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Comment by darth_avocado | Hacker News Reader

> It’s Disney’s content

That is partly the problem. You spend hundreds of millions to make blockbuster movies and then release it on Disney+ in a few months for free (or sometimes directly). That costs money. Add to that over reliance on only Disney content creates two problems:

1. You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round.

2. You have to pay money to create content. Vs the ability to buy content for cheap or add it for a few months.

On top of that, Disney overseas also includes live sports in their packages which can get expensive.

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On top of the... 'opportunity cost' of not licensing out content that otherwise would have went to Netflix, ABC, whoever.

If previously Disney made Daredevil and 'sold' it to Netflix for $1m (hypothetically), but now you're holding that back to stream yourself, you've got to account for that missing $1m somehow.

No you don't. You don't normally include opportunity cost on your balance sheet.

yes and no. The problem is if last year they earned $1m from it by it being on Netflix. Moving it to their own streaming platform will look like a $1m less revenue.

Depending on how org and financials are structured Disney+ may need to purchase Daredevil from the other part of Disney for $1m, which is recognising that opportunity cost.

Not to be pedantic (ok a little bit), but you don't normally include any costs on your balance sheet, but you might want to include them on your income statement.

You don't, however Disney was making this money before as they were directly licensing it to these services, so it's not just opportunity cost, but actual lost revenue when compared to previous years.

These deals can be complex. Consider if you were going to make a movie, and were shopping it around to studios.

If Studio A was like "we'll give you a 10% cut of whatever we then license it for for streaming" and Disney was like "we're gonna stream it on our own platform for free, sorry" that's a negotiation problem for Disney. So selling internally at market rate is a good thing for relationships with external creators and partners.

It seems like it’d be infinitely more fair to say “should we stream it in house, here is how royalties will be calculated.”

That’s not entirely true. Disney+ is partially losing money because of “transfer payments”. Disney+ has to “pay” Disney studios the market rate for the right to stream a movie. Of course the money mostly flows up to Disney. But from an accounting standpoint, Disney+ can’t say it’s profitable by getting movies for free from Disney studios and cause Disney studios to lose potential profits they could have made elsewhere.

There are also revenue share agreements that are involved with actors. That are still taken into accounts

> You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round

That’s not strictly true either for kids content. You can keep recycling content to kids for years and kids will rewatch the same thing.

Disney has been making money off the same animated content for over half a century. To a first approximation, no one cares about Netflix’s back catalog.

Octonauts would like to have a word

sound the Octo-Alert!

Ok, totally off topic, but am I the only one that hears “Explore, Rescue, Rrotect” rather than “Protect” in the intro?

See here at 0:40ish: https://youtu.be/mR_Ui_3Iz2o

I also hear this, sounds very faint, a little bit clearer with headphones.

If I can go on another tangent I would just like to recommend Octonauts. It is charming, funny and clever show. My 5 year old daughter loves it and she would like to have a Tweak costume.

I can't stand many kid shows, but this one even I can love. It is incredible for me how Octonauts are not pretentious, like so many "science!" shows for kids are.

I would recommend it for children also. My kids have learned a decent amount from having watched it, unlike many other shows without any real educational content.

Wonderpets maybe also (not on Netflix right now, but it used to be). And TimmyTime. And Adventure Time.

Creature Report, Creature Report. Creature Report!

There’s no where else to say this, but for wholesome kids entertainment, Bluey is hard to beat. Every 10 minute episode is basically a guide on how to play. Kids love it. Parents relearn how to play. It’s so charming and ridiculous. Totally worth the money.

Fair warning there is a Bluey episode where the kids push their father down steps. A day after watching one of my wards pushed someone down the steps :/

I have some beef with how Bluey depicts the parents as stooges to be toyed with and manipulated as the kids see fit, with little pushback from the parents. In the end there's generally some kind of lesson to be learned, but the parents go along with pretty much anything the kids propose.

Is Bluey this generations’s Caillou?

Mild disrespect for authority is an Australian cultural trait.

> You can keep recycling content to kids for years and kids will rewatch the same thing.

Furthermore, kids will complain if they lose access to frozen etc so disney+ has an exit cost. Like the admiral said, it's a trap!

> That’s not strictly true either for kids content. You can keep recycling content to kids for years and kids will rewatch the same thing.

I'm looking at you Netflix and your lack of new seasons of Octonauts and Cat in the Hat :-)

> To a first approximation, no one cares about Netflix’s back catalog.

People would care more, if Netflix would stop cancelling everything. I'm not sure they realize how much they're killing their own backcatalog revenue by making everything a one/two season max.

A lot of it also, is just not that good.

And they keep pulling stuff down or putting stuff up. I don't need artificial scarcity, I want access, just as I want to listen to a song on Spotify when I really want to hear it without being told its no longer available with my subscription. I'm subscribing to the Disney library and most of the time half of it is unavailable.

Are they still doing “The Vault” over on Disney+?

>You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round.

I suspect that, in addition to ad-supported tiers, we'll see more annual subscriptions or at least subscriptions where annual is sufficiently cheaper on a monthly basis that it's essentially an offer a lot of people can't refuse.

along with maybe a broader return to serialization and longer seasons again - but this only really is valuable for shows that capture the zeitgeist, otherwise most people will just wait until the season ends and subscribe for a month to binge and move on.

> I suspect that, in addition to ad-supported tiers, we'll see more annual subscriptions or at least subscriptions where annual is sufficiently cheaper on a monthly basis that it's essentially an offer a lot of people can't refuse.

I think they're already experimenting with things like that. I signed up for an annual subscription when Disney+ launched (I knew my wife and kid would love it) and when it came time to renew they offered a "Disney Drop Box" as a reward for signing up for another year. The box was a themed selection of Disney merchandise that they claimed was valued at ~$150, which is probably a stretch, but my kid loved it.

Isn't this basically what amazon does via prime membership? Apples and oranges I guess because it isn't "just" streaming, but does anyone pay this monthly?

"1. You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round."

For our household, this is true of all streaming services. We rotate them, or subscribe for short stretches. For example, I got Paramount+ for a couple of months, watched all of the Star Trek content, and then cancelled. Amazon Prime is the exception (because free(-ish) shipping.)

I wonder to what extent the big streaming services are aware of this phenomenon and how they hope to mitigate it.

> I wonder to what extent the big streaming services are aware of this phenomenon and how they hope to mitigate it.

I suspect that not many people do this.

It it becomes a problem, they can always bring back the old weekly episode model.

Since I became a parent, waiting for weekly episodes to completely release and then subscribing has become immensely favorable since it turns out I can easily live without being a part of the internet discussion of whatever.

The services definitely know about this and to a large extent they build it into their model. Every subscription service has a churn model being accounted for.

The services also know that the only thing they can do about this is release enough new content to keep users engaged, or bundle the subscription with other ones.

Or rotate what parts of the library are available each month.

Or each day! And we are back to where we started.

Hear me out: what if we had like...an hour block where EVERYONE streamed one of the same 15-20 shows at the same time?

Obviously, we'd also need to have a few random catch-up blocks for older shows, maybe in the mid-afternoon. Perhaps we could even do it over the air wirelessly, with no ISPs involved.

https://en.m.wikipedia.org/wiki/Pluto_TV

Of all the competitors to Netflix, Pluto tv (owned by Paramount) is the most interesting.

Precisely because they built, and continue to optimize, their product around profit:user.

If they can get favorable licensing deals by broadcasting as linear programming... they do it.

If they can get good deals around on demand... they do it.

The end result seems to be that they have many more options to minimizing cost of licensing content, and therefore maximizing the amount of content they can offer a user, versus a pure-play on demand provider.

If Netflix added linear programming "channels", I'd buy their stock tomorrow.

Or offer discounted annual subs. Or partner with credit card companies for statement credits. Lots of ways to fight churn.

They don't even list all their old content. For example the old Donald duck cartoons, there seem to only be about 15 or so streaming. The rest are not available. Why?

I don't know about Donald Duck cartoons in particular, but I think a lot of those old cartoons are difficult to find because they contain content that the corporation fears might offend somebody. Racist (or arguably so) ethnic caricatures, extreme cartoon violence, that sort of thing.

For instance, the original version of Disney's The Three Little Pigs has the wolf disguising himself as a stereotypical Jewish merchant.

So, pay someone with good sensitivities to watch the cartoons and decide based on notes. How expensive can that be ?

Or, integrate a feedback system and take down complained-about cartoons quickly. That's probably better since sensitivities change and some perfectly fine items today might be off-limits tomorrow.

Doing nothing is not a great option, even if it's the easiest to implement.

> So, pay someone with good sensitivities to watch the cartoons and decide based on notes.

Maybe they did, and that's why the cartoons aren't available? If you have to cut X% of a show for content, maybe they make the call to cut the show entirely and pretend it doesn't exist, just so they don't have to answer awkward questions about why so much of the show is missing.

In sales there’s a concept where you don’t just sell against competitors, you sell against doing nothing.

What’s the convincing reason for Disney to not simply do nothing? Sell me on Disney digitizing and releasing old cartoons with the salary of at least one person versus doing absolutely nothing.

You also have to sell me on that employee working on the Donald Duck smoking cigars and speaking in a Mid-Atlantic accent archive project versus working on something else. Why is that employee not instead working on The Avengers Versus Guardians of the Galaxy 2: Hulk We Groot Again!”

The sell (though they seem to be avoiding this particular avenue) is that they have become the owners of a LOT of cultural cornerstones and can leverage that content to create something Netflix cannot:

A complete multi-generational back-catalog that is always available to stream.

Netflix’s irrevocable back-catalog can only go as far back as their first Netflix original. Everything else is licensed.

In a romantic sense the idea that a multi-generational back catalog being a profitable pursuit might feel right, but that doesn’t necessarily translate to a marketable product.

Netflix hasn’t needed much of a back catalog to out-earn the competition.

The truth is that back catalogs have the potential to be basically worthless except for a select few “best of the best” classics.

The majority of Disney back catalog content is most certainly not at the level of Snow White or Cinderella. I think about many of their package (anthology) films as a great example of near-unwatchable garbage that only has non-profit historical value.

Media companies quite literally let their back catalogs rot (like the neglect and disinvestment that led to the Universal masters fire of 20008).

While I think your points are valid, I also think that simply making “trusted archive” part of their brand is enough to justify the cost of employees watching through everything and tagging offensive content.

Old cartoons have been whittled down like this for decades. In 1999, Cartoon Network stopped airing anything with Speedy Gonzales because they decided he was an offensive ethnic stereotype. They ended up reversing course when they discovered that Hispanic audiences by and large liked the character.

I understand that fear and that is probably the reason, but why not just put a warning at the beginning and not post it on the kids profile?

Actually I’m personally ok with 1-2 really good series (e.g. Andor) a year. I think the yearly price tag is reasonable for that.

I have to admit though that the rest of the year is used up by the kids watching cartoons on D+

What I don't understand about the movie business is the cost of making them. The most important ingredient to the success of a movie is the plot. We've all seen low budget movies that made lots of money - because of the plot. Casablanca, Psycho, Blair Witch Project, Cloverfield, Primer, ...

Star Trek TOS was a very low budget affair, and produced excellent results, because they hired the best scifi writers. When they threw money at the Star Trek movies, they were all terrible.

It's the plot that matters. Nothing else.

The issue is making money. There are lots of low budget movies with good plots that don’t make money (or not a lot of it). While at the same time, they can make the 5th sequel to some shitty comic book video and almost guarantee a few hundred million in profits. Of course movies can tank, but generally they are not stupid and the accounts have it figured out.

If you're going to spent $100 million on a movie, why settle for a boring plot and pedestrian dialog?

I watched the La Brea show for a while. Lots of expensive special effects. But the dialog was just pablum. The characters each talked like they were the same person - using the same words and phrases. They behaved the same, too.

Because it makes money anyway and getting actually good people would cost more nd take longer.

I quit watching it, mainly because of the execrable dialog. When you want all the main characters to be eaten by a gru, something is wrong with the writing.

I expect the cost of a good writer is a pittance compared with the cost of the production.

Because bad/simple dialog is way easier for the over 50% of the modern box office that isn’t the US. CGI explosions don’t need to be dubbed/subtitles in 20 or 30 different languages

> The most important ingredient to the success of a movie is the plot.

Provably false by all the bad sequels which nonetheless made more money than the original¹. If plot were that crucial, movies would consist of a person sitting down reading a book, à la The Invention of Lying². Money matters to commercial success of a film above anything else.

¹ https://www.vox.com/2016/7/1/12070048/resurgence-independenc...

² https://en.wikipedia.org/wiki/The_Invention_of_Lying

The Invention of Lying makes me sad. I just showed it to someone last week[1]. Great premise, the first half is genuinely funny and then it throws out the whole vibe and turns in to a very cliché critique of religion.

[1] I actually only showed them the first part so we could walk away enjoying it

All substance and no style can work, as your examples prove. But it's also possible to find examples of successful movies which were all style, no substance. For instance the first Avatar (I haven't seen the recent sequel.)

Yeah, well, I saw the first Avatar, too. It was completely boring. Didn't bother with the sequel.

Tbh I agree, but it was certainly a commercial success.

nah, you can't tell me that the transformers movies have plot and they raked in the money!

In what universe was Casablanca low budget? Inflation adjusted it was over $30 million dollars.

Disney+ isn't free though...

I think the economics of it is basically like, Disney spends so much on creating content that Disney+ just doesn't bring in enough money to cover cost, because users get a subscription to binge / burn thru several things in a single month and then cancel their subscription.

> users get a subscription to binge / burn thru several things in a single month and then cancel their subscription

Surprisingly similar to the old days of bugging my parents for the Disney channel (of course, didn't have on-demand selection back then).

> You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round.

Didn't Disney's CEO talk about getting to the point of having a movie release a day or something like that late last year? The quality might be questionable at that rate.

In theories those movies should make most of their money back in the movies. Otherwise the finances don't work out.

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