Netflix and the Future of Television
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That said, even sports apps are starting to show up on Apple TV and the like - it's just that right now, sports are attached to cable deals, much like HBO Go is attached to cable networks.
I feel like the "a la carte" unbundling discussion is almost moot. It was an important idea before, paying for just the channels you want. But now each channel can have it's own streaming app, and I can pay for and stream them whenever.
So now I guess it's just a matter of time before someone offers bundled groups of on-demand app access. Netflix + NFL Network + ABC/CBS + HBO Go... And toss in Comedy Central for good measure. Add in a $99 Apple TV, and who needs Comcast and Time Warner?
Oh right. They own the Internet access. I'd really like some net neutrality soon, please.
There's no technical reason why non-electronic sports couldn't also be streamed like this.
The other thing is it would mean they would have to build a billing and customer service infrastructure. At present they only really have a handful of customers [1] - the cable companies - so it's really easy for them to deal with that side of things. When you have 300 million subscribers, one of the biggest problems will be billing and customer service, so prices would further increase because of that.
I would love to see sport leagues do this. But things need to change somewhat before there will be any major incentive for it to happen.
[0]: Every league, team, sport is different, probably with different contracts with every cable company. The average wouldn't be useful at all because you would have more extreme data points than you would average data points.
[1]: Sure, some networks have online streaming options, but the kind of customer who has no problem paying the extra few hundred dollars a year for access are not the ones that will require the major customer support.
An ungodly amount. TV deals are everything to (at least American) pro sports. Smart athletes structure their deals to end the same time as the TV deals knowing that it will increase their potential salaries when the new deals are signed.
> and just get subscription fees directly from viewers and ad revenue directly from advertisers?
Because running a TV (or non-TV) network that has the reach and success of the big 4 networks is very fucking hard. You don't cut out the middle-man until you can replace what they give you.
While a large majority of the fans have broadband, they don't necessarily have something connected to the TV that will output the NFL streaming apps to their living room. There's also no proof that advertisers would pay the same rates for ads than they do for over the air TV.
Handing out the rights to TV stations also has all kinds of other advantages. You don't have to pay the TV stations to advertise the games. There is all kinds of content in said stations that could also be considered advertising: A team will be covered more in the channel that also carries the games than in one that does not. If you have an NFL app as the way to show the games, now you are the one paying the TV stations so that they cover your stuff. The NFL might get a bigger share of the pie, but other people are a whole lot less interested in helping the NFL grow its fan base. And yeah, the moment you start offering all games online bypassing live broadcasts, without at least a modicum of an attempt of blacking out regular TV broadcasts, the networks will balk at you, so if a pro sports league wants to move to online, they have to either only show content that the local TV stations do not want, or go all in, because the TV networks are not going to be happy competing with the league directly with the same content.
Good luck keeping an attempted switch secret too: To move broadcasts inhouse, a league would either have to purchase new equipment and crews, from the engineers at the stadium to the commentators, or to downright poach them, neither of which is easy to do.
So even if it's theoretically possible they'd make more money online, the risks and the political costs of doing such things are tough. We've seen how a player strike harms a sport's financials. A failed move online would be just as big, if not worse, and completely self inflicted.
of course, content wins so the interface is bottom priority. But without an API, there is no way for a 3rd party to provide a better layer over the content.
An open API so that pretty much anyone could subscribe to X channels and mash them together in an app or program to do whatever they wanted. Truly a la carte, like downloading books and being able to pick your eReader or library software.
It's unlikely things will change for them just because they move away from a cable box to apps. In essence that is what they are already doing. Even today you need a cable subscription to access at least a third of the content on Apple TV.
So, I suspect long term we are going to see a push for more 'timeless' entertainment. You might only get 100k viewers this year, but if your still pulling 50+k viewers in 20 years that's a lot of revenue over time. Make a great cooking show and it's still worth watching even if it's 20 years old, a travel log of eating establishments ages poorly.
Comcast, for all their flaws, do seem to really care about innovation. I watched a video about the development of Xfinity X2, and their R&D department looks like it has insane resources.
It's a very interesting space to be in, on all sides.
Who really wants "innovation" from their cable provider? Certainly not the unsatisfied customers that are leaving in droves.
It's a huge, profitable, conflict of interest to have your content provider also be the internet signal provider to your home, and I don't see them wanting to innovate that away. If anything, their R&D is probably in figuring out how to box out movie studios and other content providers like Netflix/Amazon Prime to make their own offerings more attractive.
I worked for Comcast circa 2003, and it was the company's official policy that its broadband services were for "entertainment only", to skirt around regulatory issues and downtime liability. While it was a dubious claim even then, it's farcical to call broadband internet anything but a utility in 2014.
If you have a strong, legally enforced monopoly, I'm not seeing this.
Is walmart really less profitable than mom -n- pop main street? If they aren't, why did mom -n- pop main street all go out of business when walmart moved in? The future seems to be big dumb profitable pipes and much less profitable content sources.
Additionally, offering different tiers and mixes of products allows business to create more opportunities for profit margin, but simplifying their business to just X amount of download bandwidth and Y amount of upload bandwidth for a flat price will remove their ability to obfuscate the value of what people buy. And they will have to work harder to justify increasing prices, whereas now, they can just blame it on the media companies, etc.
Have you actually talked to walmart employees?
Go to an upscale A/V audiophile class store and talk to a salesperson for awhile. They'll be a lot of green ink on CDs and thousand dollar speaker cable talk, but they'll also know at least some analog EE stuff, maybe not much, but more than their average customers. The sales guy almost certainly understands the features and UI and can teach you if you ask or put on a rather impressive demonstration and describe at length how to connect components together (with the hope of addon sales obviously). That is not a dumb pipe.
Then go to walmart and ask any drone about that surround sound amp on the shelf. Good luck getting more than "I donno man, all I do is match up the UPC on the box with the UPC on the price tag" Now that, is a dumb pipe.
We can do this all day with house paint, furniture, board games, firearms, camp gear, movies, video games, clothes, I think the only things where they're keeping up with the competition is the pharmacy, which is solely due to legal licensing stuff, and food, where the standard supermarket drone (I was one in high school) knows absolutely nothing about food or cooking.
Another fun analogy in the famous HN car analogy theme, is a non-dumb pipe car dealership would have salespeople who can answer any FAQ or weird question about a car. Oh thats how you pair your bluetooth phone to the radio. The spark plugs need changing every 50K miles. It runs just fine on 87 octane gas although the more expensive stuff will burn just as well. A dumb pipe of a car dealership would be you walk up to a car on the lot, flag down an employee, ask them if the car has four wheels, and they're all "I donno man, I just park them in the correct spot as fast as I can and thats all I know about them."
Also, a pipe doesn't care what travels through it; does Wal-Mart sell every retail product in existence?
None of the employees you'll ever interact with, with the possible exception of the pharmacist and optician, will know anything at all about the boxes they put on the shelves. Thats a dumb pipe.
None of the consumers know or care about how smart the HVAC thermostat is, or how JIT the truck drivers drop off the next pallet of kitty litter 3 hours before the store runs out of stock.
Its not an applied technology question. Pipe manufacturing can be fairly technologically advanced, perhaps for aerospace work or car brake systems. Xray inspection of welds and fittings, seamless exotic metal alloys. Highly trained and experienced installers and quality assurance teams. Advanced 3-d cad to bend and place the pipe just so. None the less, its still fundamentally just a dumb pipe, stuff pours in one end of the pipe, then it comes out the other end of the pipe.
So why isn't it prohibited on the antitrust grounds? Or they can't be sustainable as separate companies?
See https://www.gog.com/forum/general/introducing_gogcom_drmfree...
As soon as rights-holders can be convinced that DRM is unnecessary, then we'll see the internet streamers like Netflix drop it. I'd bet that by the time we see A-List movies on GOG, we'll be seeing them on Netflix too.
Where is their own content DRM-free?
> As soon as rights-holders can be convinced that DRM is unnecessary, then we'll see the internet streamers like Netflix drop it.
Without someone pushing for it, it will never happen. Netflix clearly don't care to push for it in the least. So kudos to GOG for actually trying.
What does Netflix gain at this point for instrumenting DRM free streaming for a small subset of their content rather than just piggybacking off their current infrastructure? Why add even more to the cost of in-house content for DRM?
> Without someone pushing for it, it will never happen.
That someone is consumers, not Netflix. And given that the overwhelming majority of consumers don't care about DRM, Netflix has little incentive to care about it also - they have enough to worry about with their content well drying up, and I doubt they are keen on exacerbating that problem by telling their partners to license their content DRM free. Short of either the government stepping in and mandating the end of DRM, I don't think will ever see DRM go away (not to say it won't be hopelessly broken).
All that still doesn't change the fact if Netflix could, they would most likely drop DRM, if not for all the technical reasons - it would allow them to distribute on Linux and most likely simplify parts of the content delivery chain. For Netflix they have no reason to be against DRM free content, but a ton of reasons to not be actively against DRM.
They gain more trust by showing that it's not their intention to use DRM. Since they don't, they are viewed as liars when they claim that they don't want to use it. And they very well can be liars. Let them prove their intentions with actions rather than with empty words.
> That someone is consumers, not Netflix.
No, that's false logic. Users of course should push for it too. But you can't compare the scale. Individuals voting with their wallets are less visible to publishers than distributors voting with theirs. GOG already demonstrated it. And that actually feeds the cycle. Once some distributor breaks the wall of stupidity by making some DRM-free deals with publishers, then more users start supporting them from those who care about buying it DRM-free.
The bottom line, Neflix are not interesting in fighting that fight. They oblige insane publishers willingly and their claims that they "have no choice" don't sound sincere.
> Netflix has little incentive to care about it also
That's exactly the point. So they can't claim that they don't like it. In the best case they don't care, and in the worst they prefer using it even for their own content and push for that garbage into HTML standard. Incentive for caring about it should not come from estimating how many users care about it.
> ll that still doesn't change the fact if Netflix could, they would most likely drop DRM, if not for all the technical reasons
That's what they say, but no one is inclined to believe them when they don't do it for their own content as above. There is no technical reason for them to use DRM where publishers don't demand it. And when they are the publishers themselves it means they demand it themselves too.
Because there is no good reason to use DRM. Ever.
> But for streaming video I'm merely renting.
You mix up the concept of streaming with renting. A common mistake that for some reason a lot of people make.
Streaming is simply a convenience. An ability to watch something from the cloud without downloading it first. Who said it has to be equal to renting? You can perfectly buy something and have it stored in the cloud to stream it while being able to save it for local backup at the same time. That's exactly what GOG offer for their DRM-free video.
Now with streaming misunderstanding out of the way let's take a look at renting. First of all using DRM for renting is pointless. If it's intended to prevent potential abuse of renting terms, then it's worthless same way it's worthless to prevent any piracy in general since those who want can access all the same content through piracy sources at any time. So any kind of enforcement of renting with DRM is futile and only reduces usability of the product for nothing.
Now let's also review the concept of renting itself. It doesn't really make any sense for digital goods in general. For physical merchandise renting allows reusability, which allows in term using lower price for renting in comparison with selling since there is no repeated cost of production. For digital goods this problem is non existent because cost of reproduction is practically non existent (digital copying). So there is no good reason to make the price of selling any higher than the price of renting. Or in other words, the whole concept of renting is nonsensical for digital goods. It wouldn't hurt to always allow the user to back up their data if they want to (i.e. complete purchase, not a rent).
Now with renting out of the way let's take a look at Netflix. Essentially their novelty is not in the renting aspect, but in an interesting way of organizing the service. Instead of selling film per price, they give access to anything for a monthly fee. This can perfectly be done without falling into renting approach (which can push one to entertain the thought of DRM which is nonsensical anyway as above). Some say, that if you remove DRM from Netflix what would stop users from downloading the whole catalog within the monthly period? The answer to that is that DRM is still not needed, Netflix should just make terms of usage more realistic and use other, non DRM methods to prevent such abuse. I.e. instead of saying "watch what you want in any amount by paying N money a month" they can say "watch / download up to M films by paying N money a month. If you want more - pay extra". That would keep basically similar approach but would prevent potential "download it all" abuse, while at the same time remain DRM-free. And there is no need to turn it into renting. I.e. those M films can be made perfectly downloadable and backupable. Since the main expense for Netflix is the streaming (it eats bandwidth / server activity resources), letting users back video up is perfectly fine - it will only reduce costs by reducing load if users will decide to watch their local backups next time.
The bottom line, Netflix can offer a DRM-free streaming service which allows downloads at the same time and uses their approach of "watch what you want for a monthly fee" except with an addition of "not more than M videos per month. If you want more - pay an additional fee".
Netflix main expense is not bandwidth it is content.
But yes, if netflix started selling tv shows and movies like you suggest, drm free would be something consumers should demand.
It is now. My point is that there is no reason for it to be a rental service. I explained above why.
> If you are paying a recurring fee, and you only have access to the product as long as you pay the fee you are renting.
Did you read what I wrote above? Even if you pay a recurring monthly fee, there is no reason to make it a rent rather than a purchase of up to any M titles of your choice per month for that very monthly fee. Rental is nonsense for digital goods.
Copyright recently has killed a few venues online where I was paying to watch their content. I'd still pay them directly for an Aereo service if they provided it. I will never pay for Cable TV again .. bloated, over priced junk in which you have to deal with horrible customer service! No thanks!
I do see Dish is coming out with an over the top cable like service. It's sure to hobbled at first, but maybe in the long term it will provide a solid experience.
After all if Netflix must raise rates to cover these new costs it seems it would be in their best interests to educate their customers in hopes of driving lobbying efforts to force common carrier legislation on ISPs.
For example, Netflix UK has the first 2 Hobbit movies, Pixar's Up, the original Danish versions of The Killing and The Bridge, all of Stargate SG-1/Atlantis, 24 and The Shield - none of which are currently available in the US. There's a load more I can't remember off the top of my head. The UK also got Breaking Bad a few hours after it was aired in the US, whereas US customers had to wait several months, presumably due to an exclusivity deal with AMC.
Obviously the UK also gets all the Netflix original content. Occasionally a new season will launch a few months ahead in the US, but that's not really a big deal. I can only assume this is done for same marketing reasons that blockbuster movie launches are typically staggered worldwide.
There are a small number of US shows like 30 Rock and Better Off Ted that I wish were on the UK service, and Star Trek DS9 is conspicuously absent, but that list is much smaller than it was 2 years ago.
It isn't too difficult to access the US version of Netflix, but doing so reliably requires a VPN connection which I am not willing to pay for. And it's technically equally illegal as the piratebay and more of a hassle to get it to work with my chromecast/plex/xmbc.
This is sadly a really old problem. Noone is currently selling film/TV-series content to a reasonable price that could even look at competing with the piratebay/piratism. Heck, todays services can't compete with piratism from ten years ago.
Another option: directors cut type content. So you get 2 minutes extra content of dubious quality, but there's a 10 second diet coke ad at the start. Well, you could try to find a torrent of the extra content without the ad, but its got slower seeds, so you're better off with the diet coke ad...
I'm not sure this would be true.
This may work for rarer content, but certainly wouldn't work for hot torrents. A fast webseeds CDN or whole datacenter of seedboxes is still on par with a large community-only swarm - that is, except for minor issues (possibly slower start) they both can well saturate one's downstream channel.
That is, unless one wants the download to start at full-speed right at the release second and not an hour or two later when swarm gets enough seeds. But I'm not sure most users care whenever their favorite series get an update at, say, 18:00 or 20:00.
[1] https://forum.ethereum.org/discussion/427/moviecoin-worldwid...