Followups: Netflix breaking-the-wheel by resurrecting its social network and reinstating its virtuous cycle
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The Prisoner’s Dilemma Wedge: Netflix’s strategy for startup traction
by Annotote TLDR 2018.01.29
Three’s Company among Shopify, Amazon, and Etsy:
The Janus Rule, the Misjudgment of Solomon, and a critique of Aggregation Theory
by Adventures in Consumer Technology 2019.07.30
Tech’s False Idol: Aggregation Theory and the Netflix Foil
by Adventures in Consumer Technology 2019.11.12
Binge watch together, socially but separately: Netflix Party is a 3rd party browser extension (unaffiliated with Netflix proper) that now lets you stream movies with your friends
by The Verge 2020.03.24
Here’s how it works: you and your friends log in to your separate Netflix accounts. Pick a movie or show to watch, and Netflix Party will sync the playback across your accounts, so you’re all watching the same thing at the same time from your individual accounts. Netflix Party includes a text chat function on the side of the screen (much like YouTube does during a live stream), so you and your friends can react and chat in real time.
As live sports games are canceled due to coronavirus, pro athletes and teams have turned to video game streaming as a means of connecting with fans and finding new sources of revenue
by The Washington Post (WaPo) 2020.04.01
During this new normal, streaming has become something more. It is part coping mechanism, perhaps the only way to maintain a sense of community during the pandemic; it’s also one of the only ways to deliver new content to fans, many of whom are similarly locked in their homes; and it could also be a moment for gaming and streaming platforms to reach new relevance. As the sports world falls silent, esports fill the void…
[T]he number of streamers on Twitch who reached at least five concurrent viewers has jumped about 70 percent, from around 470,000 as of the last week of February to more than 800,000 as of the last week of March.
Amazon’s Twitch is expanding its Watch Parties beta to all creators
by The Verge 2020.04.09
[Watch Parties allow] streamers to broadcast Prime Video content, to all of its partners… Now, you can watch stuff on Amazon Prime with your favorite streamers… the feature is genuinely useful, as it’s a solution to the now-global problem of figuring out how to watch something with other people (without running afoul of copyright claims). Subs and bits are enabled during Watch Parties, so viewers can chat, drop donations, and subscribe just as they would during a normal stream.
The NBA’s new partnership with Microsoft is aimed at creating innovative new ways to engage sports fans as natively as possible, including a vertical social network
by CNBC 2020.04.16
The National Basketball Association will [partner with] Microsoft’s Azure cloud to enhance the online experience for fans… starting in the league’s 2020–21 season…
[T]he league could use Microsoft’s technology to add new features to its website and apps, such as delivering games in fans’ native languages, letting them chat during games, displaying the best camera angle for the moment and showing relevant stats about favorite players. The league also wants to draw on archive videos to augment what people see while watching and roll highlight clips of favorite players.
Amazon launches Watch Party on Amazon Prime Video, a desktop feature for US Prime members to watch content together and chat with up to 100 viewers
by TechCrunch 2020.06.29
UPDATE:
Twitch makes Prime Video Watch Parties, previously confined to top US Twitch creators, available to every creator and viewer on the platform globally
by Engadget 2020.09.02
Disney launches GroupWatch on Disney+, letting up to seven people watch in sync; viewers can react using emoji but can’t chat
by CNN 2020.09.29
Hulu’s Watch Party feature is now expanding to all subscribers, allowing up to seven friends to join one-another, including a “click to catch up button”
by The Verge 2020.12.02
Hulu was first among the big streamers to embrace the co-watch trend during quarantine… Since then, services like Amazon Prime Video, Disney Plus, Movies Anywhere, and Sling TV have begun offering their own built-in solutions.
The best version of every consumer product is the one that’s intrinsically social
by D’Arcy Collican/Andreessen Horowitz (a16z) 2020.12.09
Any product that has a social component baked in has fundamental and asymmetric advantages over competing non-social products in that category: better growth loops, better engagement, better retention, better defensibility. And because social+ companies are network and community driven, that advantage accumulates over time…
No category is really won until the social product is built. Even seemingly entrenched incumbents in big, enticing categories like personal finance and real estate are surprisingly vulnerable to scrappy upstarts if they’ve failed to make their products sufficiently social.
Netflix is looking to hire an executive to oversee an expansion into video games, as it considers options including a Apple Arcade-like games bundle
by The Information 2021.05.21
[T]he company has already dabbled in games — for example, it created a game based on “Stranger Things” with an outside developer — it is looking at boosting its investments in the category… stepping up its efforts to grow beyond traditional filmed entertainment.
UPDATE:
Netflix hires ex-Facebook and EA exec Mike Verdu as VP of game development; plans to offer games as a new programming genre within the next year
by Bloomberg 2021.07.15
Apple announces synchronous social features for its users at WWDC
by Ben Thompson (Stratechery) 2021.06.08
Apple also announced SharePlay, allowing users to listen to the same music or watch the same streaming video services while being on a FaceTime call. While Apple did announce a SharePlay API for third-party music and video services to incorporate, there is no similar API for other video-calling services.
Netflix launches an online store with Shopify, featuring merchandise tied to its shows, expanding its retail business which includes deals with Walmart and others
by The New York Times (NYT) 2021.06.10
Netflix is turning to live events, video games, and merchandising to complement subscriber revenue and engage fans
by The Hollywood Reporter 2021.07.12
[T]he streaming giant wants to work directly with creators on live events that will, in success, provide new revenue streams as subscriber growth slows…
The plan, sources say, is for Netflix to build on its hit franchises — like the immersive Stranger Things: The Experience in LA and New York — with additional live events including the upcoming London-set Bridgerton ball scheduled to launch in November. Such events are done in participation with Netflix and the series creators, who help deliver the authenticity that can justify the pricey ticket fees. A Bridgerton video game and, after Netflix’s virtual Witcher Con on July 9, a Bridgerton fan convention could be on the table, too. Such events will also help keep fans engaged in the long stretches between seasons of the streamer’s hit shows. (Stranger Things, for example, last aired in July 2019 with the drive-through event providing diehard fans and franchise newcomers a fun opportunity during the height of the pandemic stateside.)
UPDATE:
Netflix says its expansion into gaming will start with mobile games, which will be included with a subscription at no additional cost
by The Verge 2021.07.20
Netflix (2021q4): Earnings, competition, and long term value
by Ben Thompson (Stratechery) 2022.01.24
It seemed pretty clear that Netflix executives were a bit flummoxed by the lack of subscriber growth… I suspect that the best explanation for these depressed growth numbers is the most obvious one: if ever someone were going to subscribe to Netflix it was going to be during the pandemic. In other words, those COVID numbers weren’t simply pulled-forward subscriptions that would have joined eventually, they were nearly all of them. To put it another way, Netflix may have pulled forward saturation, at least in terms of the markets it serves well today…
Still, even if Netflix is doing a good job of holding onto its customers, and even if the easiest explanation for its slowing growth is saturation and a pandemic hangover, that doesn’t mean that competition isn’t having an impact…
highly-differentiated highly-produced content is not infinite, which is to say it is not abundant, which means it is scarce. That means it costs money, and the cost is determined by supply-and-demand. And, by extension, if supply is limited and demand increases then the price will increase as well.
SEE ALSO:
A rumored AVOD offering is Netflix finally skating-to-where-the-puck-is proactively, instead of driving-in-the-rearview-mirror reactively
by Anthony Bardaro (@anthpb via Twitter) 2022.04.21
Spotify tests Community, a feature that lets mobile users see their friends’ streaming activity in real time and which playlists their friends recently updated
by TechCrunch 2022.06.22
Netflix is testing “game handles” (usernames/screenames) in some mobile games, and its app code suggests it’s building social gaming features like the ability to invite others to play
by Techcrunch 2022.08.26
Apple TV+, Amazon Prime, Disney+, HBO Max, and Netflix will spend $23B+ in 2023 on original content (+10% YoY and more than 2x 2019’s run rate)
by The Financial Times (FT) 2022.08.28
Bright horizons for Netflix: Demand (in)elasticity; optionality; and competitive advantage
by Anthony Bardaro (@anthpb via Twitter) 2023.05.13
Netflix earnings call (2023q2): Management’s target ratio of content spend to amortization; “sobering realities” about its business model; and outlasting streaming’s late entrants
by Ben Thompson (Stratechery) 2023.10.23
[I]nteresting notes from Netflix’s Letter to Shareholders and Earnings Interview. First, in terms of content costs, CFO Spencer Neumann said[:]
“Assuming no big expansions, we’d expect our cash to P&L ratio of content spend cash to content amortization in the P&L to be roughly 1.1x. So that’s kind of one way folks are thinking about how to model our growth in content spend. As we grow our revenue, as we improve our profitability, we should see both increasing content spend but also free cash flow growing nicely over time.”
Netflix actually set out this ratio last quarter, but it’s a notable stake in the ground in terms of the long-running debate about exactly how much leverage Netflix can get on their content spend. The nice thing about a ratio is that the absolute profitability increases as revenue increases, but it’s a reminder that content businesses are, relative to user-generated content [UGC] based business like social media, fundamentally constrained in their scalability. Still, the fact that the ratio is in Netflix’s favor is also a reminder that it is better to acquire content at a wholesale rate (as opposed to having to license it like Spotify does).
That spend, though, is not just for original content: Netflix was clear that it is open for licensing; the Letter to Shareholders opened with this chart about engagement:
“Success in streaming starts with engagement. It’s our best proxy for customer satisfaction and when people are watching they are more likely to stick around (retention) and recommend Netflix to their friends (acquisition). The variety and quality of our programming — combined with our reach (247M paying households globally and growing), superior recommendations and intense fandom — means we are able to generate higher engagement than our competitors. In the US, for example, we had the most watched original series for 37 out of the first 38 weeks of 2023 and the most watched movie in 31 of those 38 weeks according to Nielsen. Similarly, our share of TV screen time in the US was 8% in September, which is greater than any streamer other than YouTube and we believe gives us substantial room for growth as we continue to improve the quality of our slate…”
[Since 2019,] there have been sobering realities revealed about things like content lifespans (shorter than expected, which means an indefinite need to spend, as noted above), international leverage (audiences prefer local content, which means less leverage on content spend), and limits on pricing (more subscribers churned with the last price increase than expected). Netflix, meanwhile, has moved to address some of these issues, including the password sharing crackdown (expanding its addressable market), and launching an ad-supported tier (making a subscription more accessible, and giving both an alternative to would be cancellers and a clear value proposition for ad-free tiers).
Perhaps the most important factor for Netflix, though, is that… everyone in Hollywood other than Netflix is under tremendous financial pressure, and it’s starting to feel like only a matter of time until an ever increasing number of studios realize they could both cut losses and significantly increase revenue simply by selling [i.e. licensing] to Netflix.
Peloton leans into its social network
by Peloton (One Peloton) 2024.05.10
Starting next week, you’ll be able to search by name and sync your contacts on the Peloton App to find others more easily. Names will now be viewable across Peloton [and] you’ll be able to see your followers’ latest activity, send high fives on completed workouts and more!
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