Netflix Is Going to Rule TV After All

http://www.wired.com/business/2014/01/turns-netflix-going-rule-tv

by yarapavan • 12 years ago

81 65 12 years ago

leoplct• 12 years ago

Zapping.io has great potential too

guelo• 12 years ago

I'm still sceptical. If it costs $100 million to produce a quality show season it doesn't seem like Netflix can produce more than a handful per year. Is that enough content to keep people subscribed if Hollywood keeps taking away more and more of their stuff?

leobelle• 12 years ago

HBO only produces a handful a year, and Netflix has actually got a pretty decent selection of stuff.

gumby• 12 years ago

I agree they can't fill their pipeline alone. Yet the studios have Netflix by the gonads since the studios control who gets to see what when.

You can see this from Netflix's crappy selection of streaming videos compared to their selection of DVDs. Not to mention that films mysteriously appear and disappear from the streaming library due to license expirations.

No way Netflix would want to do that on their own.

avenger123• 12 years ago

The residual benefits of a hit series that Netflix produces is really where the value is.

With a hit series that they own:

1) Subscribers know that the series will never go way. 2) Once a season is the bag, the return on the season is really high going forward as there is no cost to show the episodes (ie. no content fees)

All this means that Netflix will continue to fund new series and find ways to bring the cost down. The future returns on a series is just to big to ignore for them to not do it.

protomyth4• 12 years ago

When the cable money collapses, Disney, HBO/TimeWarner, etc. will just create their own streaming service and charge for it while removing all content from other services. Netflix will just be one streaming channel among many. They will have their own content and probably the content from folks not big enough to do their own channel (assuming Amazon doesn't start stealing that).

Netflix is still the biggest, but so was Blockbuster and then the game changed. When cable rates go poof, the game will change again.

w1ntermute4• 12 years ago

That's why Netflix's goal is to become HBO faster than HBO can become Netflix. Do you think it's that easy to set up a reliable online streaming service? Those content companies (Disney, HBO, etc.) will go through a lot of trial and error before they can figure it out. If Netflix capitalizes on that opportunity to get people to watch their shows instead (presuming that they're good shows), then they've definitely got a shot at become an online content company.

mukyu• 12 years ago

HBO already has HBO Go so they would only have to scale it out.

adharmad• 12 years ago

(presuming that they're good shows)

That's the crux of it. There will inevitably be good and bad shows, or even good but unpopular shows. The viewers are fickle and Netflix will need to somehow manage keeping their attention. Netflix's problem is that they don't own the content. But as soon as they enter the content-creation business, they will be the same as Disney (and will face the same challenges).

protomyth4• 12 years ago

If you haven't noticed, all of the content companies[1] are doing the initial work. Look at how many of them are now on devices such as Apple TV. Time Warner / HBO has quite a lot of content they can stream.

I don't have a doubt Netflix will survive, but it will be one of many and probably the Indy / small provider company, if Amazon doesn't run them over.

1) even MLB

sroerick• 12 years ago

Netflix's goals run much deeper than this. The article touches on this briefly. The goal of becoming HBO has been completed. Take a look at the list of Netflix Original Programming. They've succeeded at becoming a content generator, and they are actively scooping up other companies' IP a la Valve (Arrested Development being the epitomal example of this.). All this does, however, is puts them in league with the major studios.

Netflix is still at the mercy of the internet providers, which are increasingly also controlled by the major content studios. Comcast just won a huge net neutrality battle and is making a play for Cablevision. Netflix has said it's willing to "mobilize its users" against traffic throttling abuse. Netflix's goal is to become Disney before Disney can become Netflix.

They've got better data and infrastructure. And they seem to have a one-up on a culture that lets them be flexable with IP. We'll see what happens.

k-mcgrady• 12 years ago

> "Netflix will just be one streaming channel among many."

If the cable business does die those companies could partner with Netflix, split revenues (and risks) and continue commissioning shows.

Content available on Netflix would go up, they could jack up the price (one place to view everything justifies that) and the cable companies don't go completely out of business.

It'll probably never happen but it seems like an ideal solution for all parties, including customers.

cylinder2• 12 years ago

You are underestimating the importance of infrastructure and technology in this equation. No, it's not all just content. Netflix has mastered streaming and is far away ahead of everyone else. Their interface, especially on smart TV and STB apps is better than anyone else's, a far more interactive experience for the end-user.

In addition Netflix has built up infrastructure to allow it to stream in high def in the first place. They are peering near ISPs in large localities to reduce bandwidth costs and improve speeds to the user.

On top of that, how often does your netflix stream stop to buffer? Almost never. They've encoded every file in almost every possible resolution and bitrate and the player seamlessly switches amongst them as the connection slows or speeds up.

Remember, it's not about streaming on your laptop, it's about your television. Forget about the browser experience.

I'm constantly in amazement of Netflix. There is so much more to them than merely acquiring or creating content. To say that Disney and TW will simply setup their own services with great ease discounts the barriers to entry that they will face, as well as the significant costs.

The whole point is that Netflix is racing to build up infrastructure and IP so that the economics of Disney starting its own streaming service instead of getting revenue by streaming on Netflix will not make sense.

phamilton2• 12 years ago

ESPN has a strong online presence (gated via tradtional media subscriptions).

ESPN is Disney. There have live TV, replays , highlights streaming online already. Adding some non sports content won't be trivial, but they aren't starting from ground zero.

Touche2• 12 years ago

You overestimate the importance of "experience". Content is all that matters.

protomyth4• 12 years ago

All of the big providers are currently running streaming services. They are getting the experience necessary now. MLB has been quite successful in streaming to devices and TVs.

Disney charging each customer instead of the cable share is going to be above the money Netflix is willing to pay for all of Disney's content. All of the big players have quite a lot of content they are currently getting ready for digital streaming. Disney and HBO are already on Apple TV and others (heck Disney is there a couple of times).

Netflix doesn't have the money to scale up to their content machines before the cable money goes. They'll live if Amazon doesn't get aggressive.

inthewoods3• 12 years ago

"In addition Netflix has built up infrastructure to allow it to stream in high def in the first place. They are peering near ISPs in large localities to reduce bandwidth costs and improve speeds to the user."

Try Vudu if you want to see real dependable HD. I've had issues with Netflix "blocking up" (pixalated) while the Vudu stream is fine and the picture, in my opinion, is better than any other service out there.

gnoway3• 12 years ago

It will be different though, and interesting to see play out. Netflix became a big deal because they provided a much better experience than the incumbent. What you're describing is not a better experience at all; It seems more likely to me that cable would continue as-is rather than there be a fractured online marketplace where every provider is effectively a premium channel.

jerf2• 12 years ago

As I recall it, Netflix's Immanent Demise was overblown in the first place. They faced a couple of challenges and stumbled for a couple of quarters, and Wired rushed to declare them Walking Dead. They failed to keel over dead on schedule, and now apparently Wired, which just isn't much for middle ground, declare them the inevitable winners of a battle that has hardly even started yet.

This is filler; they are no more inevitable now than they were doomed a year ago. It's still a rapidly changing landscape, they still own a lot of the territory, and it's still very difficult to guess the future. (My only guess is a negative one; the market is not stable with every content company owning their own streaming service, because consumers are not going to pay 15 bills a month for video content, no matter how cheap they are. Someone's going to aggregate, somehow. My guess about the how is something more like an Amazon hybrid model of subscription + optional premium content, but Netflix is putting up a good fight on the subscription-only side, so.... shrug.)

stcredzero2• 12 years ago

This is filler

It's Wired.

foobarian2• 12 years ago

The content licenses are a real pain. Maybe one of the aggregators will just power through and have so much more content available that it will squeeze out everything else until new content only signs up with the winner, without strings attached.

The other day I was trying to binge watch a season of a broadcast TV show, so I tried the On Demand thing on the FIOS cable box. Just 5 latest episodes available. Fine, this dinosaur is dead anyway, so I go to Hulu Plus; surely they will have the whole season, that's why you pay the sub, right? 2 latest episodes available! WTF.

These incumbents are not competing with Netflix et al, they are actively burning the subscriber base and encouraging them to switch. I think if they put up a huge banner saying "Please don't use this site and go to Netflix instead" I would probably spend more time there than now. Sad panda is sad.

hsitz• 12 years ago

" so I go to Hulu Plus; surely they will have the whole season, that's why you pay the sub, right? 2 latest episodes available! WTF. . . . These incumbents are not competing with Netflix et al, they are actively burning the subscriber base and encouraging them to switch."

As far as I know, Netflix doesn't have current season of TV shows at all. So Hulu Plus and the cable 'on demand' services are mostly complementary to Netflix, purely complementary if you buy Hulu Plus for access to current season shows.

kbutler• 12 years ago

I go to Hulu Plus; surely they will have the whole season, that's why you pay the sub, right?

No, you pay for Hulu Plus so you can watch ads in pay TV...

Tactic• 12 years ago

And yet you can find all the latest episodes for free from many sources via bittorrent.

When enough people find piracy convenient enough to use as their full-time solution the market will evolve a reasonable monetized solution. Until then there is not enough incentive for the content producers.

Sad panda will stay sad for some time.

fatjokes• 12 years ago

Wired, which just isn't much for middle ground

I imagine middle ground doesn't make for good link-bait headlines, so this is true of most media outlets (even prestigious ones).

zem• 12 years ago

"imminent demise", pointed out not for pedantry but because "immanent" is a lovely word in its own right.

jerf2• 12 years ago

That's what I get for taking the first spell checker correction.

Oculus• 12 years ago

The real power Netflix has is they're at a point where they'll decide the entire future of an industry. TV-advertising will have to adapt to a world in which most people watch Netflix. In House of Cards they did quite a few product placements, but I don't think that's sufficient to absorb the multi-billion $ industry that advertising is. It'll be interesting to see where Netflix decides to carry the torch.

doug3465• 12 years ago

Someone please help me understand how HBO, Showtime, and now even Netflix can make so much quality programming and it seems all the networks can do is complete shit. Do they just not give a fuck anymore?

vinceguidry• 12 years ago

The networks have the problem of having everything they make have to have broad appeal. There's censorship rules they have to abide by. Subscription services don't have this problem, they can make anything.

stcredzero2• 12 years ago

What of net neutrality?

kriro• 12 years ago

I enjoy Netflix quite a bit more than Hulu+...so much so that I don't care about watching recent stuff anymore and gladly wait for a bit.

Hulu+ requires you to link with your cable provider to watch a lot of the new stuff anyways which is a no go for me since...the point is not having a cable provider anymore.

Also...entire series simply don't stream if you're on Linux. Community and Linux-Flash don't work for example, something about their crappy DRM.

Netflix isn't exactly Linux friendly (Silverlight) but the Wine Netflix-Desktop at least works for all their content.

Antagonizing HBO isn't smart imo. Pretty juvenile comments.

notatoad• 12 years ago

Antagonizing HBO wouldn't be smart if netflix had anything to lose, but they don't. HBO and Netflix have no relationship, and there is virtually zero chance of any HBO show ever coming to Netflix as their relationship currently stands.

They aren't taunting HBO because they want anything from HBO. They're taunting HBO because they want consumers to see them taunting HBO. It's just marketing.

jansanchez• 12 years ago

We also have Hulu+, and have never been required to link with our current cable provider (which we don't have at all).

I personally enjoy both Netflix and Hulu+. They are different use cases. Hulu+ for current shows, while Netflix for the rest. The only thing I dislike from Hulu is the ads.

helper• 12 years ago

The Community Linux flash issue is curious. It doesn't play in Chrome with the bundled Flash player, but it does play in Firefox with external Flash. Its also surprising that Community is the only stream that I have found with this issue.

swombat• 12 years ago

I really want to like Netflix, but in the UK I've now switched most of my movie-viewing to Now TV. Now TV seems to operate on the same model, except they have much fewer of the "movies that hardly anyone wants to see" category, and much more of the "recent movies that you want to see" category.

As a result, at the moment I'm paying for both Now TV and Netflix, but when I want to watch a movie I'm much more likely to go to Now TV, so maybe next time I sign up for those things I'll get just Now TV (or an equivalent player that actually has content licences to good things).

cdash• 12 years ago

I am not sure what content has in the UK but I can tell you that Netflix has become much more focused on TV shows than they have on movies in the US and I don't mean Netflix original series only.

georgespencer• 12 years ago

It just isn't going to happen for Netflix in the medium term.

You have to believe that Google cares about TV and video content. They've made so many moves in this direction: YouTube, movies and TV on Google Play, the deal for Girls (or whichever show it is) to premiere on YouTube before anywhere else…

The challenges Netflix has are three-fold as I see it:

1. They only have enough cash at hand to do, what, five pieces of amazing original programming each year? Six? The halo isn't big enough to make them huge like YouTube is huge.

2. Google has an insane amount of cash. They could really "unify the division" by creating the first truly undisputed king of content streaming (which would just be YouTube + licensed movies and TV shows with a premium version and a heavily ad-supported version). They could also finance new shows.

3. Content owners can see Netflix's share price. As soon as they start doing well the price will go up on content licenses. Unless Netflix negotiate 5, 10, or 15 year terms they aren't going to be able to avoid arbitrary price hikes.

riggins• 12 years ago

Content owners can see Netflix's share price. As soon as they start doing well the price will go up on content licenses. Unless Netflix negotiate 5, 10, or 15 year terms they aren't going to be able to avoid arbitrary price hikes.

this has been claimed for a couple of years now. It hasn't played out that way so far. I haven't looked closely in 6 months but generally their content costs have been flattish rather than a sharp escalation (this is after the ramp up to make their initial content acquisitions).

Furthermore, I think there are 2 reasons why content providers won't be in a great bargaining position.

1. Part of what makes a show a success is the built in audience. Think Friends or Seinfeld ... Thursday night prime time slot used to guarantee an audience in the millions. The networks don't have that advantage anymore. It's Netflix that has a guaranteed audience of millions.

2. If content providers push for major price increases, Netflix has the option of producing their own content, which they've shown they are capable of.

Netflix has been disciplined in their content spending. I don't think content providers will be in a position to change that.

sergiotapia• 12 years ago

My biggest fear is other networks going online and removing their content from Netflix. If it comes to that there's no way IN HELL I'm paying for 5+ online services. Fuck that.

I absolutely love Netflix, let's hope they manage to keep ahold of their catalog.

zackmorris• 12 years ago

I love Dish Network but with them and DirecTV charging upwards of $90 a month for a couple of DVR receivers, they are forcing me to consider an internet-only solution (and Dish started out so affordable!). I just got a rate increase of $5 a month in the mail. I get the feeling though that it's not their idea, that the stations call the shots. So I applaud Netflix for keeping their price so low but wonder how long it will last.

jonathansizz• 12 years ago

I don't understand why Netflix aren't also making their own regular nightly/weekly shows (topical comedy, politics, current events, etc.), such as you find on HBO and Comedy Central. They could make several of those type of shows on a relatively modest budget, and it'd give viewers greater reason to continue subscribing.

samatman• 12 years ago

Topical comedy based on current events from Netflix?

With Kevin Spacey?

http://en.wikipedia.org/wiki/House_of_Cards_(U.S._TV_series)

I feel the idea of releasing the whole 'season' at once is perfect for the Netflix model. No need to drag it out: Netflix knows their core base likes to marathon binge on good TV.

jgalt212• 12 years ago

NFW. b/c the best stuff on Netflix is only available on DVD and not via streaming.

Netflix Is Going to Rule TV After All

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