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Netflix Flexes (stratechery.com)
189 points by jmsflknr 23 days ago | hide | past | web | favorite | 173 comments

My takeaway from Bird Box is that if Netflix wants to make any of their original content one of the most-watched media events of the year, they can do it, regardless of the quality of the content itself.

All it takes is for them to slip it in to people's "custom, curated" lists at a higher frequency, and maybe do a little subtle social-media engineering on Reddit/Facebook, and bam: instant box office smash of a derivative film with a 66% on Rotten Tomatoes.

That's a huge "flex". Big studios could pump hundreds of millions into a decent film and still have it flop. Netflix can take a B-movie and make it a sensation with relative ease. No wonder every game in town is trying to break into this model. Why invest millions on a potential flop when you can engineer one with 75% accuracy whenever you wish?

(though maybe I'm being just a bit too paranoid here. I have to admit some of the Bird Box magic stems from its intriguing concept. guerilla marketing doesn't work so well if what you're selling doesn't seem too interesting)

edit: people are debating the idea of "box office smash" here. I didn't use that phrase to emphasize direct earnings as a result of the film (which is "free" to watch if you pay for a subscription). The article addresses this:

> Secondly, and relatedly, Netflix is counting on subscription revenue. To that end, producing a piece of content that 58% of its subscriber base viewed in a single month is by definition a triumph (and yes, worth ~$700 million).

The idea is that Netflix was able to coerce more than half of its subscribers to watch this film. That's crazy. The result, as we see in the article, is a tidal-wave of Bird Box achieving near-meme status. How does that feel to someone who does not have a Netflix subscription? What big joke/story are they missing out on? For only $14.99 a month, they can win social acceptance by being "in the know" of the current big thing.

If you look closely enough you can see a clear trend regarding Netflix's content strategy. They will continue to make movies like Bird Box, B-style movies and "cult classics" that they can draw big numbers to via their reach and marketing.

Oscar contenders like Roma and Beast of No Nation (a bit early for it's time if you ask me).

Partnerships with foreign content makers to act as an international distributor (BBC produced, Golden Globe Winner, The Bodyguard for example).

Top quality original TV: The Crown for example, fueled by contracts with big name show-runners and writers to produce them (Shonda Rhymes).

And finally, high value syndication targets (Friends, Mad Men, The Office).

Netflix's content allocation seems pretty clear, the next few years will be optimization at the margins.

Netflix has also been pushing anime/anime-style originals. I think this is a pretty interesting strategy, anime is relatively cheap to produce and is niche but has a huge fanbase worldwide.

And some of them are pretty damn good depending on your interest. Theres a few decent mecha ones at least. I am sure they will eventually land the rights to a solid winner. I do like the end result too lots of subs in different languages and I feel like they dub it in different languages too. The best of both worlds for any type of anime fan.

Kill la Kill and One Punch Man are phenomenal!

If you like Kill La Kill you probably also like Gurren Lagann (which is done by the same team).

It's pushing anime but the originals made by netflix are incredibly low quality (really low) and plot is ok at most.

Disclaimer: I watch a lot of animes since most tv shows don't come even close to their plots, soundtracks and epic moments.

Any good Anime you recommend ?

I loved Violet Evergreen. It was very well done as an animation. The others are “your lie in April”. That legit made me sob. I usually don’t get that emotional. (Although not a Netflix original).

Code Geass, Death Note, Tengen Toppa Gurren Lagann, Shingeki no Kyojin, No Game No Life, Steins; Gate (these are top notch) Boku no Hero Academia (Season 1 and 2), Sword Art Online (first 13 episodes, maybe 25, but after that is terrible), Full Metal Alchemist Brotherhood, Full Metal Panic (season 1, FUMOFFU, Season 2). Psycho-Pass, Made in Abyss, Accel World, Ga-Rei Zero (these are just amazing, but not top)

Be careful with FUMOFFU, leads to death due to laughter

They cover a wide variety of range, not all of them might be of your taste. You also need to get used to some things that are Japanese culture in animes (their way of being fun, their way of being embarassed by stuff that is not in your culture and so on).

Insane plot (like REALLY incredible): - Code Geass - Death Note - Steins; Gate - Shingeki no Kyojin (not completed, season 4 coming soon) - Made in Abyss (not completed, season 2 coming soon)

Epic (you feel hyped): - Sword Art Online - Full Metal Panic - Tengen Toppa Gurren Lagann (this anime is amazing, but I recommend watching it only after you've watched quite a few animes. Rewatching it leads to improvement. It's like when you try wine for the first time and it sucks, then it turns great) - No Game No Life - Boku No Hero Academia - Accel World

Laugh: - Full Metal Panic FUMOFFU (requires watching the season 1 first)

This list is purely based on my taste, but I watched over 200 animes (lot of bad stuff too, sadly), so for a beginner it's a good baseline.

Good plot (not like the insane ones, still good): - Psycho-Pass (AMAZING soundtrack) - Ga-Rei Zero - Full Metal Alchemist: Brotherhood

I feel like Castlevania is a really cool take on Anime. It has a different style than the usual Anime and the fight scenes are amazing. I was surprised it is actually any good.

Castlevania backgrounds in season 1 are really ugly, the animation is poor. Season 2 did some good upgrades to backgrounds and the fight scenes where surprisingly good. I think they used the whole budget for that, because I was surprised by how good that looked.

The plot was interesting, I love castlevania, but the quality is still incredibly low from my point of view.

I think of Shingeki no Kyojin, that destroys Castlevania quality by so many levels...

I was really disappointed in the second season. It felt like it suffered from the usual problems of the second season of a lot of netflix originals I've watched.

For castlevania in particular, the art and animation really declined between the first and second season, the tone and atmosphere seemed totally different and the story just kinda went offs the rails.

I thoroughly enjoyed the first season, it was one of the best video game adaptations i've seen but the second season just didn't quite do it for me. It just felt rushed and cheap.

Gantz: O is CGI but oh my... It's amazing.

Death Note was fantastic. Much better than I expected after reading a synopsis of the premise.

Death note is almost a reverse bird box.

Bird box has an excellent premise, which turns out to just be a hook on which to hang some character development (I did quite enjoy it though).

Death note has a really derivative premise, and then goes nuts drilling down in to the exact mechanics of how such a thing would work - there's no deus ex machina (apart from the literal god of the plot), instead it plays within it's own rules very exactly and never cheats the audience, instead introducing very clever "hacks" to its own system.

Try Akame ga Kill, love the action sequences

Code Geass and Death Note were the best for me.

> they can do it, regardless of the quality of the content itself.

Yes they can do it but, not without consequences. I thought Bird Box was pretty lame and given a dozen experiences like these, it'd completely destroy their reputation for putting out decent content for me, and I'd unsubscribe in a world where non-original content was an important factor. (and looking at the media landscape, with content companies creating their own platforms, or publishing on competing platforms, that world is becoming more and more a reality).

It's a bit like saying that Apple can create a big software hype by pushing an iOS 13, just by pushing it as a notification on 1.3 billion iOS devices. But if iOS 13 is complete rubbish, they can only perform that 'trick' a few times before they lose customers.

That plus, one can wonder if they can actually do it. Bird Box indeed took on meme status, me and my gf only watched it because it showed up as a joke on our feeds about 20 times and we had nothing better to do one night while eating food and decompressing from work. There's plenty of netflix content that pretty much bombed, despite showing up for weeks on end on the Netflix front page whenever I logged in. This felt more like the Flappy Bird of movies, a gimmick, a meme, not the next Harry Potter or Game of Thrones that turns people into long-lasting fans of your content.

From an investor’s perspective, this is principally why I have never liked Netflix’s content creation binge. How much of what they are producing has any long-tail value for their subscribers? The same can be said for the studios, and I suppose we live in a world now where content creators need to stream, but why not develop the tech and seek monopoly rents from Disney, Paramount, et al when they need to stream?

Is digital content streaming that simple that there is no value in creating defensible IP? Or is it more a function of dumb data pipes which do not favor the smartest content distribution so there’s no need for that investment?

I don’t think I buy this analysis. In what sense is Bird Box a “box office smash?” Only Netflix can know the impact the film made on their bottom line, and even that internal analysis is difficult to do, especially in the short term.

In other words, I’m saying that yes, Netflix can fairly easily promote a film and get millions of people to watch it, but that doesn’t mean they have a magical sustainable model. If they were to consistently flex this muscle with content people don’t like, it’s pretty obvious things will turn out badly for them.

>In what sense is Bird Box a “box office smash?”

the article you're commenting on makes a pretty thorough case for why it is a box office hit.

There’s a difference between content people “don’t like” and content with a mediocre, but broadly acceptable level of quality.

It seems like the real magic is the capability to make a particular piece of content the “thing that prople talk about”, and so you watch it just so that you’re able to talk about it in conversation, because it’s part of the social consciousness.

What I also find interesting is the fact that Netflix doesn't necessarily even need the "flex" to succeed. Their push on bird box could have failed miserably, and they really wouldn't have suffered greatly, whereas Disney's push of A Wrinkle in Time probably hurt, since the movie ultimately flopped and their only chance to recoup costs was after the huge investment.

Netflix's goal is quite distinct from much of its competition. In simplistic terms, their goal is to release enough compelling content to keep existing subscribers subscribed and then hopefully entice new users to sign up more than old users quit. These "flexes" I would assume are primarily for the second category. If you make something enough of an event, with subscribers talking about it all the time, maybe non-subscribers will think they are missing out and take the plunge. If that fails, however, they only really lose out on the marketing costs, since it's very unlikely to affect the existing subscriber base at all.

Yeah... I mean, when this switch occurred (away from having a wide selection of classics towards being more of a cable channel with their own custom content) I canceled my subscription.

I switched to amazon video... I can't say I'm always thrilled with the video quality, but amazon video usually has what I want to watch, and they make watching it low effort (They usually charge me a few dollars to watch it, but if I'm going to take two hours to watch something, a few dollars is the least of the cost.)

I mean, one could argue that I'd be better served by the netflix disk service, but I can't reliably predict what I'm going to want to watch ahead, and I don't have a convenient device for watching disks in the gym. (I know they exist, and I used to have one. But the kindle fire is a lot more convenient.)

Amazon video has some nice content but their streaming quality is dogshit. For first 10 mins I get pixelated video and then it catches up with SD. Proper HD is a hit and a miss. Also their App for vizio TVs is so bloated that it crashes the TV after a couple of episodes.

Netflix on the other hand has their tech together. Beautiful streaming and lightweight responsive app.

Please Amazon, pay your Engineers well and make an app that doesn’t crash at the least.

>Beautiful streaming and lightweight responsive app.

You seem to be forgetting the downright user hostile UX, though maybe not as user hostile as Hulu and Amazon and everyone else

Amazon has one huge problem for me: Language. I'm in Germany. I do not want dubbed movies/shows. I need English subtitles (translated subs are useless but I need subs to understand what's being said during loud scenes). Amazon usually (less than Netflix though) has OV, but subs are almost exclusively in German.

Netflix, on the other hand, has almost everything in English with English subs (exceptions are foreign language shows and most anime)

Of course, it doesn't help Amazon that their interface is atrocious and that they have ads. (Well, I mean Netflix is working towards making their interface worse, but for now, they are still miles ahead)

If I wouldn't get Prime Video for free with my normal prime subscription for shipping, I'd never use it. I barely ever use it as is.

Amazon has issues with language, and I imagine some of it is licensing, but like several times I've done the "try to learn a foreign language by reading the same book in two different languages" thing, and it's really hard to do with the kindle. Like spanish and french and Japanese are mostly just not available to me on my US amazon account.

I mean, I can get an amazon.co.jp and amazon.fr and amazon.es account, and tie them to different kindles, but each time I want to switch kindles, i have to wipe the thing, and get rid of my english books.

I'm totally willing to pay a premium for kindle convenience, and deal with not being able to loan books so easily, etc, etc, the kindle walled garden actually works really well for me in English but once you move out of English, it's just not convenient anymore.

Yeah, Amazon reminds me of Google a few years ago: Language settings are a clusterfuck. My Amazon.de is in English, Alexa and generally digital accounts are connected to Amazon.de (otherwise I'd lose prime video and prime music without paying twice).

English books work fine, but for some reason, I can't add skills while Alexa is in English. I need to switch it to German, add skills, switch it back to English for it to work.


> "...if Netflix wants to make any of their original content one of the most-watched media events of the year, they can do it, regardless of the quality of the content itself."

birdbox isn't the first promoted original content. it certainly drives success, but ultimately to get 45 million views, probably more than 2x all of who have ever seen game of thrones (16 million is their highest rating ever), is big.

I did think the movie was kinda derivative, a mix of the happening and vanishing on 7th street, but its still a must watch if you are into horror.

every game in town is 2nd guessing their models, because they are extremely outdated. Comcast's (NBC etc) entire model is based around market share - broadcast television. Hollywood is around big box office high spending action movies to make global sales. These is fine in some senses, but it means there are types of content we havent seen much, and while Netflix could satisfy niche customers, it was generally thought that it couldn't compete with large budget content producers. Now maybe it can, and that requires content providers to re-think.

>"The idea is that Netflix was able to coerce more than half of its subscribers to watch this film. That's crazy. The result, as we see in the article, is a tidal-wave of Bird Box achieving near-meme status. How does that feel to someone who does not have a Netflix subscription? What big joke/story are they missing out on? For only $14.99 a month, they can win social acceptance by being "in the know" of the current big thing."

for the longest time, ironically this has been hbo, especially with game of thrones. i feel like they must be paying reporters lots of money to go on about it so much, because its not really watched by that many people - compared to how much its talked about.

I agree with your comment in general but just wanted to be nitpicky over this part (this is HN after all)

> probably more than 2x all of who have ever seen game of thrones (16 million is their highest rating ever)

I don't think that's an accurate measure for GoT as it's probably the most pirated TV show ever, that 16 million figure you quoted is people watching on HBO only. Those of us outside of the US either watch it on a different network (e.g. Sky in the UK) or just pirate it.

GoT would have a huge figure if hbo did international releases via Netflix. DC released Titans on Netflix international. I saw heaps of people streaming it on their phones via Netflix on the train. If GoT was on Netflix I suspect piracy would drop a lot (not completely cos people will always pirate)

>All it takes is for them to slip it in to people's "custom, curated" lists at a higher frequency

Slip it in? I feel like Netflix beats me over the head with their own content even when I'm looking for something else.....

> instant box office smash

How is a film with literally $0 at the box office and “instant box office smash”.

Sure, if as many people as watched it paid for full-time tickets at a theater it would have been a stunning box office, but all that proves is that more people will pay a $0 marginal cost than the cost of theater tickets. Which we already knew.

I wonder when people start noticing. For me their content is just mediocre. When you think about it, creating a real masterpiece is very hard and requires a combination of talent, taste, luck, investment and so on. It doesn't happen just by pushing something as "recommended".

Here's the secret to Netflix:

A "masterpiece" is in the eye of the beholder.

A masterpiece to some is not to another.

Roma is one example: it clearly is masterfully done. Film critics love it. I loved it and it resonated with me. Have you seen it yet? Maybe you think it's "mediocre".

I liked Bird Box because it was apocalyptic and dealt with the downfall of society, a common theme in this genre. I don't care if anyone else liked it or didn't, the film was made for me. I see Netflix just released Kingdom. I have loved it so far.

I could list dozens of shows and movies that I have been extremely thrilled with. Will everyone else? I. Don't. Care.

As long as Netflix keeps pumping in the fantastic content, people will continue to subscribe.

I think you just need to look harder in Netflix. Try some British shows like Marcella or The Bodyguard.

That's exactly it, they can exploit the efficiencies of personalized masterpieces. Theaters and other pre-packaged distribution channels can't.

Netflix only has to make a crap load of content available to cover all the content space. The average quality according to any particular user doesn't have to be good if their recommendation engine can find your niche. Think what the average quality of YouTube is.

I agree. I'm always surprised by the number of people I encounter who have negative opinions of Netflix's original content, both online and in discussions in person.

I've been very happy with Netflix's originals and think they're top-notch. They have actually solidified my subscription--if they continue to produce shows at the rate and quality they have been, they have a customer for life in me.

Yes, I agree, but you can’t do that too often. People will eventually stop trusting your recommendations. I experienced something similar with their B-series that they highly promote. I stopped after watching 1-2 episodes. Now, I don’t even care to start anymore.

My takeaway from Netflix:

- None of the blockbusters are available,

- Instead, you’ll find a pale B-series copy, oftentimes with plain cringy actors.

Seeing memes on facebook/9Gag, this impression is quite popular in teenagers too. And that’s a very, very bad reputation to have.

It was almost amazing how popular and terrible that movie was. What’s gonna be next, a monster where if you smell it you die? It was just another blatant example of how you can get people to mainline the kool-aid with social media, marketing, and Fear of missing the current big thing.

It wasn't a terrible movie. It was reasonably well constructed and hit most of the right beats. But for middle-brow entertainment it's a perfectly good example of a monster movie.

You may be getting bored of this trope (DON'T USE THIS SENSE OR YOU DIE) but that doesn't make the individual films terrible.

It was mediocre and ridden with plot-holes, even by the (very forgiving) genre standards.

It was a great movie.

I'm much more likely to give an unknown movie a chance sitting on my couch than I am making an effort to go to a theater. I will pretty much give anything a chance for 15-20 mins streaming, and have no qualm turning it off if I just don't like it. I have found some decent things this way, and just stop watching stinkers (more than I've enjoyed).

I believe this is has a huge portion of Netflix's ability to get tons of people to watch their content. Fish in a barrel, trapped audience, whatever cliché you prefer. Of course I agree with the hype machine and self-promo within their apps as you've described as well. Combined together, it's a powerful marketing/promotion result.

To be fair, big studios have to convince you to pay to go see a film, Netflix just have to convince you to watch it “for free”

Well, with our AMC stubs pass my wife and already pay monthly to see up to three movies a week. We are just as likely or not likely to go see a movie as we are to watch it on Netflix. The cost is just our time either way.

> Netflix was able to coerce more than half of its subscribers to watch this film

What definition of 'coerce' are you using? I'm a Netflix subscriber. I saw this thing popup in my feed. Had a glance. Read some articles about it. Doesn't sound overwhelmingly compelling to me. I've added it to 'My List' but keep finding other stuff to watch ahead of it. I suspect it will end up getting removed from my list without having been watched. I guess I'm in the other half of Netflix users?

You should watch it if you liked a quiet place. It's good.

Indian Netflix and Amazon prime are making originals that are border line porn with no story or acting or what so ever. They know one simple thing. Sex sells.

Do you have specific examples in mind? I've really liked most of their original content so far, like Sacred Games, Mirzapur, Rajma Chawal, Selection Day, etc.

What are those originals? I haven't come across such content made specifically for Indian viewers as you imply.

They just released Polar which is just a sequence of torture and gore scenes. Nothing else.

> The idea is that Netflix was able to coerce more than half of its subscribers to watch this film.

How is this different from any other Netflix show/film? They can pay for marketing and force it to be recommended for all users, but that's about it. The difference is that Bird Box had a lot of viral potential and turned into a meme because of its content, not external factors.

They did more than just “a little reddit/facebook”, there where more posters in busses/metros/buildings than for any other single movie everywhere. They went big on all types of add spending, in addition to pushing it on their own platform.

Netflix can push trash to all their viewers, but eventually if you push too much trash you lose your viewers. Their current model can’t work long term.

Are you implying that bird box was not a good movie? Because it was great.

I think the implication is that it was a copy of ‘A Quiet Place’ which was a great movie. If you saw ‘A Quiet Place’ first ‘Bird Box’ was not great and left you wondering what all the hype was about.

People keep saying this, but I don't think it's particularly true, at least for me. I thought A Quiet Place was one of the dumbest movies I've seen, and that the weakness of the monsters would have been obvious once it was determined how they hunted, if not found completely incidentally through normal attempts at fighting them. It wasn't possible for me to suspend my disbelief because the movie outright uses the very thing I was saying "Seems like X would be effective on them, since they hunt using sound" about 30 seconds into the movie. Even ignoring that, A Quiet Place is about the monsters having mastery over a sense that we share.

Conversely, Bird Box is about robbing us of one of our senses. In one movie, you have to be quiet - you are robbed of a form of expression. But you can still see, you can still hear, you are attempting to hide. In the other, there is no attempt to hide, at least from the monsters or force or whatever you want to call it. You just have to deny yourself one of your most important senses to be safe.

They're both set in a post-apocalyptic world, or at least partially so, but that's hardly unique to them or something A Quiet Place invented.

I thought A Quiet Place was a bad movie with a flawed premise that prevented suspension of disbelief due to just how ridiculous the premise was, and then totally failing to subvert the ridiculousness. I saw it long before I saw Bird Box. I didn't think Bird Box was a great movie, but I did think that it was significantly more enjoyable than A Quiet Place.

Its not fair imho to underplay the movie itself. Maybe it wouldn't have done as well if it wasn't marketed as hard, but I didn't tell my friends about it because Netflix made me.

Bird Box was one of the best horror movies I've ever seen.

I'm going to be really, _really_ smug here, but you should probably branch out in your movie watching if Bird Box was the best horror movie you've ever seen.

This is the most troll comment I've ever seen on hn

All the signs indicate that Netflix has become a user hostile company that is prioritising ongoing user engagement and stickiness over their users needs.

It's starting to remind me of another company which at one point in their evolution prioritised user engagement over everything else – Facebook. Once this occurs, it is a long slippery slope which leads to a series of user hostile internal decisions which ultimately leads to the user and their privacy becoming the product.

When you actually pay for Netflix and this is their modus operandi it leaves a large opening for a competitor with a more user-focused approach to come in and gain marketshare.

A few examples of how Netflix is prioritising engagement over their users:

- Auto-playing shows once a show has finished (this leads lazy users unnecessarily watching more Netflix)

- Promoting Netflix shows above third party content, irrespective of quality. This prioritises what's best for Netflix instead of promoting the best content for the user.

- Algorithmically modifying the poster frames / thumbnails of shows to be more appealing to users. Again promoting engagement and misleading users of the true content of the show.

- Removing the ability to easily see the complete catalogue via comprehensive categories, which enhances the reliance users have on algorithmic suggestions

I'm sure all of this has been tested in Netflix and they can show that these approaches increase stickiness and engagement. Stickiness and engagement is not what is in the users best interest however and over the medium and long term I think it will be detrimental to a better measurement which is user satisfaction.

> Removing the ability to easily see the complete catalogue via comprehensive categories, which enhances the reliance users have on algorithmic suggestions

To me, this one seems counterproductive to both Netflix's and the consumer's shared goal of engaging in interesting, new content. I've had occasions where I've signed in to my "guest" profile and seen media that never appeared at all under my main profile, and have enjoyed watching it, where at the same time my main profile has felt a bit stale.

Netflix might have confidence in their all seeing all knowing algorithm, but with myself as a single data point, it has sometimes failed to suggest things that I've found interesting.

Its prefiltering or even conditioning users. If you are like me and generally have a very specific idea of what to watch from a preestablished curation funnel, you will find Netflix provides very little value. But if you just wanna sit down and watch whatever Netflix offers up to you, you will end up being a much simpler user to cater to. All they need then is a large volume of things that are vaguely good and vaguely similar to what you like. But you might not end up wathing what's actually the best.

I think their worst decision of late is to include auto-playing "trailers" (with sound!) when you pause for more than a second on a title. Between that and the lack of a decent "browse by category" interface you mentioned, I rarely bother using the TV UI to discover content. Googling "what's good on netflix" works much better for me.

At least you can still disable the auto-play next episode "feature".

God I hate the automatic playing of trailers. I usually mute my receiver so that I can peacefully browse and read through descriptions only to find out that there’s nothing on Netflix I actually want to watch.

> auto-playing "trailers" (with sound!)

I've read about this a few times. If you disable it once, does it get disabled permanently? Because Netflix (unlike the Amazon Prime Video ads) never plays trailers with sound for me.

> auto-play next episode "feature"

I'd certainly call it a feature. I'd hate having to manually click every time I want to see a new episode.

My TV's Netflix app doesn't have an option to disable the auto-playing trailers, or even just their sound (short of muting the TV). It's quite annoying.

ah, okay, that makes sense. Though to be fair, that sounds like a shitty app (one of many reasons I have a dumb TV).

Are you able to disable auto-playing trailers, or are you just using the web interface or a smartphone/tablet that don't have this feature in the first place?

I have a recent AppleTV, which doesn't have any way to disable auto-playing trailers. Same for my previous STB (Roku). This is a somewhat new feature, so some older STBs and Smart TVs don't have it, but that's just because they can't be updated to the latest version of the Netflix app.

You can disable auto-play next episode across all interfaces and devices in the settings on netflix.com. I just wish there was an equivalent switch for trailers.

Never seen a function to disable trailers completely (my dumb tv is a large, wall-mounted 3rd computer monitor, so I'm using the web interface), but at least they don't play sound which would probably make me cancel my Netflix subscription.

I feel like that "feature" saved me from Bird Box, at least; I turned on Netflix, turned my back on the screen to focus on preparing food, and found out there's a level of painfully bad acting that comes across through sound alone.

While the psychology field is rife with poorly done studies, unreplicated studies etc., they have a decent idea regarding addiction and the mind.

It would be tremendous good will if Netlifx took insight from psychology and applied it to their customer's mental health _rather_ than for the opposite, in the form or binge watching and engagement. Otherwise their motive is not distinguishable from that of opioid merchants.

I disable auto-play. I prefer the other changes, though, especially the modified thumbnails. Several times I’ve watched something because a thumbnail made me realize a certain actor was in a show. More generally, though, if I’m a customer, and “engagement” keeps me wanting to subscribe, is it bad if Netflix gets me to use it more in a month? Assume there is nothing wrong with watching TV.

> Algorithmically modifying the poster frames / thumbnails of shows to be more appealing to users. Again promoting engagement and misleading users of the true content of the show.

But it's not necessarily "misleading". Eg. if I like actor A and you like actor B, and both are starring in the movie, showing us two different posters with actor A and B respectively doesn't really mislead neither of us. With posters it's always "blind men and an elephant" anyway.

For what it's worth, I recommend the RateFlix extension for Chrome. It augments Netlifx UI by showing IMDB and Rotten Tomatoes ratings next to the titles. It makes it much easier to dismiss most of the trash.

> > Algorithmically modifying the poster frames / thumbnails of shows to be more appealing to users.

> But it's not necessarily "misleading"

I suspect GP was talking about when Netflix was accused of displaying different posters based on race in an attempt to manipulate and mislead[0]:

> Rather than showcasing its two white leads, the poster for Like Father instead suggests to some subscribers that there are major roles for African-American actors Blaire Brooks and Leonard Ouzts

[0] https://news.sky.com/story/netflix-deceiving-black-users-wit...

How does Netflix know what race I am?

Having dedicated nearly a decade of my life to a startup competing in this space, the OA is right about Netflix's superior strategy when it comes to user experience and content production. Netflix surged ahead of the pack because they focused relentlessly on the quality of the streaming experience while all the legacy players were focused on deal-making. In other words, while Netflix was building a solid video delivery platform, the rest of the industry was fumbling around with biz dev deals like TV Everywhere that have a very low UX ceiling in the best-case scenario.

However that's the past now, and the OA is missing a few trends:

First, Netflix will not maintain its UX lead at the same level for long. Video streaming like all technology is commoditizing, the experience will get better and better from non-tech companies. Meanwhile Netflix is continuing to plow down this path of algorithm-driven engagement and ramming stuff down people's throats with auto-play, bad search, and other dark patterns. Given the current cultural zeitgeist (eg. Facebook backlash), this isn't going to end well if they don't change course.

Perhaps even more important is the fact that Netflix has a long way to go on the production side. There's a lot of volume of Netflix productions, but not a lot of quality. This is where the OA underestimates Disney—their content is way broader and better than Netflix, and people care a lot about that.

Netflix's experimental Interactive content and Reed Hasting's comments about Fortnite also give me pause. This is typical SV-style next-big-thing thinking, but it also represents taking the eye off the ball. Video games are video games, Netflix doesn't know shit about them, and if you ask me they are better off focusing on their core competency versus trying to build a moat with a gimmicky concept.

5 years ago I would have said Netflix has a better chance at becoming a great producer than Disney has at creating a great streaming experience, but now I'm not so sure.

>video games are video games, Netflix doesn't know shit about them, and if you ask me they are better off focusing on their core competency versus trying to build a moat with a gimmicky concept.

The point wasn't that they should compete with video games, or enter the space.

The point was that in the war for attention and engagement, netflix sees better competition from non-tv streaming services than it sees from other tv streaming services. It was a dig on HBO and Disney, not a suggestion for a new business venture.

Go re-read the whole paragraph instead of taking things out of context. Netflix Interactive content is the gimmick I was talking about, not literal game development.

The OA is also a good Netflix show https://en.wikipedia.org/wiki/The_OA

Uncompelling ending has by now become sort of a trademark of the (otherwise original and highly captivating) productions involving Brit Marling.

I can see why people hated it, but I like things I can't predict.

Have to wait for S2, being edited currently I think.

I also liked the end of Lost, HIMYM, Quantum Leap, Mad Men, and BSG, so I'm probably just weird.

I've never even watched The Lost - and neither Quantum Leap nor BSG, for that matter.

The ending of HIMYM was awfully contrived.

The ending of Mad Men, however, was thought-provoking.

Brit Marling had a good ending in "Another Earth", but both "The East" and "Sound of my voice" copped out with cliches - imho.

Arguably getting the ending right is among the most difficult parts of the job.

I wouldn’t be so sure about that.

Redbox seems to be very successful with games (the redbox in my neighborhood is typically sold out of games by 7pm, daily), and there’s a deep inventory of quality games that are cheap in comparison to video and can consume many hours of engagement.

Apple’s short-sighted, dependence on skinner-box free to play games demonstrates a hunger for zero marginal cost entertainment. The production cost for casual games is near zero; If Netflix could offer quality product to fill that hunger without the casino aspects of the AppStore, that’s a huge business.

But what attracts people to the Skinner box games is the fact that they are Skinner box games. coughClash of Clanscough

I agree Netflix is trending towards failure, but I couldn’t disagree more about why and the path leading them there. Netflix is and has been the least attractive of these services for a long time, specifically because other platforms have far expanded inventory and integrate the ability to instantly rent or buy additional content not directly included.

Ultimately what everyone wants is a super easy interface to pay for precise a la carte content, never bundled, never subscription-based. If a given person wants to buy everything from HBO, they still could, and maybe could get a discount for subscribing, but nobody wants to be forced to subscribe to watch just a handful of content items.

It doesn’t matter if it’s Disney streaming, Netflix, Premier League soccer, or anything else. It’s clear rent-seeking to create walled gardens of content only unlockable by bundled subscriptions, and the clear consumer drive existentially threatening the TV industry is that all anybody wants is a dumb pipe with an easy interface to individually purchase each content item on its own merit, flat out.

Many streaming services, particularly Amazon’s, offer this to a way higher degree than Netflix, especially in terms of sports access and new release films.

Netflix is betting that it can create locked-in content that will compel people to stay subscribing, but I think this is a long-term failing idea. Bird Box is a great example: really poor production, sloppy writing with contrived villains, lowest common denominator stuff. Stranger Things? I couldn’t see one reason to care about it. Not exceptionally bad, just overproduced blandness. The gimmick of making things into viral phenomena is not a stable business plan in this area.

As prices rise, Netflix just becomes another HBO. A walled garden of content, except HBO actually makes good television and knows how to do it. Netflix is trashing its own brand with mindless crap. It’s network quality for premium add-on prices. Especially if economic hard times hit, this is exactly something people are going to realize they can live without.

Ultimately what everyone wants is a super easy interface to pay for precise a la carte content, never bundled, never subscription-based.

I 100% do not want this. I want to pay for one subscription to get all the media I want (music, tv shows, movies, books, etc). And I don’t care at all about ownership. I’d pay $50-100/month for this subscription, and we’re getting close if you don’t mind cobbling together a half dozen subscriptions and using a bunch of different apps.

That's expensive if you don't watch much TV. I just watch sci-fi shows and wish I could put my money just towards those types of shows. My perfect subscription would be a mix, where I pay a small fee per month but can try out individual shows. If I like the show I'd pay for the rest of the season.

For example Amazon now has The Expanse, Starz has Counterpart, Netflix has Black Mirror and I also liked the new Lost in Space. Hulu has... Future Man? CBS All Access has... the ability to ruin Star Trek, so I might want to watch that train wreck.

Anyway if there was a cheap subscription like Amazon Prime which allowed me to try out a couple free episodes, then pay $3 per episode that would work. That way I feel like I'm supporting the specific shows I want to see.

You start by saying you don’t want a unified interface where you can get exactly the content you want, then your very next sentence is that you want a single unified interface to get exactly the content you want.

It sounds like you specifically do want a single interface for a la carte content (note: this has nothing to do with ownership vs restricted access), and you currently achieve something like this with a combination of subscription products that bundle a bunch of content you do want with a bunch of other content you don’t want but also don’t care about.

A situation where the price is broken down to individually activate just the content you want and not the content you don’t would offer exactly the same experience but with less irrelevant content and you’d only pay for what you choose to consume.

In other words, the concept of “I pay for one subscription and get exactly and only all the content I personally want” is equivalent to a unified portal for a la carte purchasing.. activating an on-going payment for ability to see Show A and never activating the same payment for Show B which you don’t care for. The “subscription price” is just the total price of your personal a la carte activations (be they ownership purchases, rentals, or recuring payments to license access to that singular content).

At any rate, your comment here is explicitly contradictory.

You’ve misread my comment. The unified interface part is not what I objected to.

I explicitly do NOT want to pay a la carte. I understand what you’re saying about only paying for what I consume and not paying for any irrelevant content.

And yet, I prefer a subscription, even if the total cost is higher. I don’t want the cognitive overhead of constantly trying to decide if it’s worth a little bit of money to purchase or rent a specific piece of content. I’d much rather pay a flat fee once per month for all-you-can-consume access. If we were talking about something very expensive, then my position might differ, but in the grand scheme of things, this is relatively trivial, so I’m happy to pay a few extra bucks to not think about it as much.

> “I don’t want the cognitive overhead of constantly trying to decide if it’s worth a little bit of money to purchase or rent a specific piece of content.”

But you already engage with this decision-making overhead when deciding what to watch and not watch. It’s built into any viewing system whether it’s all-you-can-watch after entry in a portal or not.

Also I hardly believe you never purchase on-demand content at all, especially since no combination of subscription services currently covers everything, and large chunks of content still can only be purchases in an on-demand fashion.

> Ultimately what everyone wants is a super easy interface to pay for precise a la carte content

The success of Netflix, Spotify, and even TV itself seems to show that a large number of people don't want to self curate, and would prefer to consume content curated by a third party; even if the quality suffers, the lower effort expended might make up for it.

You have some good points, but I'm not sure 100% a la carte at prevailing industry prices is really what people want across the board. It gets expensive very quickly, and a lot of times people do just want something free to veg out on. The perceived value of a subscription has to do with what is actually in the bundle, and this is where we can both agree Netflix is behind the curve.

This is somewhat true except Spotify and Apple Music are absolutely clobbering purchases of à la carte content, such that I think you would have to put the individual prices of media incredibly low for people to get over the psychological hurdle of shelling out for it, even if in the long run it would be cheaper to buy.

I’m not sure I agree, I think it’s more of a technology problem syncing owned music between devices, and that these major players, especially Apple, have an incentive to make it very hard.

For example, I buy all my music outright from Amazon & Bandcamp, downloaded to my laptop. From there I use the VLC app to propagate the music to my phone, ipad, etc.

Most normal consumers wouldn’t put up with this. That doesn’t mean they wouldn’t rather own the music and pay only for what they personally consume. It just means Apple & Spotify have set up a big moat. You can’t start a startup to compete with them if your main sell is an easy way to have the raw, owned music files propagated to many devices and organized for easy browsing, because the big players (who don’t want consumers to have that) will just negotiate exclusive licenses and disallow you from having inventory.

> I think it’s more of a technology problem syncing owned music between devices, and that these major players, especially Apple, have an incentive to make it very hard.

Uh, iPods and iTunes? DRM-free music from the iTunes Store?

>For example, I buy all my music outright from Amazon & Bandcamp, downloaded to my laptop. From there I use the VLC app to propagate the music to my phone, ipad, etc.

You've just described iTunes though! And iTunes Match since 2011, for $25/year. It's even DRM-free. That was the way people did music before, and it turns out that when you can rent every album in the world for ten bucks a month nobody wants to be spending twenty bucks on every album they want anymore.

My takeaway from Birdbox is the old adage: "Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes."

Sure it got tons of views because of all the advertisement and the tons of focus on viral media advertisement on every single platform. But the reaction from people watching it before me when asked if it was good was "Well I mean, I did watch it to the end, but i wouldn't call it good". Personally I didn't care for it. It was a huge and expensive stunt by Netflix to show that they could game viewer numbers for a one-shot thing. And I get that this is an important thing for them to do, but it's in no way sustainable or valuable either to them or their viewers.

If they did more stunts like bird-box throughout the year, most would quickly start to completely ignore them with an attitude of "Oh sure I head about X, and it's "blowing up on facebook" but that's always the case with Netflix focus pieces, they aren't worth watching though."

For me it was: "Cool, this is some decent new content from something I was already paying for."

Perhaps if I wasn't already a subscriber and the social media hype led me to subscribe I would be disappointed, but for an existing subscriber? I'll keep my auto-renew going.

For me, it was the time to ask myself seriously if I should cancel the subscription. The "decent new content" is subjectively mediocre and most of what I see in the catalog is mediocre or worse. I have just 3 TV series I enjoyed in the past year, 2 are British weird stuff and one is Altered Carbon, all were ok, nothing great.

This is so true it hurts.

It's like you're a mirror of myself:

Price going up? mmm... I don't know if I want to pay that...


What? Decent new content?

Well, guess I won't unsubscribe. Still cheaper than cable!!!

>" And I get that this is an important thing for them to do, but it's in no way sustainable or valuable either to them or their viewers."

If you were a director, would you sign with netflix after seeing those view numbers? If this helps Netflix get high quality creative talent then I think that is a value to the subscribers.

Few people complain about google's curated search results though or facebook news recommendations (or whatever they are called, I dont have facebook I just read about their algorithm some time ago).

edit: typo.

The article made a great point about TV Everywhere and the inconsistency of app logins. This is something we encounter with apps like the History Channel app, for example. it wants us to log in, go to history.com/activate, but doing so brings up a blank screen or some bizarre error message. I've been trying to authenticate with DirecTV Now, which should be supported and is on the list, but it just sits there. Is it a problem with pihole? unlock origin? Safari? Tried Firefox and Chrome, and same issue. Not a good user experience.

Logging in with a friends credentials for a tv provider she cancelled over a year ago still worked, oddly enough.

Netflix has been way more attractive, even with the slight price hike. Hulu as well.

Something that bugs me a slight bit in the TV app diaspora was that one of the original Hulu mandates back when it was a GE project was to be a strong software provider for TV frontends and backends; that as much as Hulu would be a thing itself there'd also be "Powered by Hulu" opportunities to avoid every TV app having an entirely different experience or missing some should-be standard backend/frontend features.

It shouldn't be a surprise that that original vision was somewhat lost when Comcast bought NBC/Universal and gained a huge stake in Hulu, but it's still a shame that we don't have more "powered by Hulu" apps per that original vision. I still don't understand why NBC/Universal's Seeso attempt wasn't "powered by Hulu" given how central NBC/Universal was as a Hulu content partner (nor why Hulu didn't just inherit the majority of Seeso content when they got bored with the experiment), and that's a large part of why I didn't bother with Seeso. I guess I'm still often angry at the CW for dropping Hulu support for their own app which is just full of technical papercuts that Hulu fixed a long time ago; I would mind the CW app less (even if it was still a separate app) if it was at least "powered by Hulu" and had some of the backend streaming tech improvements, UX improvements, and commercial volume smoothing tech that Hulu uses.

Disney+ supposedly is using backend tech/knowledge from ESPN+, so it won't be entirely from scratch, but with Disney now being majority owner of Hulu, again it seems a shame that it probably won't just be "powered by Hulu", and is likely yet another case where we'll see bugs and UX papercuts that the industry as a whole could have worked to fix together instead of each their own.

I would only speak anecdotally and from what I've observed from people I know. Thus I don't try to infer anything at all, but at least locally I've found it remarkable: in a couple of years, Netflix has become synonym of streaming in their mind, it has really become a thing. They are watching Netflix movies and series a lot, mainly because there are on Netflix, good or bad, indiscriminately, and even more surprisingly, they are discussing about them. It seems to me some people really like Netflix, the service, like some people like Amazon Prime, the service. Netflix seems to have succeeded in building a relationship with them.

I find this to be off-base in a number of ways, starting with the premise that Netflix is a two-sided platform like Facebook, Google and Amazon.

Netflix used to be a distributor. It paid content owners to license its back catalog which no longer had any value in primary channels, namely cinemas. It then charged users for access. In contrast, two-sided Facebook's user do not pay anything, but the advertisers pay for access to them. The relationship is roughly the reverse.

Netflix also do not have suppliers that build up the attractiveness of the platform to end users. Netflix paid for back catalogs. Amazon doesn't pay its merchants. Today, Netflix is both a distributor and a producer. This doesn't make Netflix twice as strong but introduces a number of dilemmas into the organization. In the same way that Disney would look to external distribution channels to maximize the return on its investment in content, Netflix now has the same incentives. Netflix has no suppliers in the sense of Amazon - it pays for all the productions on its platform. It supplies itself.

In fact, they could theoretically make more by having staggered releases where premium channels like cinema receives new titles first. Why? First, because a single ticket to the cinema costs more than a month's subscription to Netflix. Second, because the direct income from Bird Box is $0.

Certainly Bird Box has a positive effect on subscriptions but it can only be inferred. This is an enormous problem. How can you justify spending say $100 on a production which could directly generate $700M at the box office, and then just release it to a limited audience? There are going to be numerous internal battles over this. I bet we'll see Netflix go for wide cinematic release of some titles.

Another issue is capital. Not only does Netflix has to produce content from which there is no direct return. They also have to market it. A $100M production may receive half or the same amount of spend on marketing. They have to build IP that is as relevant as Marvel. In summary, the challenges Netflix has is contradictory incentives between distribution and production, mastering the art of production and building of IP, and spending on marketing new productions.

I have been a Netflix subscriber for over 5 years now, but seldom use it anymore.

Most streaming is via Hulu (commercial free) or Prime in our house nowadays.

I don’t have children, but I could see how having the Disney catalog would be enticing to parents of young children.

Also, strange the article did not mention Fortnight, by name, as a competitor.

The article did mention Fortnite by name. It's at the end.

Thank you. Not sure why I missed that.

I honestly don't think a Disney streaming platform should scare Netflix that much. You can get the entire classic Disney DVD back catalogue for ~£200, why would parents buy a streaming service for £10-20/month for years on end?

And that's the whole classic catalogue - when you bear in mind that kids will happily watch the same old Frozen DVD over and over again, I don't see it as a huge compelling offering. Even adding all of Marvel, I still believe people will prefer to pick and choose their favourite individual media over an expensive subscription.

It's the continuous flow of new and unique TV/movies that is really working for Netflix. Disney just don't output anywhere near the same content hours to make a subscription worthwhile, and kids probably wouldn't care even if they did.

Disney are much, much bigger than you seem to think. They own Pixar, Lucasfilm and Marvel Studios. They already own a large chunk of the US cable TV market, including ABC and ESPN. They have just gained regulatory apprival to buy 21st Century Fox. They aren't newcomers to streaming, because they have a 30% stake in Hulu, which will increase to 60% after the Fox deal is completed. They also own BAMTech Media, which provides streaming video services for the MLB, the NHL, the PGA Tour and WWE.

Netflix should be very, very worried about Disney's streaming ambitions.

The sport is probably the most interesting out of all of those mentioned. There will always be a market for sports subscriptions, so they could have a very competitive offering there that Netflix aren't even involved in.

Marvel, Lucasfilm, etc. I'm still not seeing it. Two or three movies a year that I can pick up on DVD/Bluray cheaper. And that's if they're even worth buying on DVD after having watched them once in the cinema. Marvel movies have been wearing fairly thin, and Star Wars is showing similar fatigue.

I'm not saying they won't have a big market, Disney are huge afterall. I'm just saying that I really don't see them as strictly a direct Netflix killing competitor. They're in a slightly different game, content-wise, and Disney's biggest enemy will be itself.

> Marvel movies have been wearing fairly thin

Outside of your bubble, Infinity War is the highest-grossing film of all time. (With Black Panther following in 2nd or 3rd place if I'm not mistaken.)

Sure, Marvel does not particularly contribute to the pantheon of cinema, but it's nowhere near "wearing thin" commercially. Quite the contrary actually.

Disney owns ABC, Marvel Studios and Lucasfilm. Not mention ABC Family and existing Disney cable channels. Between those assets they could make a very compelling streaming service. Something Netflix knows well since they were leaning hard on Marvel shows for a while.

Marvel and Lucasfilm are still very much in my "I've already got the DVDs" territory. The Marvel TV shows never really lived upto the hype for me and if Disney need to PG'ify everything, they'll have a hard time.

I'm probably underestimating some of the Disney kids TV shows that I've never heard of, but are they even on Netflix right now? Isn't Disney just going to cannibalise their own existing TV market?

The Disney kids TV shows are on Netflix right now, yes. There are a lot of those shows that appeal to toddlers up to the tween age ranges. They have a very large amount of content besides just movies

Thanks for the info, had a quick look but couldn't work out which were Disney.

So it really becomes a question of whether people are buying Netflix just for their kids content and will cancel one for t'other if Disney pull all their content, or whether they're happy to buy both.

If they only want to buy one, then maybe they'll switch.

If they're happy with both, then it actually helps Netflix bottom line as they no longer have to license expensive movies from Disney.

It's a balancing equation between whether the people they lose outweigh the licensing costs for Disney. Which is exactly the same situation they've always been in anyway competing with traditional cable offerings.

I see a challenge, but not a considerable Netflix killer like some people try to make out.

You also have to consider people living with their parents, who will move out, and start their own family.

..and sadly Netflix often does not have the dubbing in many languages, so my non-english speaking toddlers prefer to watch other stuff.

It's painful, really, I just want the Mickey mouse clubhouse in Italian and am unable to obtain it legally.

The day an international Disney streaming service appears I'm guaranteed to sign up.

There are a lot of Disney series, and all the girls in primary school have heard of them. Disney are strong on this segment

So I like prime a lot as they have higher quality "Amazon creations" but I think Hulu sucks. The content is not that good and the good stuff is usually incomplete. Hulu I guess is good if you stream reality TV. Not for me.

I’ve said this before, but I expect Netflix to continue to flex their muscle until they have an average subscription cost of $35-40/month.

There’s so much room in the entertainment market for them to save customers $50/mo, offer them more, and increase their revenue.

The market is on its way to fragmentation as more content producers move to have their own apps instead of going through an intermediary. And they all want $10-$15 a month. It won’t be long before people refuse to pay for more apps, as the total cost of both the Internet connection and all app subscriptions surpasses the price they used to pay for cable. That is what limits the price any one app can charge.

Perhaps. But we just recently tried CBS's streaming service, and it was terrible. AFAICT, only 720p, and the encoder they used appears to have had the quality set to "potato" (blurry, tons of what look like interlacing jaggies during rapid motion). It made me really appreciate how good of a job Netflix is doing on the technical side of things.

I have not seen it myself, but CBS is the clear loser of all the apps. They seem to be trying to build a pay service on the back of Star Trek (maybe they think the Internet is just for nerds?) and everything else they have is free content OTA anyway.

Yep, besides, why not just watch the OG Star Trek reruns (if they still do that, I don’t really follow Star Trek anymore) or pirate if the app is so crappy? And OTA.

I can't really agree with that. Their 1080p content doesn't look anywhere near as good as a BluRay, and their 4k is indistinguishable from 1080p. I'm often frustrated with the compression artifacts and colour banding, especially on low contrast frames like dark scenes or fade ins from black.

I think you’re right, and then we’ll see a cycle of renewed piracy, followed by the grudging realization that making some money is better than making no money. It took a while to crack the music industry, but the same inevitable forces are ultimately at play here.

For most casual consumers piracy is an inefficient way of getting content, even in the hay-day of piracy I'd bet that most consumers were getting their content via normal channels. A slight uptick in piracy may occur for the technically minded, but most consumers will pay for the convenience of streaming.

Things like Kodi boxes and steaming piracy sites have really changed the landscape. I find that many pirates today are not technical, might not know what bittorrent is, and find the whole experience to be roughly like any streaming service.

It's arguably a better experience if you don't need to be aware of which platform each piece of content is streaming on. And I'd rather see IMDB ratings then the rather meaningless "this is a 92% match for you."

You would be amazed to know how piracy became consumer grade in the past few years; I heard about streaming sites from non-technical people that were watching their favorite shows there because there was no official way to do it otherwise. Outside top 2-3 markets, most online streaming services have a serious delay that is no longer accepted by consumers, so they turn to piracy. Why wait 1-2 years to see the last episode of Game of Thrones on official channels when you can see it next week on pirate sites?

I find piracy to be faster in many cases. Between a nzb downloader and a Kodi plug-in with a drebid service I'll be streaming something just as fast as you don't find it on Netflix.

Yeah, they all want $10-$15 a month, but I doubt many will get it.

We'll see.

> until they have an average subscription cost of $35-40/month

That's impossible. 3/4 or more of their total customer base for the future is outside of the US. The economic middle 50% and the top 50% of people in Brazil, Indonesia, India, Turkey, Vietnam, Thailand, China, Nigeria, Mexico, Colombia, Russia, Bangladesh, Philippines, Ethiopia, and about 140 other countries - can't and will not pay an average of $35-$40 / month (or say ~$25-$30 if we're assuming an average lifted by higher prices in affluent nations; that requires eg the US market to pay far higher prices beyond $35-$40). Not under any circumstances will any of that happen.

Netflix will be able to raise prices in the non-rich markets (ie most of their customer base of the future) only as economic growth allows for it, both at the global and local levels. Customers in Brazil aren't going to suddenly be able to jump from $5 / month to $25 in the next ten years, no matter how much good content Netflix puts up.

Western European customers, who could largely technically afford $35-$40 per month, will never accept those prices.

Netflix is pushing near the edge of what people will pay right now globally. They can maybe raise prices in the US another 25% over several years before hitting the ceiling in their most lucrative market. The US market represents a rough approximation of their maximum pricing power. There's no scenario where they retain their customer base in the US and charge $35-$40 (unless we're talking about 50 more years of inflation).

For me Netflix isn’t competing against cable (its been 15 years since I subscribed) but against YouTube and small mobile games that I can play a few minutes here and there.

In that light they are already a little too expensive for the value to me for a yearlong subscription. Instead I’ll subscribe for a few months and then cancel when I realize I’ve been paying without watching anything for weeks.

There was a story on HN a week or so ago about Netflix's main competitor being Fortnite.

I would never pay more than the 10€ I pay now if the content quality and quantity they have at the moment persist, especially for us non US subscribers.

Also I doubt they can keep it up, soon they and Amazon will go through all the culture written down and then what?

I doubt that. Keeping subscription cost low means people will not view it as a huge expense and are much more likely to keep the subscription rather than cancel it, even if they use it very little.

There's a line though, where it moves on over into the high-enough-to-notice expense category, where people will be much more inclined to cancel if they're not using it significantly. If Netflix had cost me $20 or more a month, I would have cancelled it long ago, and only subscribe for a month a year to binge.

I'm betting Netflix want to stay in that first category for as long as they can.

I think tiered pricing makes more sense at that level of subscription.

Netflix is global, so at some level their product and pricing has to reflect what the "lower middle class" in Turkey, China, and Brazil can bear. We know that cable providers have succeeded in getting more for less in this market, so Netflix could profitably charge more for more in some regions.

I would guess that divide can't be reconciled, but by launching another layer of content/service at a higher price-per-month could let them maximize revenue. Netflix+ or something, paired to exploit some newer technology that isn't central to other services...

And one way to get there might be live sports. The money I throw at Sky Germany to be able to watch Bundesliga (football - don't call it soccer.) is ridiculous - I'd be happy to spent a fair share of that amount to watch it via Netflix.

I'm currently subscribed to DAZN, a european live sports streaming service that covers all kinds of international sports and leagues and for 10 € monthly the available content is stunning. Having that content on Netflix would be very welcome, particularly due to their better streaming technology which is very important when it comes to live streaming.

I can speak for myself, at that price I need to get live streaming as well as on-demand.

"Netflix is so confident in its position it is effectively stating that if customers choose to watch TV, they will choose Netflix."

That is, until they stop choosing Netflixt.

I cancelled my Netflix account a week ago after finally realizing what a huge time suck it has become in my life. I know I'm just one data point but I'm pretty sure others will come to that conclusion eventually.

I was an early Netflix adopter and evangelist to family and friends. I canceled my account months ago last time they had a price increase and haven't missed it. I got sick of spending more time scrolling through uninspiring content looking for something to watch than actually watching enjoyable content.

I see a flaw in a lot of subscription models in that they lead to companies optimizing for "engagement" rather than maximizing the value of my time as a consumer. In theory this seems like it shouldn't be fundamental to a subscription model in that Netflix's costs could be lower if they offered me less but higher quality content but in practice it doesn't seem to work out that way.

Netflix might be right that if people choose to watch TV they'll choose Netflix. I chose not to watch TV any more rather than switching to another provider.

>I got sick of spending more time scrolling through uninspiring content looking for something to watch than actually watching enjoyable content.

Yeah, that's been my experience with Netflix every time I've tried restarting a membership.

> I see a flaw in a lot of subscription models in that they lead to companies optimizing for "engagement" rather than maximizing the value of my time as a consumer

This is really interesting. I suppose the question is how do you measure value delivered?

Typically people show that they value something by paying for it. Normally you pay for goods with money, but many subscription services and F2P games are happy for you to pay with time. I feel like using "time paid" is a valid proxy for how much value customers get from the service. What doesn't make sense to me is why it appears that so many people value their (free) time so lowly.

Perhaps if Netflix offered a second PPV service its recommendation engine would have different incentives. With that model you also have payment friction and discovery friction. But honestly I'm not sure why they don't do it -- Amazon has been for a while.

It seems like there's something misleading going on with the paying with time trend. Companies can increase "engagement" for a while by making their experiences waste more of their users' time. There's a frog boiling effect where people don't really notice incremental changes but one day suddenly realize the service doesn't seem like a good use of their time any more and they ditch it completely. This has happened to me with Netflix, Facebook and Instagram and while it's not super common yet there does seem to be a bit of a trend of early adopter types ditching these services.

From the company's point of view this might look like a positive trend in engagement followed by a sudden hard to explain complete drop off.

User ratings? It's not a great dataset though.

>I'm pretty sure others will come to that conclusion eventually

people come to that conclusion all the time. It's not new, and not something unique to Netflix. I don't see any reason why people would stop watching Netflix at higher rates than they have stopped watching any other TV format in the past 50 years. People like watching TV.

I imagine you could say that about most things you spend your time on. Reading books? Huge time suck. Playing games? Huge time suck. Watching videos? Huge time suck. I think Ben explained it well in his podcast related to this. When people have $200 a month budgeted for entertainment, the marginal cost of a Netflix subscription isn't that much especially given the amount of potential content the service can have.

Ultimately it depends on what you want to spend your time on, but I'd argue most want some form of entertainment, and Netflix fills that role for a lot of people.

The expression "Time suck" doesn't just mean "takes a lot of time", or people would be complaining that eating is a time suck. It has a connotation of wasted or unproductive time (where "productivity" is defined personally, as loosely as you like). A useful analogy might be junk food: 600 calories of potato chips has exactly as many calories as 600 calories of a balanced steak dinner, but the former is less filling and nutritious.

It's reasonable to describe a service full of perceived low quality content as a time suck in ways that one might not consider watching better content.

> A useful analogy might be junk food: 600 calories of potato chips has exactly as many calories as 600 calories of a balanced steak dinner, but the former is less filling and nutritious.

The former also takes two orders of magnitude less space, time to prepare, time to eat and time to clean. :). Also tastes better.

Personally, I interpret "time suck" as something that sucks time in, i.e. you may have "allocated" X hours for entertainment this week (but who truly allocates this?), but with Netflix, you find yourself spending 2 * X this week, an increase from 1.5 * X the last week.

> The former also takes two orders of magnitude less space, time to prepare, time to eat and time to clean. :). Also tastes better.

Well sure, and throwing on Netflix take less time and mental energy than playing music, reading something challenging, working out, or any of a million other things that most people would personally say is a more productive use of leisure time. This seems in accordance with my metaphor.

I think you may have assumed an indictment of eating junk food from my comment, while there was none. I eat it myself occasionally without any (or at least many) qualms. But it's something that you'd ideally minimize, in the same way that one would for things considered a time suck.

> Personally, I interpret "time suck" as something that sucks time in, i.e. you may have "allocated" X hours for entertainment this week (but who truly allocates this?), but with Netflix, you find yourself spending 2 * X this week, an increase from 1.5 * X the last week.

Hm, I get where you're coming from, but I don't think I'd exclude something that takes a constant, large amount of time from the category. I also am not sure I'd include things that I find fulfilling, like working out or reading, even if their time commitments surprised me upwards.

(fwiw, junk food only tastes better if you're used to it: I find healthy food way, way more palatable, with the only exception being when I'm drunk or high).

> Also tastes better.

Seriously? I'd take a good steak over potato chips every single time.

So you stopped watching television style entertainment? That’s a great change if so, but I’m not sure I see that happening on a wide spread basis anytime soon.

It is an anecdote, not a generalization.

Netflix should create less content, not more. I find it low quality and will discount titles with Netflix logo that otherwise look interesting. I’m also a Mubi and Amazon Prime subscriber. It’s surprising to hear the original content is working for the company.

I don't see how they could pursue anything but that considering how they probably won't be able to license the shows of other streaming services.

I love Mubi for their taste and community of cineasts. However that 30 films a month model makes it a non-starter to me - the selection is just to limited. I feel somewhat guilty but I basically use them as a giant movie database with excellent curation and lists for free.

I actually really enjoyed Bird Box. It's the closest thing we've got to a Lovecraft horror film.

A lot of observers, especially on HN, worry about the balkanization of video streaming content and see it as hindering Netflix's growth. In my opinion, I don't really see it. When the dust settles I think we'll see Netflix and Amazon as the duopoly of this era of video streaming.

I don't think Disney's streaming service is out to compete with Netflix directly, to me it's more of a play to leverage the Disney brand and ensure they still have a 1:1 relationship with the consumer. Look at it this way, dozens of journalistic outfits have gone by the wayside in the era of Facebook and Google, but the New York Times and Wall Street Journal are not trying to compete by being aggregator platforms like Facebook and Google, instead they are leveraging and monetizing their goodwill and reputation by putting up paywalls, I see Disney doing the same for their content. Also, Disney (smartly) is going to hedge their bets and continue to put new original content on ABC, ABC Family, movie chains, etc. They are not playing the same game as Netflix. The same can be said for Hulu, yes Hulu has more original content -- but at the end of the day Hulu is mainly a channel for the traditional networks to get their hit shows on a streaming platform ASAP from original air date.

As long as Netflix keeps their debt under control, they will continue to grow and have a lot of room to keep raising their prices. Netflix is still drastically cheaper than the cheapest cable bundle, even if you combined a Netflix subscription with Amazon, HBO, Hulu, etc.

> When the dust settles I think we'll see Netflix and Amazon as the duopoly of this era of video streaming.

I doubt it. Comcast/NBCU, AT&T/Time Warner, and Disney all have good (and in some cases superior) content and their own distribution paths in place or in the works.

FWIW, Netflix will no longer be able to license Daredevil shows from Marvel / Disney. I think a lot of folks signed up for Netflix to watch that catalog of films and shows specifically, including the latest Avengers and whatnot.

I think the more likely scenario is Hulu goes away and we're left with Amazon, Disney/ESPN and Netflix. And HBO, of course.

Disney has a large stake in Hulu, due in part to the Fox acquisition. Moreover, Disney+ will focus on kids and family content, they will need Hulu to provide the network TV along with more adult focused content. Per Disney's own admission, Hulu will partner with their streaming service and will likely not go away anytime soon.

Yep, they already own a 30% stake which will become a controlling stake (60%) provided the Fox buy closes.

Ben and James talk about this on their podcast. I'd recommend giving it a listen to see them extrapolate on your thoughts.

offtopic, are the diagrams made in photoshop or something more approachable?

Netflix gradually turned from bad to worse. First they pushed DRM into HTML standard. Then they joined the MPAA cartel. Nothing good should be expected on that trajectory.

0.01% of customers care about that and less than 1% could even decipher those acronyms.

That is not a measure of moral good or bad. It sucks that it doesn't matter.

That's how that cartel would like it to be (something most view as too obscure). Since when such issues are brought to the public, it becomes glaringly obvious how crooked the are.

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