20 thoughts on “Netflix: a beautiful castle on quicksand”

    1. rdx2, I thought the same thing. 😀 It just seemed to abruptly end. Looks like a random excerpt from a blog instead of an article in itself.

  1. NEtflix will have to change its pricing model to Charge per movie.The current model does not scale. As netflix grows, its licenses get more and more expensive and the constant fight it has with the content providers on pricing. The users don’t add up unless they see the content.

    Ditto for blockbuster – it really became a big hit when Blockbuster started revenue sharing. Refer Hal Varian http://www.sims.berkeley.edu/~hal/Papers/2010/cmt.pdf

      1. Ryan – True at least for now as long as the streaming business is not mainstream.

        As some point , when the streaming business achieves scale – VOD with revenue sharing with content providers will have to dominate.

        the problem in the current model is like Health Insurance. The consumer is an indirect payer for the cost of health services.

      2. I would have to agree with Ryan on this one. The subscription business model does scale and it will always be more profitable than one off rentals through VOD. MSO’s have proven this to be true for a very long time. The margins on VOD rentals are just too low, and I don’t see the studios ever changing that. So even at scale, they will always struggle to match revenue from a subscription business.

  2. Blame it on Youtube.
    What’s the percentage of viewers, who use netflix???
    Thanks to Youtube, you just have to wait for 2 months to see a popular movie.
    The Netflix model in India , Bigflix.. is not a big success.. 3 stores in my neighbourhood hsve closed in the last 18 months.
    Sharing is the new “mantra”.

  3. My reading of the netflix debacle is that you don’t get away with arrogance when you don’t bring customer value. Many seem to miss the point that Netflix’s recent move have angered customers because they broke the previous promises of current plan pricing ad infinitum, and then made it cumbersome to keep content preferences for both streaming and dvd services… Apple has been arrogant also, but the diff is that they have continued to bring customer value. Netflix, with its dismal streaming content selection did not. two thumbs down… (btw relationship marketing is often ignored in situations where the cost of switching provider is low, but considering Netflix, i think that applying relationship marketing basics could have gone a long way)

  4. Kind of in my wheelhouse so… The actual issue is more about the inherent structure of Film/TV as a medium, it’s production and individual linear/planal format is about to change which changes the model in such a vast way to allow for an unobtrusive and wholly different $ model that all of the scaled deliveries of content and social engagement are about to have a very difficult pivot problem. Content architecture and contractual (first in first out) “virtual&cubic real estate” it will create for retail & interface is going to change the game.

    1. Can I hire you as a consultant? I need someone to take my company’s quarterly report and make it unintelligible (yah, we had a miss).

  5. Did anyone notice that Benchmark Capital has invested in VUDU (read: Competitor of netflix).. @om: Have you become so naive to quote this ? Its seems to be loaded with self interested bias..lost hope in you

Leave a Reply to Chris Painter Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.