not Disney" doesn't put you in a "rough spot," that just makes you "every other company."

> Netflix has Stranger Things and then falls off very fast.

Hard, hard disagree. I hear tons of of discussion around recent shows like Squid Game, Bridgerton, Selling Sunset, The Witcher, and Money Heist. Saying that Netflix only has Stranger Things is kind of like saying Nintendo only has Mario. Netflix also still has the viral hype marketing strategy perfected.

Finally, a note about Prime Video: it's nowhere near as popular as Netflix when you look at streaming minutes [1] and their subscriber numbers are muddled with people who are subscribed because they want overnight shipping and Amazon Fresh/Whole Foods deliveries.

In my view, if Amazon gained more of a serious online shopping competitor (e.g., let's say Walmart started taking major market share from Amazon), their subscriber base would erode. I don't think Prime Video makes the kind of profit margin that its competitors do: it's there to help the no-margins logistics juggernaut stay in the black by giving subscribers an extra little nudge not to cancel.

[1] https://www.benzinga.com/general/entertainment/22/06/2777173...

> Hard, hard disagree. I hear tons of of discussion around recent shows like Squid Game, Bridgerton, Selling Sunset, The Witcher, and Money Heist. Saying that Netflix only has Stranger Things is kind of like saying Nintendo only has Mario. Netflix also still has the viral hype marketing strategy perfected.

Sure they put out some good stuff, but those are neither money printing franchises like Star Wars, Marvel, or Pixar, nor are they critical darling genre defining series like The Sopranos, Game of Thrones or The Wire.

For all the money they've spent on original content, they're just not in the same league as the big boys. They are data-driven / engineering-driven, which leads to kneecapping anything too creative (eg. The OA, Tuca & Bertie), and sanding off all the rough edges (https://www.vice.com/en/article/ake3j5/why-does-everything-o...). And their UX? The algo-driven engagement designed to hide the weakness of their library. This works until it doesn't, and frankly I've long since stopped browsing Netflix. I only watch something there once I've already determined it's on Netflix.

> I don't think Prime Video makes the kind of profit margin that its competitors do: it's there to help the no-margins logistics juggernaut stay in the black by giving subscribers an extra little nudge not to cancel.

Yes, this is absolutely true, and this is why Netflix is in a particularly difficult situation. How are they supposed to compete with a loss-leader for a business the size of Amazon Prime?

I think author is somewhat correct. You are going to keep me around in a couple of ways:

- Stuff I like enough to watch 20 seasons of. - New original content (that doesn't keep getting cancelled) - Good old nostalgia and world building eg Star Wars, Marvel, GoT.

Netflix doesn't really have any of these or it's inconsistent. And even the good original shows tend to have logical endings.

Personally I like the resurrected 80s cartoons Voltron, He-Man. I'd start my subscription again for season 2 of the 2011 Thundercats reboot and reboots of all the other 80s and 90s cartoons.

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