Quote:
Originally Posted by ZodWallop
To me, the Netflix catalog isn't declining, but it is changing. To their credit, they have so much original content to watch that I can't keep up with it. I still haven't watched Wild, Wild Country, Stranger Things, The Umbrella Academy, Altered Cqarbon or G.L.O.W. and now there's The October Faction and The Witcher.
Even if the original content stream slows down (which it has to do eventually) there's enough on there to keep me as a subscriber for a good long time.
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Correct.
Netflix started distributing DVDs via mail, and transitioned to licensed reruns to ramp up the streaming model. Then they started building their own library of exclusives and international content because they new content owners could raise costs unreasonably (an ongoing problem driving cordcutting from cable TV) or pull it completely (remember Disney's VAULT strategy on DVDs?).
They knew content owners would eventually try to disintermediate them and go direct to consumer. So did Amazon. It was inevitable.
Thing is, not all content owners can afford to go direct.
Setting up a survivable streaming service requires a deep catalog of "backlist" shows and movies, plus a steady stream of originals. The latter is mostly tapped out since Disney bought Fox and CBS merged with Viacom. WarnerMedia was ahead of everbody since they inherited tbe Turner treasure trove of content and brands and then merged with ATT because they understood an enduring streaming service will need 10-figure investment in new content *annually* for the better part of a decade. At least five years.
The fate of that market is pretty clear by now: Netflix, Prime, and Hulu got a headstart with tens of millions of *paying* customers. Disney has the Brands and library depth to keep people signed in at their *launch* price. (They've made no bones about the price inching upwards over time as tbeir library grows and licensed content contracts with others expire.) And then tbere is HBOMAX which is intended to convert the vast majority of their 150M cable subscribers to streaming at the exact same price for a giant increase in available content. They too have big brands, nine of them. And a broader library than even Disney.
The newcomer to watch is Peacock. NBCUniversal has a big library but is is, frankly, second tier. Plus they're late to tbe party and starting with no subscribers. They have the hardest row to hoe.
Anybody smaller
iscovery, MGM, LIONSGATE, etc is in a squeeze.
They could try to roll their own. (Discovery has been planning for almost two years and constantly evolving those plans.) Good luck there. They could team up in a coop like Philo. (Their best hope but they're late. And it still will rquire money they don't have.) Or they can simply stay out of the fray and license everything to everybody. Non-exclusive licenses don't bring in as much as they used to but it's better than nothing.
They'll keep on licensing because they have to.
Alternately, they could sell out of the game.
It's getting too rich.
Most are saddled with debt (LIONSGATE), have small libraries (MGM only goes back to tbe 80's because they sold everything older back in the 80's), or both.
Buyers are also limited: Disney and WarnerMedia are too big to escape government scrutiny and woukd be blocked. Ditto for NBCUniversal (Comcast). CBS/VIACOM wouldn't be blocked but is heavy in debt.
That leaves the tech boys: Amazon, Apple, maybe Google.
And Netflix.
Latest rumor has Netflix and Apple looking at MGM. Apple has the money and their need is desperate but the MGM library is small and not worth its cost...to Apple. It won't add enough to their skimpy library. Netflix, however, can afford it and with tbeir bingeing model best exploit their few franchises. STARGATE would be a good match with LOST IN SPACE, SABRINA, WITCHER, ALTERED CARBON, and other SF&F.
Apple woukd be best advised to bite tbe bullet and take on LIONSGATE and its debt with their bigger library. STARZ and ENCORE, eyc, do have 56 million cable subscribers so they'll be buying a fair amount of *paying* customers they can try to transition to streaming.
Not heard of, is Google.
Their YouTube premium and YouTube red have both been underwhelming (despite a couple of decent shows) but YouTube TV is a well-regarded liveTV streaming player and with death of PLAYSTATION VUE they stand to grow. Plus they have the money to buy Lionsgate, Discovery, and MGM. Which they'll have to, to be players.
The problem for all is churning: people will binge and rotate subscriptions so the number of active, paying, subscriptions will always be smaller than their total number of accounts, just as with ereaders.
Churning is a manageable evil for the big boys.
It is also a plus for the niche small fry with a few hundred or even dozens of products living on FireTV and Roku who live off people paying for a month, draining the library, and then quitting. For them churning is tbeir business.
It is newcomers and the medium players who can die by churning.
Not big enough to tolerate churning, not small enough to live by it.
Netflix, Disney/Hulu, and WarnerMedia all have a viable survival strategy. PrimeVideo is an outlier playing a churn-free game and NBCUniversal is late but their model just might play. CBSAA has been muddling along but they're likely survivable because of Trek churners. Get enough Trek shows rotating and they might live. Or sell out. Hard to tell.
Of the rest, only Crown Media looks survivable. They have a service in place, plenty of liveTV streaming deals at reasonable prices and customer loyalty. They could sell but don't have to.
The rest have work to do.
They may have to resort to free ad-supported services like CW/CW SEED and licensing which is viable but will keep them on the fringes.
So, anyway, no NETFLIX is in no danger.
They truly are too big to fail because they are already global: global in content and global in subscribers. They got there "firstest with tbe mostest."
(Plus $13B a year is roughly what their big competitors spend...combined.)