Is the Netflix Empire Built on a House of Cards?

[gene]

The company that started life as a subscription DVD rentals has built an entertainment empire on award winning but expensive original content on a bleeding-edge streaming service. Earnings statements for Netflix have been rosy as revenue and subscribers grow at an incredible pace. But how much longer can Netflix continue to grow at its present rate? With high powered competitors like Amazon, Apple and Google moving into its market, some analysts think it may only be short lived.

Read: Is the Netflix Empire Built on a House of Cards?

 

[MR.MAGOO]

early on when Netflix was only DVD's I tried it but found it didn't seem to have the movies I was looking for, so I now call it NOTflix!

Now they want me to join for free for a month before I even get to see what they have, no thanks.

 

[lovinthehd]

I have been a suscriber of Netflix since close to their beginning, still a customer for discs (blurays mostly) as well as streaming. I am a movie junkie mostly altho in last few years have binged a few of their series. No other service is as comprehensive so far, especially for the price but I don't need to see the latest releases right away either.

 

[shadyJ]

I have a good feeling about Netflix's future. The contest between these streaming services will come down to who has the most compelling content, just like it used to be between the three big networks. Netflix has a big advantage here in that they already have a major foot in that door because they already have loyal fans of many of their shows. Those fans aren't going to give up on Netflix lightly now that they have been hooked. Amazon has some good shows, but I don't see them having quite as fervent following as Netflix's shows. What does Hulu have? HBO Now has their impressive list of shows. That CBS service only has Star Trek, and one show does not put them in the ranks of Netflix and Amazon. They won't get a whole lot of subscribers for a single TV show. Amazon has a big advantage because a prime membership gets you a lot more than just some streaming TV shows and movies.

I think this will come down to Netflix vs Amazon vs HBO Now. I don't think there are any other serious players. People will only subscribe to few streaming services at the most. Netflix is already a must have. Amazon is already there since so many people have prime membership anyway. HBO doesn't have nearly as much content, but they have people already hooked on their high quality content. They won't be as big since it is a cable channel as well as streaming service. I am sure Disney will cook up something, but they will only have children's content.

 

[jinjuku]

Netflix still has a cost effective, semi-convenient, way of getting content that isn't available for streaming. You can't get a rental DVD/BR from Amazon/Hulu.

 

[panteragstk]

I have a good feeling about Netflix's future. The contest between these streaming services will come down to who has the most compelling content, just like it used to be between the three big networks. Netflix has a big advantage here in that they already have a major foot in that door because they already have loyal fans of many of their shows. Those fans aren't going to give up on Netflix lightly now that they have been hooked. Amazon has some good shows, but I don't see them having quite as fervent following as Netflix's shows. What does Hulu have? HBO Now has their impressive list of shows. That CBS service only has Star Trek, and one show does not put them in the ranks of Netflix and Amazon. They won't get a whole lot of subscribers for a single TV show. Amazon has a big advantage because a prime membership gets you a lot more than just some streaming TV shows and movies.

I think this will come down to Netflix vs Amazon vs HBO Now. I don't think there are any other serious players. People will only subscribe to few streaming services at the most. Netflix is already a must have. Amazon is already there since so many people have prime membership anyway. HBO doesn't have nearly as much content, but they have people already hooked on their high quality content. They won't be as big since it is a cable channel as well as streaming service. I am sure Disney will cook up something, but they will only have children's content.

If Hulu keeps making shows that are as good as The Handmaiden's Tale they may have a chance. They'll have to make quite a few shows to compete though.

 

[agarwalro]

Disney pulling their catalog will be a huge blow to Netflix.

CBS put Star Trek: Discovery behind a pay wall. I guess we're moving towards the scenario where every content creator believes they can float a pay wall and remain competitive. Already streaming service aggregation is a thing.

If only there was a platform for content delivery, with existing market penetration, where the customer could pick a subset from the "universal catalog" and ignore the rest. If only.

 

[sholling]

Will Netflix survive intense competition? Who knows. I enjoyed being a disc subscriber until they agreed to a 6 week delay and then I dropped my disc subscription. I still subscribe to their streaming service and it has far more content than Amazon Prime but it's mostly a handful of good documentaries surrounded by a whole lot of B-grade documentaries and B & C grade movies and old TV shows. With few exceptions their in-house productions, like Amazon and Youtube's Originals are mostly made up of unfunny comedies and comedians, chick flicks, and repeats so who knows who will come out on top. I suspect that it will be the one that finally decides to appeal to middle class flyover country subscribers rather than entertainment industry insiders. Until then it's a tossup.

 

[sholling]

Disney pulling their catalog will be a huge blow to Netflix.

CBS put Star Trek: Discovery behind a pay wall. I guess we're moving towards the scenario where every content creator believes they can float a pay wall and remain competitive. Already streaming service aggregation is a thing.

If only there was a platform for content delivery, with existing market penetration, where the customer could pick a subset from the "universal catalog" and ignore the rest. If only.

I don't know many (if any) people that will subscribe to niche streaming services. I subscribe to three general-streaming services, Netflix, Amazon (only because I have Prime shipping) and Youtube because it comes with Google Music. There is no way that I'd add a third, and as much as I loved Stargate, that I'd subscribe to yet another service. The model that will dominate is signing with aggregators like Netflix and Prime.

 

[lovinthehd]

Looking at this as far as what Netflix may lose with a Disney withdrawal....works for me, hardly watch any of them (there are a few good ones, tho...and will disc be same withdrawal as streaming?). Now, if I had little kids around that might be different, but, again, there's always a disc (and do collect a certain amount of kid friendly stuff as I'm just a big kid still).

 

[agarwalro]

Looking at this as far as what Netflix may lose with a Disney withdrawal....works for me, hardly watch any of them (there are a few good ones, tho...and will disc be same withdrawal as streaming?). Now, if I had little kids around that might be different, but, again, there's always a disc (and do collect a certain amount of kid friendly stuff as I'm just a big kid still).

From personal experience, kid programming is a huge reason for keeping Netflix and I'm sure anyone with kids would be in the same boat. I'd have to sell my car to outright buy the programming.

 

[lovinthehd]

From personal experience, kid programming is a huge reason for keeping Netflix and I'm sure anyone with kids would be in the same boat. I'd have to sell my car to outright buy the programming.

Yeah, could well be, no kids to think about except rare visitors via friends on vacation.....and I've got sufficient on disk to keep 'em happy for a long while in any case. What kind of percentage of subscribers would depart sans Disney....any guesses? Judging mass consumption needs by my own yields little useful info

 

[Johnny2Bad]

Doesn't matter one way or another to me; I'm a subscriber to NetFlix but if it went away next week, I'd find some other option to use. To be honest, if I could get reliable football streaming, I'd be happy with that by itself. I can find movies to watch.

 

[agarwalro]

Yeah, could well be, no kids to think about except rare visitors via friends on vacation.....

Lucky!

What kind of percentage of subscribers would depart sans Disney....any guesses?

No idea. I don't even know if Netflix publishes consumption demographics which could answer that. I'm sure they've got a number internally.

 

[Johnny2Bad]

Yeah, could well be, no kids to think about except rare visitors via friends on vacation.....and I've got sufficient on disk to keep 'em happy for a long while in any case. What kind of percentage of subscribers would depart sans Disney....any guesses? Judging mass consumption needs by my own yields little useful info

Not sure that it really matters ... if you have kids you really can't afford NOT to have cable. It's the electronic babysitter. Buy some Kids movies at Wal-Mart and you've got it covered.

 

[shadyJ]

Not sure that it really matters ... if you have kids you really can't afford NOT to have cable. It's the electronic babysitter. Buy some Kids movies at Wal-Mart and you've got it covered.

Kids can be surprisingly picky about they stuff that they are willing to watch, even very young kids. Not saying Wal-mart doesn't have you covered, but it would behoove these streaming services to have a variety of content for children, and Disney does make some quality children's entertainment.

 

[agarwalro]

Kids can be surprisingly picky about they stuff that they are willing to watch, even very young kids.

+1. This, big time. At 2yo my son had two or three cartoons he'd watch, and nothing else. It didn't matter if it was the same episode for the nth time. By 2.5 he had a preference for episodes too! At 3yo he had a fear/fascination with Jurassic world. So, we've watched it 100 times, not puffing that number.

 

[BoredSysAdmin]

Sorry, but I am almost felt from the chair reading this line

With high powered competitors like Amazon, Apple and Google moving into its market, some analysts think it may only be short lived.

There is only one current serious competitor to Netflix and it's HBO. Both Amazon only starting to realize the hard truth - The Content is King. HBO knew it. Netflix learned it long time ago. Amazon, Hulu and to some extend AT&T (Mr. Mercedes is excellent btw) are beginning to realize this.
I'm not even going to mention Google since they are coming from land of AD supported amature content, popular - yes, but having high production value ? Heck no. They are starting to realize this and turning the wheel toward pro-content, but in process they are alienating their biggest supporters and fans. Good luck to Google, but they have long way ahead before becoming serious professional level original content provider. Yes - Amazon, Apple, Google - they all sitting on big bags of money, but it's not same thing as ability to bring good and original tv/movie content.

The biggest problem for Netflix is losing content like Epix and Disney's content, but they are prepared for it with original content, which as Wayde mentioned, is going to invested as much as $8bil. Quite a big risk for "small" internet streaming "start-up". I guess - they see it otherwise.

Funny thing that everyone talks about ST: D and it's exclusivity in US. Let me remind you that Netflix (International) has ST: D and they paid heavily, in fact so much that it covered the cost of estimated per-ep run. Since then per-ep cost has risen by few mils so Netflix money alone doesn't cover it.

Long time ago Netflix said this : https://gizmodo.com/5980103/netflix-the-goal-is-to-become-hbo-faster-than-hbo-can-become-us
They knew it almost 5 years ago and it's more relevant today than it was back then.

 

[Wayde Robson]

Sorry, but I am always felt from the chair reading this line
"With high powered competitors like Amazon, Apple and Google moving into its market, some analysts think it may only be short lived."

Amazon, Apple, Google and Facebook are the four biggest, most powerful tech companies in the world right now. Microsoft wishes it were back in that list. If either of those companies takes out a patent or simply inquires on another company's price it sends shockwaves through the stock market. The four are often hyperbolized as "the four horsemen of a coming economic apocalypse". Amazon alone is so big it has its own gravitational pull. It is widely predicted to be the first company to pull off a trillion dollar valuation.

If "high powered" isn't a fitting, if understated description for those companies then I guess we speak different languages. Nothing further to say.

 

[BoredSysAdmin]

Amazon, Apple, Google and Facebook are the four biggest, most powerful tech companies in the world right now. Microsoft wishes it were back in that list. If either of those companies takes out a patent or simply inquires on another company's price it sends shockwaves through the stock market. The four are often hyperbolized as "the four horsemen of a coming economic apocalypse". Amazon alone is so big it has its own gravitational pull. It is widely predicted to be the first company to pull off a trillion dollar valuation.

If "high powered" isn't a fitting, if understated description for those companies then I guess we speak different languages. Nothing further to say.

I think you misunderstood me. I'm not questioning financial capabilities of these no doubt technology GIANTS.

I am questioning their ability to CREATE and DELIVER HIGH QUALITY ORIGINAL CONTENT in a short time frame - This what is required to truly make Netflix feel in any way threatened.
Google's Youtube experts in delivery, but lacking other criteria. Facebook is large advertising giant, arguably they are trying to diversify into messaging and VR. There are some video content delivery attempts, but they are minor.
Out of this list only Amazon is currently viable thread to Netflix. They have expertise in infrastructure, networking, CDN as well as in creation of HIGH production value original content.

Could Google, Apple, Microsoft and Facebook get into this market with original content ? Sure they could, but it would take them at least few years to gather talent and create the said content. Just having tons of money is not sufficient. Netflix literally build House of Card based on scientific measured and gathered elements of TV shows which their customer may like. It's instant success was in no shape or form an accident. It takes a lot of insight to build shows like that.