Non stop bad news on netflix. Its not easy to produce such a good content. I really wonder if apple can do it. From technology standpoint it can beat but i wonder on content.
Disney has a chance though.
Last but not least, playing game with lower subscription fare is not gonna work long term for these companies.
Though i see Netflix is being beaten i still feel long term winner would be netflix. The question is by then how much will it drop and regain?
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Also, music is vastly different, and far cheaper, than original content.
But, good point on production cost.
Also, pricing down may mean cannibalization their more lucrative subscription business which may easily backfire.
Not to mention potential price war
1. Yes, Netflix likely will not offer such limited ad plan as I proposed, their focus is rather on content. But itâs a losing battle and Netflix doesnât have the money or resources to compete with production houses, yet.
2. Such a limited ad offering is easy way to bring in more cash.
3. Netflix has about 80% market permeation in American households of cable cutters. Thatâs a lot for advertisers to focus on.
4. Subscribers who would switch from ad free to limited ad offering would be very low. Ad revenue from advertisers is a significant chunk.
5. If Netflix indeed wants to do it, they have the technical smarts and talent who can achieve that. Hulu already does this and it didnât impact their revenue based offering.
6. Reed Hastings has to keep his mouth shut for the investors sake, every time he talks about competition wall street panics.
7. Netflix is not shy about switching the course, remember the 2011 kwikster debacle and stock price crash anyone?
But I think they eventually reached a conclusion that it doesn't actually matter how their content is distributed; their fans are willing to go where ever to watch it. So why give someone else a cut of the pie when you don't have to?
It's the same concept as game companies selling games through their own launchers instead of through Walmart. You basically disintermediated the middle guys cause there was no longer a reason for them.
I think same is happening to traditional media. Netflix will likely continue to suffer unless they can make another big hit again like house of cards. But it's not always so easy to do so
As it pertains to physically shipping goods, thats just a damn hard business to get into and so there's no sense of getting into that business. You can outsource low margin distribution to someone else when you can focus on more value added initiative.
But for digital distribution, it's a different story. Companies like steam and epic, as well as all the other major pub devs pushing their own game launchers and going direct to download has in essence killed gamestop. It's the same as Netflix originally killing blockbuster.
So for the past 10 years, I'll agree that the Netflix scale meant everyone put their content out onto Netflix for maximum viewership and scale. But now that people are realizing that their viewers are die hard fans who will go anywhere to watch their content specifically (or so they think), then people will once again ask, wait... Why do we need Netflix as the middleman again if we can create our own streaming service given the tech is widely available now