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.)
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.
" 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.
Good point, but still; the experience is so frustrating that it's actually worth waiting until the entire season becomes available on Netflix, Amazon, etc. so you can watch it in peace.
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.
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.
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.
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.
Yup. The competitive advantage is not the streaming technology. Many providers, including the ones you mentioned, have feature parity w/ Netflix. I have Netflix, HBO Go w/ Time Warner (and their TV app), and MLB.TV. Although those 4 all have the technology, Netflix's competitive advantage is in convenience. HBO Go and TWC requires an expensive cable subscription and MLB.TV has a horrid blackout policy.
It all comes down to sports for many. If Netflix of Google TV begin to seriously bid for sports contracts things will change very soon. Similarly if traditional sports outlets like ESPN or Fox would cut their cord requirement (even at an egregious per-subscriber cost to start off with) the landscape will really start to shift.
> Many providers, including the ones you mentioned, have feature parity w/ Netflix.
Oh really? Netflix is far ahead of the competition when it comes to device support. And the streaming technology plays a lot bigger role than you might imagine, especially when it comes to live content. Contrary to popular belief, this is not a solved problem. Like I mentioned above in another comment, just try watching a streaming NBA game.
Yes really. Can you elaborate on "far ahead" on device support compared to the TWC TV, HBO Go, and MLB.TV? Being able to control a DVR (like in the TWC TV app) or watching live television and easily perusing a guide and switching between streams (like in the TWC TV app or the MLB.TV app) are pluses over Netflix's offering. I have watched live streaming sports without issue over ESPN's offerings or individual league offerings and I find they work well and provide a lot of alternative content, things which Netflix isn't even in the business of having much less having the features for.
I don't think Netflix would have any special insight as to streaming live action such as sports. Streaming and caching content from a movie or TV episode enables additional options compared to live content.
> If you haven't noticed, all of the content companies[1] are doing the initial work
And most of them suck ass. You can't stream an NBA game live without it buffering the crap out of itself.
> if Amazon doesn't run them over.
Based on what Amazon has done so far, it doesn't stand a snowball's chance in hell. They have no understanding of content - their recently released pilots were horrible. You can let a bunch of tech guys up in Seattle make content decisions.
Their insistence at treating their prime streaming like just an aspect of the normal purchasing view is also annoying. If I'm searching through shows, It doesn't help me to see multiple seasons of the same show 'on the shelf,' both SD and HD versions. It just takes longer to find what I want that way.
I would like to have a serious talk to whoever designed the Amazon streaming video interface on the Roku. It shows a grid video selections in rows, then proceeds to obscure most of the selections with the description text. I really can't stand to use it unless Amazon is the only source for that content.
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).
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.
From what I've heard, HBO Go has many technical and content quality problems. Plus they have promised real support for Apple TV for a long time, and only presented crappy non-solutions based on AirPlay using an app that can't multitask. :-P
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.
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.
"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.
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.
Yeah and by and large, it sucks. Until they fully decouple it from their regular cable business it's just not compelling at all.
What is the point of having a nice online delivery mechanism if you're required to have the cable channel to use it for the good content? I mean I like online and all, but if I already have cable and have to choose between the two, I'm picking cable.
The same argument applies to the HBO product. To me, the entire point of having an online offering is to reach more people. If you're immediately limiting your potential customer base to your existing customer base... How is that supposed to really work?
My point isn't about convenience of product. It's about the existence of infrastructure. Dropping the requirement of having a cable subscription is not a technical one.
As far as the actual product goes, I have cable. I still watch ESPN on my Apple TV because the replay functionality is really nice. I don't need to pay for a DVR (or HD) to watch the teams I want to. That's pretty cool.
Streaming on ESPN is mediocre. My streams are poor quality, buffer, pixelate, etc while this never happens on Netflix where I regularly achieve "Super HD."
I don't understand why people think Disney will start their own streaming service when they never started their own cable TV company. Large public companies want to get a high return with as little capital invested as possible, which means they will always prefer licensing their IP rather than owning metal.
I know people who complain about the content Netflix has every time the subject comes up. They don't know why, or understand what licensing is (or means), or the impact of the studios and their business model.
They could buy movies on disc, and get whatever content they want, but they use Netflix more and more instead. So experience does matter.
"They could buy movies on disc, and get whatever content they want, but they use Netflix more and more instead. So experience does matter."
Talk to my wife who searches around Netflix for 15 minutes looking for something to watch and then gives up. Experience can improve the likelihood that someone will use your service, but if the content isn't there, then they'll go elsewhere.
You're comparing the wrong things, we're talking about what happens when Disney, etc. pull their content up from Netflix and set up their own streaming services that just don't have nice interfaces. People will get the thing that lets them watch Avengers 2.
Have you seen what is run on standard cable channels lately?
The cost to create some junk reality tv show (that will still bring in tons of viewers) is remarkably small compared to the cost of the infrastructure.
>> "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.
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.
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.
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.
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).
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.
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 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.
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.
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.
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?
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.
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.
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.
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.
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?
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.
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.
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.
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.
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.)