I never understood the super high valuation of Netflix in the past. Sure, they had great CDN tech, and sometimes they had good content (in the US at least) but their business model was the most susceptible to disruption from all of the FAANGS since their tech would ultimately become a commodity and their content could be taken away, surpassed or both.
They had no vendor lock-in effect like Apple, Microsoft or Google and no social media network efect like Snapchat, Discord, Meta that would guarantee their customer base to stay long term on the platform. They also couldn't monetize their users' personal data through ads as much as the other chat apps and social networks. And it was only a matter of time before juggernauts with valuable IPs like Disney, Warner, etc. would build their own streaming services to disrupt them.
The moment their competitors with the desirable IP would jump in the ring, or their content was no longer addictive, or their customer base would feel economic hardship, or their VC money dried up, their service could be easily disposed of without a hit to quality of life to their users.
Also, people could pirate their content basically for free, so there's also that, versus the likes of Disney, Warner, etc had other revenue streams besides just a streaming service.
People hoped for and bet on an endgame similar to Spotify, which holds 33% of the market share for music streaming, followed by Apple and Amazon with ~12% each and no major shifts in the last years. Basically, a stagnant market that allows Netflix to pull in absurd amounts of money - and since there is almost no R&D costs on the tech side any more, all money that doesn't need to be paid out as royalties can be used to produce more content or distributed to the shareholders.
For a long time, the general idea worked out. The problem was that the studios did manage to get their butts off the ground eventually - especially Disney removing all their stuff from Netflix and creating Disney Plus with a lot of the most popular cinema franchises (Star Wars, MCU, Avatar, all the "classic" Disney and Pixar films) was a real setback - and now combined with the aftereffects of pandemic lockdowns and work-from-home movie distractions going away, Netflix' future does seem a bit bad.
Spotify makes sense because you're swapping out inefficient distribution (record stores & albums) to an efficient one.
Netflix doesn't have a similar advantage. Media companies produced shows and Cable companies distributed them just fine before. The advantage they had in technology and being able to buy cheap media has evaporated.
Their advantage of being able to burn money is now evaporating with it. They're left with trying to produce better media cheaper which they can't do because they're worse than legacy studios. Or distributing cheaper/better which they can do but there's not a 10+ billion dollar company there.
Worse for them Apple & Amazon still seem to be happy burning money for a while. Not a lot of bargains out there buying media.
Do you mean cable television? To me, Netflix is the same to cable television as Spotify is to radio, so I'm not sure I see a big benefit of Spotify there.
Netflix wasn't a cable competitor- it was a Blockbuster competitor. They started out as the king of the DVD rental market, putting essentially 100% of the competitors in that distribution-only industry out of business.
They eventually reached a scale in the streaming category (which they essentially invented from a business standpoint, even though they did not invent the technology) where it made sense for them to produce their own content, both because it was more economically efficient generally and to prevent studios from starving them of content and shutting off their revenues. Their move into producing some fraction of their own content matched that of both cable companies and TV studios before them.
Netflix's primary advantage, in both the DVD market and the early streaming market was 100% a radically disruptive distribution advantage. Eventually, in both cases, they became so dominant that they redefined their own industries. It's not that Netflix is a cable company, it's that cable were forced to become Netflix to stay alive and avoid the fate of Blockbuster and Netflix's original competitors.
>People hoped for and bet on an endgame similar to Spotify, which holds 33% of the market share for music streaming
Who said that Spotify is the endgame? That's like saying that MySpace is the endgame for social media or that 3Dfx is the end game for GPU tech. Few tech companies survive long term. AFAIK, unlike Netflix, Spotify don't own any of the IP they stream, they just license it from the major record companies, making them effectively just a middleman with commodity tech. So, in theory, if they wanted to, the major record companies who actually own the IP Spotify streams, could join forces and build their own streaming services, and stop licensing their IP to Spotify, effectively killing them over night. And let's not talk about the bad blood between Spotify and many artists who would love to see Spotify burn to the ground.
So, IMHO, in theory Spotify is even easier to kill than Netflix, but as to why that hasn't yet happened, that's up to the execs of the major record companies to answer. Maybe they decided it's easier and more convenient to just sit on their butts and license their IP to Spotify, Apple, Amazon, and have them outbid each outer for the licensing fees and collect rent from them, rather than bothering to assemble armies of picky and expensive SW devs to build their own competing services, since those dinosaur execs at the record companies aren't known to be very tach savvy, and in fact spent most of their lives fighting the tech industry in courts instead of investing in it.
Also, most importantly, music and video distribution and consumption are completely different beasts, so direct comparisons between Netflix and Spotify are pretty difficult even if all other things were to be equal.
Each of the big media companies hold maybe 25% of the "legacy" catalogue (75% of streams). And playlists are usually mixed, so switching app to listen to a few 15% of songs won't happen.
They simply don't have the market power at the moment.
IIRC a lot of the profits of the music industry these days comes from live gigs and merchandise sales, or at least it did prior to COVID slaughtering the whole industry for two years.
IMO it makes sense for the music industry to shift their focus and attention towards live events anyway - you can't steal or pirate tickets (and scalper profits are often enough rumored to originate at the artists themselves) and merchandise, and the effort not just in development but especially in brand recognition building against Spotify would be immense, not to mention the shitstorm/backlash potential from such a move or the antitrust risk.
Well, lot of music is available on all major platforms (Apple, Google, Amazon, Spotify) while most movies/series was almost always exclusive to platforms.
Why spend time and money building your own music platform when you can get paid to not do that 4 times? 4 players also solidifies content owner's position in the market because simple supply x demand.
And even if you are major label, who says that only your content is enough to pull enough subscribers. You might as well fail and destroy value of the product you are selling due to loss of consumer visibility and spots on charts.
Streaming video and making a (really pretty mediocre) browsing interface for it is an absolute commodity. Clearly most value is in the content.
What I'm surprised by is how long they were able to extract a large middle-man fee from studios and use that to fund a direct competitor to them. Took some chutzpah.
I think the advantage was in the convenience, not just in being a middle-man. When Netflix was the primary streaming platform, I could do a single search on Netflix. That if I wanted to look for Robin Hood (1973), Star Trek, The Matrix, 24, Glee, Doctor Who, John Wick, or Kill la Kill. Now, in order to find something that I want to watch, I would need to search for it on Disney+ (Robin Hood (1973)), Paramount+ (Star Trek), HBO Max (The Matrix/Doctor Who), Amazon Prime (24), Hulu (Glee), Peacock (John Wick), or Crunchyroll (Kill la Kill). Even if subscribing to all of the platforms were the same price, it would still mean that the convenience would be completely gone.
Fun fact: In 2019, the DoJ decided that it would stop enforcing the Paramount decrees, because there's no way studios could lock out independent distributors in today's environment. Clearly, no way whatsoever.
I didn't say being a middle man is worthless, by definition they provide value by making transactions more convenient. Netflix could have continued to focus on this actual advantage it had -- building its partners / clients (studios) to provide streaming services with a convenient single point with the customer and economies of size and scale. If they had charged a small price commensurate with the service being provided to studios, on reasonable terms, and had not attempted to fund a direct competitor to their clients, they quite probably could have continued being a great distribution service. But they didn't, they threw that away trying to fund a studio startup for some strange reason.
I guess at some point it looked like all content was just going to be sent to Netflix, like a giant modern Blockbuster. Every movie that was no longer in cinemas, every niche classic from times gone by.
It might have been a great business, if the owners of those movies had been happy to just get a small fee from Netflix.
Unfortunately that's not how it turned out, for instance Disney decided they could both make their own tech and their own content, esp for such things like Mandalorian which takes a modern long-story format that is suitable for streaming. Basically it turns out content is king, which Netflix also realized as they went and tried to make their own stuff with limited success.
What I don't get is why it's so hard to make the content. They've certainly thrown a lot of money at it, how come nothing sticks? By contrast everything Disney makes seems to be high quality.
Indeed, and if things had turned out that way I would've happily kept my subscription and paid for such content to watch it legally.
Instead they fragmented, and there is no way that I will be figuring out which of the dozen subscriptions I need any time I want to watch something, and I know I am not alone here.
Piracy is king once again. It has all the content, and none of the bullshit.
Mmm, I think Netflix made plenty of their own missteps in that department. They’re notorious for shutting down popular shows after a few seasons, for example. I’m sure they had numbers that convinced them that was the smart thing to do, but you do that enough times and people might wonder why it’s ever worth getting into your shows.
This kind of thing comes from company culture too. I can’t speak to specifics, but presumably Disney and other studios who have been at the content game a lot longer than Netflix have a better understanding of how to cater to their customers and foster that relationship over time.
Another way to put all this is simply that it’s a lot harder to build a content business than a CDN, especially now. So the existing content biz just built CDNs.
It crossed my mind that perhaps content is actually a relationship business. You need to have a bunch of connections with the creators that goes beyond just giving them money to make a show. There's some kind of negotiation between what the artists want to make and what Disney wants to sell that requires some sort of hard-to-put-your-finger-on experience to handle. But it's not my industry, so very hard for me to anything but speculate.
Indeed Netflix seems to rely too much on numbers and data to justify decisions, and to define what goes into their shows. And they ended up with a bunch of generic, disjointed, easily forgettable shows that get cut midway.
Netflix seems to be perfectly happy beating the corpse of House of Cards, Stranger Things, and Ozark for content. There's just a difference between popular and popular on the internet. Sense8 as an example was decidedly the latter.
Plus their excessive pushing of 'woke' crap turned normal people away. Who would have thought most people don't want coercive brainwashing but just entertainment ¯\_(ツ)_/¯
For some users like me. The value of Netflix would have been in the long-tail content. Collection and ease of access to enough of it. But if that is gone, is their own that much better than any other competitor? With their much longer tails?
The theory was one of economies of scale. For exclusive in-house content, you should have a positive feedback loop of "more users" -> "bigger content budget" -> "better or more content" -> "more users". And the theory was that with their headstart they could basically build such a large user base and content pipeline that nobody else could catch up.
It was a solid theory, and honestly it still isn't obvious that it's failed. Netflix still has an much larger user base than any of the competing services, despite charging much higher prices. But other than the stellar job they did with international content, they certainly haven't executed on this as well as people imagined. It's quite amazing how badly they have been spending that massive content budget, and how long the mismanagement has been going on.
(Their prestige "Hollywood movies at Hollywood budgets straight to streaming" projects are probably the most obvious example. Who the fuck greenlit Gray Man at $200M?)
When Netflix first started, it was an engineering challenge on the order of the Google search engine. High Availability was the newest thing and Big Data was just getting started. Now though, it is so easy you can use similar technology to host your cooking blog in AWS for $0.10/month. It's not terribly surprising that Disney+ was able to execute, probably for a bare fraction of what Netflix had to put in technically speaking.
Netflix was a brand. A household word for streaming, ingrained in popular culture. "Netflix and chill". They had absolutely no idea how to cultivate and protect that brand, and now they're giving up and selling ad space. It wasn't so long ago they were mocking Blockbuster for being out of touch, and now here we are.
> And it was only a matter of time before juggernauts with valuable IPs like Disney, Warner, etc. would build their own streaming services to disrupt them.
Where I'm at, Disney is already cruising.
Infact, all major production companies seem to have realised a while ago that they all can individually create their own streaming platform.
As a lay person, Netflix is just the victim of basic capitalism. You need to show endless growth no matter what the circumstances are. Fundamentally unsustainable.
I don’t care about Netflix, I was never a subscriber. But I wonder if this is really about Netflix or about the absurdity of the larger system.
Content creation is a hit making business. Video games, movies, tv shows, music, literature, etc. People are passionate and work in the industry because it’s a creative effort and you can make a lot of money. But as an investor you should value content businesses with low multipliers because it is difficult to repeat the success. This is also why sequels, formulaic stories, downloadable content, subscriptions, and all manner of solutions to derisking content is applied because of the inherently risky nature of hit making businesses.
> Netflix is just the victim of basic capitalism. You need to show endless growth no matter what the circumstances are. Fundamentally unsustainable.
What's basic capitalism? Is it bad that capitalism victimizes fundamentally unsustainable companies? And to whom does netflix need to show endless growth?
Lots of people and even companies do not require or have endless growth, many are content (or at least sustainable) turning a relatively constant profit.
Netflix works fine, they make plenty of profit. The problem is the endless growth requirement (be it from IP owners, share owners, or other stakeholders). It's unrealistic and Netflix could just coast along as-is with very few issues. But they don't want that, they want growth and ever increasing counts in subscribers, content and money.
The problem is that a profitable entertainment service used and enjoyed by many is somehow going to "not survive" based on unrealistic models applied by people that are neither consumers or producers of the profitable service itself.
Not if 'profitable' is not deemed enough, which is the problem. It's simply never enough (hence the many references to unrealistic infinite growth), so what is most likely to happen is some way to 'restart' the growth count, so we can have a pretend-infinite-growth party again. Maybe a merger, maybe a spinoff, maybe a some other construction.
> Not if 'profitable' is not deemed enough, which is the problem.
This is not the case under capitalism, it happens under regulated economies.
Under capitalism, "profitable" _is_ the signal of the net value something generates, and that is its own motive.
> It's simply never enough (hence the many references to unrealistic infinite growth),
Untrue. Many people and companies operate under steady (or even declining) profits, still run while they generate profit.
> so what is most likely to happen is some way to 'restart' the growth count, so we can have a pretend-infinite-growth party again. Maybe a merger, maybe a spinoff, maybe a some other construction.
A great number of good options for valuable companies and products and services are available under capitalism yes, this is one point I will agree on.
Strange retreat, but no we were talking about capitalism as well.
If we were just talking about netflix story, in that case what we're talking about is a CNN article claiming these things might happen which really has little basis in actual reality or how capitalism works. The _actual_ Netflix is still here, and it is still here despite being deemed not profitable enough by many.
Okay. We're still just talking about Netflix, mainly because I have referred to the article and to Netflix in every reply, and because I've explicitly stated it in the first and last reply as well.
If you would like to interpret it differently, that's up to you and I can't really help you with that.
Why is Netflix 'fundamentally unsustainable'? Hollywood studios are some of the oldest and biggest companies (notwithstanding overvalued tech stocks) on the planet. They've been 'sustainable' for decades. Netflix has (had?) quite good tech with CDN and recommendation engine, their engineers were well paid, they had sufficient users to be profitable, and one of the strongest, well regarded brands. I'd say fashion or bottled sugarwater companies have more 'fundamentally unsustainable' models because their main product is the brand. Netflix has a lot more than that.
Basic capitalism does have something to do with Netflix' problem. However, nowhere in capitalism does it say that you need endless growth. Netflix' valuation was dependent on growth (as signalled by its' PE ratio). Basic capitalism says you need a profit. Netflix will be fine if their profit never grows anymore, and they pay out their profits constant dividend. Even investors will not be terribly disappointed by the zero-growth scenario under its current valuation, which given their PE-ratio would be equal to a 5.8% yearly dividend and no capital gains.
Theoretically, you are correct. However, growth and non-growth companies are valued significantly different. Growth companies have a P/E multiplier, while non-growth companies can be valued like an annuity.
No member of the board would ever sign off on a plan that involves valuing the stock at 20% the current price. That’s why no CEO will have a no-growth plan.
Netflix has more valuable data on user preferences that Hollywood could only dream of. If they add a good gaming platform, they will do well in the coming future.
Netflix originally had a very healthy and diverse social ecosystem of reviewers. For some reason they decided to remove all comments and lengthy reviews for the thumbs up/down. Maybe it was because they didn’t want to hire mods but honestly it was a huge opportunity for Netflix to create a very sticky social media network that would be impossible to replicate and disrupt. Maybe because of hubris they thought that the studios would never catch up with the tech. I mean look at blackberry and Nokia - they never caught up to Apple but when you think of it as hardware vs software especially commodity cdn software after a decade it really comes down to either the content or social network effect. They missed on both.
>>For some reason they decided to remove all comments and lengthy reviews for the thumbs up/down.
The reason was / is pretty widely known, their customer base did not reaction "properly" with the "correct" opinions to the shift in direction of neflix original programming and comedy specials, coming to head with the widely panned Amy Schumer Special which most netflix customers responded negatively to and brought an end to the review and rating system
Misinformation alert! I tried to track down an article substantiating the comment above, and what I found was news outlets reporting that alt-right trolls organized to artificially spam 1-star reviews of her special.
Daily Dot is not a place I would cite for a "fact check"
Also pretty common, a meme for the most part now, for media outlets to proclaim all negative criticism is "alt-right trolls", these accusations are often given with out any real evidence backing the claim
Daily Dot is not the original source, they are one of numerous independent publications raising the same point. So that is irrelevent here, and they appear to be citing specific threads and not just engaging in open-ended speculation, and the phenomenon of organized alt-right trolling is real, so your comment is inaccurate at every level.
And why shouldn't the customer be able to review product for any reason?
Why is that fascist totalitarians on left want to ban freedom of the speech and always resort calling anyone who in most slightest and mildest degree disagree them as alt-right.
Coordinated inauthentic behavior to artificially tank reviews is not a representative sample of actual audience sentiment and shouldn't be represented as such.
And again, this isn't a case of "calling anyone" alt-right, it's not speculation, it's a report about stuff that happened in specific reddit threads.
Speculation based on timing, public comments and coincidence...
If this was a trial it would be a circumstantial case, probably not enough to convict someone "beyond a reasonable doubt" but if it were I think there is "clear and convincing" circumstantial evidence to correlate the 2 events
> Amy Schumer Special which most netflix customers responded negatively to
Speculation. There was a big social media swarm very loudly upset about Schumer, even putting aside the claim that they were alt-right like someone else here mentioned, you cannot deny the bandwagoning. The bad star ratings simply could not be trusted after that.
> I think there is "clear and convincing" circumstantial evidence to correlate the 2 events
These sorts of changes can take years to pitch and refine, especially given existing data Netflix had. I'll accept that the ratings brigade may have been a "okay, we've seen enough" moment for Netflix, but the fact is Netflix had been publicly talking about redesigning the rating system for more than a year prior.
This is like saying Elon Musk made Twitter work on an edit button, turns out they had been hashing out the details for years and were forced to say something.
I invite you to go back and re-read my comment, because I never claimed that Schumer event was what caused them to start working on a new system to replace the star, I said "their customer base did not reaction "properly" with the "correct" opinions to the shift in direction of neflix original programming and comedy specials, coming to head with the widely panned Amy Schumer"
The "incorrect reviews" predated Schumer, but as you said Schumer was the "we have had enough with our customers giving us feedback we do not like" moment
It was clear for a LONG LONG time before Schumer that at least 50% of netflix customer base was not happy with the direction the content was going... The ever decreasing subscriber count is a reflection of this as well
As to the "everyone that disagrees with me is alt-right nazi trolls" charge that people like to bet around anytime a movie, TV Show, or comedy special etc is not approved of by the audience is frankly non-sense.
The "media" coverage around the "review bombing" provided not actual evidence of such a thing happening, and unlike sites like Rotten Tomatoes, one had to be an actual customer of Netflix to review it so their is less opportunity for that than say a rotten Tomatoes which I personally think the "problem" is over stated even for those sites,
Instead it is gate keepers being out of touch with the consumers but they refuse to admit that so it is not them that is out of touch no it has to be "bots and trolls" or "alt-right" or some thing other than the actual fans, consumers, etc rejecting their project
I’m surprised this isn’t mentioned more. Removing ratings was a disaster, just personally as a consumer. You don’t feel engaged enough use their like/dislike system where as with a rating you got that feeling of contributing something and were contributing something. So, first you’ve removed engagement, that’s bad. And now we get these like 98% match type of rating systems, and every time you see a movie or show that is high match but you hate it makes you lose confidence in the whole system.
A goodreads for movies? I'd be interested in that.. But, Netflix was getting more barren. People would notice the reviews they wrote were disappearing, because the content itself got pulled (not-renewed) from Netflix. That's worse than one-time plug-pull, so Netflix didn't really have the choice.
Letterboxd wants to be that, pretty much, without tying it to one specific catalogue of titles available to stream.
I think Mubi still has a lot of reviews, regardless if movies are available there or not. There it works, I think, because their offering always was understood to be much more niche than Netflix's.
These days I just go to /r/MovieSuggestions. Nearly everything I've watched since pandemic has come from suggestions there and they are quite good. The sub probably has a year of life left before it gets overrun, so enjoy while it lasts :)
This might be an overreaction, but for me it's kind of the end of Netflix as a tech company.
For years, Netflix stock has been growing, Netflix has been hiring great software engineers, and people considered them a tech company. But the tech there is not a differentiator. I don't know anyone who will choose Netflix over Disney+ or HBO because of better tech. My brother hates the HBO app, but he uses it because it has content he likes to watch.
Streaming still provides technical challenges, and people will praise providers for great UX, high quality video etc. but in this case, very clearly content is the king. Netflix has had a few years to catch up with competitors who have decades worth of content. It wasn't a lot of time, and they did what they could, but it seems this time is over now. Netflix is no longer the sole player, it's one of a few competitors.
> I don't know anyone who will choose Netflix over Disney+ or HBO because of better tech.
I don't think it is about tech choices but user hostility. Any streaming service could differentiate by allowing you to turn off autoplay or not have some pushy in-your-face "feed" berry your recently watched series list.
But ye, in the end its probably all down to content, like you say.
That would only provide an advantage if all of the platforms had the same catalogue. I think people switch streaming music platforms based on UX differences because they all have most of the music, and it's rare that people want to listen to specific music.
That doesn't seem to be the case with video unfortunately. I predict a resurgence of piracy.
The premise before streaming tech matured at least was Netflix's data pipeline was so great and ML algorithms so good they'd recommend films so effectively and produce films that users would crave. Feels like those two claims have failed, and at the end of the day content (IP) is king in the entertainment media world.
The recommender may be having trouble because of the large catalog of garbage content. That is, it's working right, but there's so much shite in the catalog that the recommendations are polluted.
Why is there a belief that the provider of content should also be the source of quality recommendations? I also see this disappointment with for example Steam and gaming. Or Spotify and music.
But the days of walking into department stores and purchasing things based on a service rep's recommendations are behind us. We understand stores are incentivized to sell you the item most profitable to them. The Internet has a vast amount of places to inform your decisions independent of parties acting against your interests.
Netflix is a gigantic warehouse of a lifetime of content. Some bad, some good. If you select something poorly, perhaps you're better served honing a better selection criteria.
>Why is there a belief that the provider of content should also be the source of quality recommendations?
I suppose because they should be able to do this well. They know what I have watched, what I bailed out early on, terms I search for and which results I looked at, and so on. And no shortage of tech talent to do the right thing with all of that.
Has it failed? Youtube and tiktok's strategy of using top notch AI to hypertarget a tsunami of really cheap and mediocre content seems to work pretty well.
I think it failed for Netflix, those two sites have massive corpuses and a constantly pumping pipeline of fresh content. I guess they also figured out the economics re: paying content creators to ensure that's the case, Netflix I think dropped billions to establish IP to keep people hooked to Netflix and failed.
I can’t speak for TikTok (as I’m not a user), but I haven’t met anyone that would consider YouTube’s recommendation algo any good at all. I believe most users share the experience of pausing their scrolling to deliberately say “Don’t recommend this channel”, or “I’m not interested in this”.
Recommendations have to be pretty terrible for users to break the apathetic endless scrolling motion they’ve been conditioned to embrace, and make several distinct and deliberate clicks amounting to the provided feedback, “stop annoying me with how much you suck”
>I don't know anyone who will choose Netflix over Disney+ or HBO because of better tech
There was a time when the player for some streaming services was so terrible I'd avoid it, though sometimes only terrible on a specific platform (Roku, etc). I think you're right though, they are all now good enough that it's not a real factor for the basic player functions.
Though I do still tend to prefer Prime over some other services when picking something that's available on many, like a new-ish movie rental. Mostly because of the "X-ray" feature where I can see the list of characters and actors by scene. So, at least for me, there's some tech advantage left here and there.
Funny, Netflix is my least favorite app (on AppleTV), followed by the AppleTV TV+ app. The current version of the HBO Max app is fine. It lets me find what I want, keeps track of what I was watching so I can easily resume, surfaces interesting content.
Netlfix by contrast makes it hard for me to resume where I left off unless I explicitly add a show or movie to my list, which it still makes it hard to get to. Netflix refuses to expose its catalog to Apple, so I can't search for shows via Siri. Netflix also still forces the end of a show/movie down to a thumbnail sometimes before the credits even roll. And yes, it does this regardless of the autoplay settings, which I have turned off.
The only annoying bug HBOMax continues to have is that it constantly turns subtitles back on.
My favorite streaming app is Criterion. Netflix at the bottom, the others all in the middle.
IME the most annoying bug in HBO Max is the audio starts out of sync roughly 75% of the time. Rewinding once or twice fixes it but having to do it so often is frustrating.
I haven't experienced that with HBO Max on AppleTV. The Disney+ app sometimes has the audio drift out of sync as a movie plays and pausing/play brings it back to sync.
You know what has none of these problems? Playing locally from my NAS using Infuse. When I'm watching something I care about, I download it to my NAS in advance. Sad, but true.
What I don't get is why Netflix never licensed their technology to other platforms. For instance, why not white label their tech for Disney, Paramount, sports leagues, etc. Their tech is better than competitors and it would have been great to watch MLB through a white-labeled Netflix experience rather than MLBAM. Maybe they did try to pursue this path but it wasn't lucrative enough?
I also wonder if Netflix thought that perhaps content could be licensed on multiple platforms. It's unfortunate that movie/TV content seems to have exclusive licenses in contrast to music which is available on multiple platforms.
Maybe they thought it would be difficult enough to replicate their streaming tech, that it would serve them as a moat? And by the time they realized that it wouldn’t, nobody else was interested because they already did it?
My guess is that they tried to keep advantage as long as possible to remain number 1 in streaming, so they didn't want to give their leverage to competitors.
Their advantage was licensing (Marvel, Friends, The Office etc.) and tech. In both cases eventually competitors caught up - they launched their own platforms, and licensing contracts expired. That gave Netflix a few years more to develop their own content, but now it's over.
Disney, NBC, HBO etc would never pay Netflix, their competitor in the video entertainment industry, for any tech. At best Netflix could provide tech for smaller players like Crunchyroll, Nebula, Mubi, Spuul etc.
>What I don't get is why Netflix never licensed their technology to other platforms. For instance, why not white label their tech for Disney, Paramount, sports leagues, etc
That's probably a company worth billions. But not the hundreds of billions Netflix is valued at.
They famously said Netflix has to become HBO faster than HBO can become Netflix.
Well now they have tried to become every channel and completely lost their brand identity. It used to be tied to more prestige TV (house of cards) etc. Now they try to produce content for everyone, and in the end their brand ends up standing for no particular kind of content. When you log in to someone else’s Netflix it’s like a completely different streaming service.
Meanwhile streaming tech has become more and more of a commodity. And other brands are associated with better / specific content.
I’m not sure if ironic is the best word, but I think Netflix suffers from way too much content. It’s honestly overwhelming to try and find something, and the suggestions are laughably bad. Maybe those two thoughts are more related than I think, but these days I almost never browse Netflix for something to watch. I used to.
I was wondering about the potential for a gaming play. They did hire that exec to be VP of their "game studio", but I haven't heard anything since.
Netflix has sufficient capital & technology to cause trouble for the kinds of markets that EA and Activision-Blizzard operate in. I don't know if they have the requisite time or leadership to execute before the market eviscerates them though.
I've tried their games, they were all mobile shovelware with the IAP taken out. However, they are releasing Into the Breach next week, an acclaimed indie game from 2018. So maybe they're shifting their strategy.
The Into the Breach mobile launch coincides with the release of a bunch of new content on all platforms. I’ve wondered if the Netflix deal funded that.
Netflix also recently released mobile GOTY contender Poinpy, developed by the Downwell guy.
Gaming is very tight market. Valve with Steam is in nigh unsurmountable position. Just look at how EGS has be doing and consider could Netflix do any better? And then if you were to publish games you would need to compete with Microsoft.
I don't really understand the tone of this article. Estimates are that they lost 1% of subscribers in Q2 while stock price is down 70% this year. Are they going broke? Apparently not. Is the stock price already very low? Yes, it appears to have priced in an even greater loss of subscribers than expected. What is going on here?
Are we asking if the market is behaving rationally? Losing subscribers, laying off employees, and monetizing via ads aren't all that confidence inducing. Netflix has been overvalued for at least three years by many tens of billions. Sudden losses can be jarring, but they're not surprising, if that makes sense.
FWIW Netflix brand is big outside US thanks to piracy. Instead of focusing on clamping on password sharing which is literally free growth, they should focus on becoming truly international by overcoming currency issues like classic brands do (through franchise business model for example)
To me it seems a no brainer for Netflix to buy Spotify in a year or two at the peak of the recession and offer a dual service membership alongside its existing options. As it stands, if Spotify raises its prices again then it makes more sense for me to buy an Apple One subscription and putting up with the worse interface rather than forking out for Spotify. If more and more people start doing the same then it’s done as a service and its price is going to tank. At the same time, with more and more tv/film content being split across different providers, I’m most likely going to start rotating e.g 1 month Disney, 1 month Paramount, 1 month Netflix, with a yearly Prime membership and and Apple One subscription being my only constants. If Netflix had Spotify that would be a reason to ditch apple one and keep a year round Netflix subscription rather than demoting it to rotation.
I’d also look at acquiring Criterion and A24. Netflix then becomes the home of independent cinema, auteur and classic cinema and original storytelling vs the other options which (HBO/Now TV excepting) all seem to rely heavily on existing franchises. I’d also look at upping the amount of stand up specials which it seems to be doing with the Netflix is a joke festival.
They could also potentially buy Peloton now whilst it’s struggling. Buy Dropbox and Substack as well and now you’re a full Apple One competitor.
And valve for games.
Market Cap (billion dollars):
> Buy Dropbox and Substack as well and now you’re a full Apple One competitor.
Good one. To be 'full' Apple One competitor, you'd need default app installs as well as built-in advertisements/notifications channel across macs/iDevices.
Oh also, Valve is privately owned money printing machine. I doubt gaben would be interested in selling it.
Am I only one who thinks that 10 billion for Valve with past valuations for tech companies sound awfully low... I really wonder where they would be if they had VC money or were public.
It’s absurd to me that a company with this many active subscribers can be called in “rough shape” simply because they cannot continue to grow (there is an upper bound to the number of people worldwide who can and will subscribe to streaming)
First, let's put things in perspective. Netflix is still a successful and profitable company. Their amazing growth has indeed reached a platu.
In my opinion they fell too much in love with the concept of keep doing the one thing you do well. We usually criticize companies that don't do it but sometimes it works the other way too, esp if you want to keep growing at the level that is expected from a FAANG company. They didn't really expand their service to other areas (beyond expanding to original content and international, both very successfully) like Amazon for example is doing with Prime. But they did keep increasing prices.
Netflix keeps raising rates to pay for arguably worse quality shows and raising rates while also canceling good shows with followings out of the blue. Not sure what they really expected to happen.
Netflix has pretty terrible original content. It’s gotten worse over time tbh. It’s like cheap television. There are better streaming services with highly quality content. Amazon, HBO, Disney, to name a few.
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[ 2.8 ms ] story [ 176 ms ] threadThey had no vendor lock-in effect like Apple, Microsoft or Google and no social media network efect like Snapchat, Discord, Meta that would guarantee their customer base to stay long term on the platform. They also couldn't monetize their users' personal data through ads as much as the other chat apps and social networks. And it was only a matter of time before juggernauts with valuable IPs like Disney, Warner, etc. would build their own streaming services to disrupt them.
The moment their competitors with the desirable IP would jump in the ring, or their content was no longer addictive, or their customer base would feel economic hardship, or their VC money dried up, their service could be easily disposed of without a hit to quality of life to their users.
Also, people could pirate their content basically for free, so there's also that, versus the likes of Disney, Warner, etc had other revenue streams besides just a streaming service.
For a long time, the general idea worked out. The problem was that the studios did manage to get their butts off the ground eventually - especially Disney removing all their stuff from Netflix and creating Disney Plus with a lot of the most popular cinema franchises (Star Wars, MCU, Avatar, all the "classic" Disney and Pixar films) was a real setback - and now combined with the aftereffects of pandemic lockdowns and work-from-home movie distractions going away, Netflix' future does seem a bit bad.
Netflix doesn't have a similar advantage. Media companies produced shows and Cable companies distributed them just fine before. The advantage they had in technology and being able to buy cheap media has evaporated.
Their advantage of being able to burn money is now evaporating with it. They're left with trying to produce better media cheaper which they can't do because they're worse than legacy studios. Or distributing cheaper/better which they can do but there's not a 10+ billion dollar company there.
Worse for them Apple & Amazon still seem to be happy burning money for a while. Not a lot of bargains out there buying media.
They eventually reached a scale in the streaming category (which they essentially invented from a business standpoint, even though they did not invent the technology) where it made sense for them to produce their own content, both because it was more economically efficient generally and to prevent studios from starving them of content and shutting off their revenues. Their move into producing some fraction of their own content matched that of both cable companies and TV studios before them.
Netflix's primary advantage, in both the DVD market and the early streaming market was 100% a radically disruptive distribution advantage. Eventually, in both cases, they became so dominant that they redefined their own industries. It's not that Netflix is a cable company, it's that cable were forced to become Netflix to stay alive and avoid the fate of Blockbuster and Netflix's original competitors.
Who said that Spotify is the endgame? That's like saying that MySpace is the endgame for social media or that 3Dfx is the end game for GPU tech. Few tech companies survive long term. AFAIK, unlike Netflix, Spotify don't own any of the IP they stream, they just license it from the major record companies, making them effectively just a middleman with commodity tech. So, in theory, if they wanted to, the major record companies who actually own the IP Spotify streams, could join forces and build their own streaming services, and stop licensing their IP to Spotify, effectively killing them over night. And let's not talk about the bad blood between Spotify and many artists who would love to see Spotify burn to the ground.
So, IMHO, in theory Spotify is even easier to kill than Netflix, but as to why that hasn't yet happened, that's up to the execs of the major record companies to answer. Maybe they decided it's easier and more convenient to just sit on their butts and license their IP to Spotify, Apple, Amazon, and have them outbid each outer for the licensing fees and collect rent from them, rather than bothering to assemble armies of picky and expensive SW devs to build their own competing services, since those dinosaur execs at the record companies aren't known to be very tach savvy, and in fact spent most of their lives fighting the tech industry in courts instead of investing in it.
Also, most importantly, music and video distribution and consumption are completely different beasts, so direct comparisons between Netflix and Spotify are pretty difficult even if all other things were to be equal.
Each of the big media companies hold maybe 25% of the "legacy" catalogue (75% of streams). And playlists are usually mixed, so switching app to listen to a few 15% of songs won't happen.
They simply don't have the market power at the moment.
IMO it makes sense for the music industry to shift their focus and attention towards live events anyway - you can't steal or pirate tickets (and scalper profits are often enough rumored to originate at the artists themselves) and merchandise, and the effort not just in development but especially in brand recognition building against Spotify would be immense, not to mention the shitstorm/backlash potential from such a move or the antitrust risk.
Why spend time and money building your own music platform when you can get paid to not do that 4 times? 4 players also solidifies content owner's position in the market because simple supply x demand.
What I'm surprised by is how long they were able to extract a large middle-man fee from studios and use that to fund a direct competitor to them. Took some chutzpah.
Fun fact: In 2019, the DoJ decided that it would stop enforcing the Paramount decrees, because there's no way studios could lock out independent distributors in today's environment. Clearly, no way whatsoever.
[0] https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic...
It might have been a great business, if the owners of those movies had been happy to just get a small fee from Netflix.
Unfortunately that's not how it turned out, for instance Disney decided they could both make their own tech and their own content, esp for such things like Mandalorian which takes a modern long-story format that is suitable for streaming. Basically it turns out content is king, which Netflix also realized as they went and tried to make their own stuff with limited success.
What I don't get is why it's so hard to make the content. They've certainly thrown a lot of money at it, how come nothing sticks? By contrast everything Disney makes seems to be high quality.
Instead they fragmented, and there is no way that I will be figuring out which of the dozen subscriptions I need any time I want to watch something, and I know I am not alone here.
Piracy is king once again. It has all the content, and none of the bullshit.
This kind of thing comes from company culture too. I can’t speak to specifics, but presumably Disney and other studios who have been at the content game a lot longer than Netflix have a better understanding of how to cater to their customers and foster that relationship over time.
Another way to put all this is simply that it’s a lot harder to build a content business than a CDN, especially now. So the existing content biz just built CDNs.
It was a solid theory, and honestly it still isn't obvious that it's failed. Netflix still has an much larger user base than any of the competing services, despite charging much higher prices. But other than the stellar job they did with international content, they certainly haven't executed on this as well as people imagined. It's quite amazing how badly they have been spending that massive content budget, and how long the mismanagement has been going on.
(Their prestige "Hollywood movies at Hollywood budgets straight to streaming" projects are probably the most obvious example. Who the fuck greenlit Gray Man at $200M?)
Turns out, when billions are on the line, they could actually.
Also by leaning into the "...and chill" idea by recommending users interested in hookups.
Where I'm at, Disney is already cruising.
Infact, all major production companies seem to have realised a while ago that they all can individually create their own streaming platform.
I don’t care about Netflix, I was never a subscriber. But I wonder if this is really about Netflix or about the absurdity of the larger system.
What's basic capitalism? Is it bad that capitalism victimizes fundamentally unsustainable companies? And to whom does netflix need to show endless growth?
Lots of people and even companies do not require or have endless growth, many are content (or at least sustainable) turning a relatively constant profit.
Capitalism punished the people who had unrealistic expectations of netflix's growth.
This is not the case under capitalism, it happens under regulated economies.
Under capitalism, "profitable" _is_ the signal of the net value something generates, and that is its own motive.
> It's simply never enough (hence the many references to unrealistic infinite growth),
Untrue. Many people and companies operate under steady (or even declining) profits, still run while they generate profit.
> so what is most likely to happen is some way to 'restart' the growth count, so we can have a pretend-infinite-growth party again. Maybe a merger, maybe a spinoff, maybe a some other construction.
A great number of good options for valuable companies and products and services are available under capitalism yes, this is one point I will agree on.
If we were just talking about netflix story, in that case what we're talking about is a CNN article claiming these things might happen which really has little basis in actual reality or how capitalism works. The _actual_ Netflix is still here, and it is still here despite being deemed not profitable enough by many.
If you would like to interpret it differently, that's up to you and I can't really help you with that.
I was replying to parent who said that. Or at least that's how I read it.
No member of the board would ever sign off on a plan that involves valuing the stock at 20% the current price. That’s why no CEO will have a no-growth plan.
Netflix has more valuable data on user preferences that Hollywood could only dream of. If they add a good gaming platform, they will do well in the coming future.
The reason was / is pretty widely known, their customer base did not reaction "properly" with the "correct" opinions to the shift in direction of neflix original programming and comedy specials, coming to head with the widely panned Amy Schumer Special which most netflix customers responded negatively to and brought an end to the review and rating system
https://www.dailydot.com/upstream/amy-schumer-netflix-alt-ri...
Also pretty common, a meme for the most part now, for media outlets to proclaim all negative criticism is "alt-right trolls", these accusations are often given with out any real evidence backing the claim
Why is that fascist totalitarians on left want to ban freedom of the speech and always resort calling anyone who in most slightest and mildest degree disagree them as alt-right.
And again, this isn't a case of "calling anyone" alt-right, it's not speculation, it's a report about stuff that happened in specific reddit threads.
If this was a trial it would be a circumstantial case, probably not enough to convict someone "beyond a reasonable doubt" but if it were I think there is "clear and convincing" circumstantial evidence to correlate the 2 events
> Amy Schumer Special which most netflix customers responded negatively to
Speculation. There was a big social media swarm very loudly upset about Schumer, even putting aside the claim that they were alt-right like someone else here mentioned, you cannot deny the bandwagoning. The bad star ratings simply could not be trusted after that.
> I think there is "clear and convincing" circumstantial evidence to correlate the 2 events
These sorts of changes can take years to pitch and refine, especially given existing data Netflix had. I'll accept that the ratings brigade may have been a "okay, we've seen enough" moment for Netflix, but the fact is Netflix had been publicly talking about redesigning the rating system for more than a year prior.
This is like saying Elon Musk made Twitter work on an edit button, turns out they had been hashing out the details for years and were forced to say something.
https://www.businessinsider.com/netflix-wants-to-ditch-5-sta...
The "incorrect reviews" predated Schumer, but as you said Schumer was the "we have had enough with our customers giving us feedback we do not like" moment
It was clear for a LONG LONG time before Schumer that at least 50% of netflix customer base was not happy with the direction the content was going... The ever decreasing subscriber count is a reflection of this as well
As to the "everyone that disagrees with me is alt-right nazi trolls" charge that people like to bet around anytime a movie, TV Show, or comedy special etc is not approved of by the audience is frankly non-sense.
The "media" coverage around the "review bombing" provided not actual evidence of such a thing happening, and unlike sites like Rotten Tomatoes, one had to be an actual customer of Netflix to review it so their is less opportunity for that than say a rotten Tomatoes which I personally think the "problem" is over stated even for those sites,
Instead it is gate keepers being out of touch with the consumers but they refuse to admit that so it is not them that is out of touch no it has to be "bots and trolls" or "alt-right" or some thing other than the actual fans, consumers, etc rejecting their project
Letterboxd wants to be that, pretty much, without tying it to one specific catalogue of titles available to stream.
I think Mubi still has a lot of reviews, regardless if movies are available there or not. There it works, I think, because their offering always was understood to be much more niche than Netflix's.
For years, Netflix stock has been growing, Netflix has been hiring great software engineers, and people considered them a tech company. But the tech there is not a differentiator. I don't know anyone who will choose Netflix over Disney+ or HBO because of better tech. My brother hates the HBO app, but he uses it because it has content he likes to watch.
Streaming still provides technical challenges, and people will praise providers for great UX, high quality video etc. but in this case, very clearly content is the king. Netflix has had a few years to catch up with competitors who have decades worth of content. It wasn't a lot of time, and they did what they could, but it seems this time is over now. Netflix is no longer the sole player, it's one of a few competitors.
I don't think it is about tech choices but user hostility. Any streaming service could differentiate by allowing you to turn off autoplay or not have some pushy in-your-face "feed" berry your recently watched series list.
But ye, in the end its probably all down to content, like you say.
That doesn't seem to be the case with video unfortunately. I predict a resurgence of piracy.
But the days of walking into department stores and purchasing things based on a service rep's recommendations are behind us. We understand stores are incentivized to sell you the item most profitable to them. The Internet has a vast amount of places to inform your decisions independent of parties acting against your interests.
Netflix is a gigantic warehouse of a lifetime of content. Some bad, some good. If you select something poorly, perhaps you're better served honing a better selection criteria.
I suppose because they should be able to do this well. They know what I have watched, what I bailed out early on, terms I search for and which results I looked at, and so on. And no shortage of tech talent to do the right thing with all of that.
There was a time when the player for some streaming services was so terrible I'd avoid it, though sometimes only terrible on a specific platform (Roku, etc). I think you're right though, they are all now good enough that it's not a real factor for the basic player functions.
Though I do still tend to prefer Prime over some other services when picking something that's available on many, like a new-ish movie rental. Mostly because of the "X-ray" feature where I can see the list of characters and actors by scene. So, at least for me, there's some tech advantage left here and there.
Funny, Netflix is my least favorite app (on AppleTV), followed by the AppleTV TV+ app. The current version of the HBO Max app is fine. It lets me find what I want, keeps track of what I was watching so I can easily resume, surfaces interesting content.
Netlfix by contrast makes it hard for me to resume where I left off unless I explicitly add a show or movie to my list, which it still makes it hard to get to. Netflix refuses to expose its catalog to Apple, so I can't search for shows via Siri. Netflix also still forces the end of a show/movie down to a thumbnail sometimes before the credits even roll. And yes, it does this regardless of the autoplay settings, which I have turned off.
The only annoying bug HBOMax continues to have is that it constantly turns subtitles back on.
My favorite streaming app is Criterion. Netflix at the bottom, the others all in the middle.
You know what has none of these problems? Playing locally from my NAS using Infuse. When I'm watching something I care about, I download it to my NAS in advance. Sad, but true.
I also wonder if Netflix thought that perhaps content could be licensed on multiple platforms. It's unfortunate that movie/TV content seems to have exclusive licenses in contrast to music which is available on multiple platforms.
Their advantage was licensing (Marvel, Friends, The Office etc.) and tech. In both cases eventually competitors caught up - they launched their own platforms, and licensing contracts expired. That gave Netflix a few years more to develop their own content, but now it's over.
That's probably a company worth billions. But not the hundreds of billions Netflix is valued at.
Well now they have tried to become every channel and completely lost their brand identity. It used to be tied to more prestige TV (house of cards) etc. Now they try to produce content for everyone, and in the end their brand ends up standing for no particular kind of content. When you log in to someone else’s Netflix it’s like a completely different streaming service.
Meanwhile streaming tech has become more and more of a commodity. And other brands are associated with better / specific content.
Netflix has sufficient capital & technology to cause trouble for the kinds of markets that EA and Activision-Blizzard operate in. I don't know if they have the requisite time or leadership to execute before the market eviscerates them though.
and now Microsoft is the Disney of gaming, with Xbox Live being Disney+ of gaming
Netflix also recently released mobile GOTY contender Poinpy, developed by the Downwell guy.
One way would be to buy someone with big enough catalog like THQ Nordic. They have been playing acquisition game for long time now: https://en.wikipedia.org/wiki/List_of_acquisitions_by_THQ_No...
I’d also look at acquiring Criterion and A24. Netflix then becomes the home of independent cinema, auteur and classic cinema and original storytelling vs the other options which (HBO/Now TV excepting) all seem to rely heavily on existing franchises. I’d also look at upping the amount of stand up specials which it seems to be doing with the Netflix is a joke festival.
Netflix: 84.02
Spotify: 19.71 Dropbox: 8.17 Peloton: 2.86 Valve: 10 Substack: 0.65 A24: 2.5
Sounds doable looking at those numbers.
Good one. To be 'full' Apple One competitor, you'd need default app installs as well as built-in advertisements/notifications channel across macs/iDevices.
Oh also, Valve is privately owned money printing machine. I doubt gaben would be interested in selling it.
It’s absurd to me that a company with this many active subscribers can be called in “rough shape” simply because they cannot continue to grow (there is an upper bound to the number of people worldwide who can and will subscribe to streaming)
In my opinion they fell too much in love with the concept of keep doing the one thing you do well. We usually criticize companies that don't do it but sometimes it works the other way too, esp if you want to keep growing at the level that is expected from a FAANG company. They didn't really expand their service to other areas (beyond expanding to original content and international, both very successfully) like Amazon for example is doing with Prime. But they did keep increasing prices.