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dkokelley 502 days ago | link | parent

It's nice to see that Netflix is getting more content. I like Netflix. But I wonder if this isn't Netflix learning to play the content producer's games. I think it would be better for everyone if content production/distribution was profitable not because of exclusivity but because of ubiquity. Disney could (should) be most profitable when they make access to their product (content) easier.

Note I am speaking prescriptively. When I say "should" I mean "the way the world ought to work according to me..." I'd love to hear what others think about this.



Steko 502 days ago | link

> Disney could (should) be most profitable when they make access to their product (content) easier.

Ok I'll bite. Access to content has multiple facets:

First main point is price. Obviously it's not "most profitable" for Disney to make it's stuff free. A subscription service is going to charge a monthly fee and that fee is going to be primarily licensing and overhead. Dividing that over a dozen companies reduces the profit taking of a market leader like Netflix but also multiplies the overhead. Note, the 3 year contracts already control Netflix from taking too much of the profits so it seems like there is little incentive for Disney to want a market of say 10 netflixes over one.

Second main point is that not all access is equal. Disney has strong incentives to associate its content with: (1) a quality service both in delivery and interface; (2) a service that provides useful data back to Disney; (3) a service that will promote Disney. Why should Disney associate itself with your fly by night terribly performing service that streams in 360p, constantly drops and has a 15 step sign up process riddled with malware carrying flash ads? Why should Disney help me launch a foreign film centric service where Disney movies are also rans?

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dkokelley 502 days ago | link

> Obviously it's not "most profitable" for Disney to make it's stuff free.

Granted. "Easier to access" in this case in analogous to a manufacturer selling their wares in more stores, instead of limiting sale to a handful of select retailers. Of course the literal interpretation of "easier to access" means that everyone finds a copy of the latest Disney content mailed to their doorstep with no expense to the consumer.

To your second point, assuming the marginal cost of distributing content through 3rd string distributors is negligible, why shouldn't Disney want their content distributed through anybody who will pay? My assumption is that all things being equal the market will abandon those providers. On the other hand, if Disney decides to go exclusively through a provider like Netflix, consumers don't have the option to move their business elsewhere.

(Obviously a site that installs malware would and should be shunned by Disney, just as a retail store that steals credit card numbers might be black listed. These are ethically and legally wrong.)

I agree that Disney has tremendous incentive to do things they way they do. In my personal utopia, they would be incentivized to behave as I described in the parent thread. The question remains: how should the market and industry shift to get us to that point?

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naner 502 days ago | link

Disney could (should) be most profitable when they make access to their product (content) easier.

Have you ever heard of the "Disney Vault"[1]?

1: http://en.wikipedia.org/wiki/Disney_Vault

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dkokelley 502 days ago | link

Yes I have, and I'm not a fan. It creates artificial scarcity. I can understand their reasoning though.

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MartinCron 502 days ago | link

I am not a fan either, but I have no room to complain. I saw that Finding Memo was available through iTunes and I bought it immediately for fear of it being vaulted.

This is the third time I have purchased that film.

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lucian1900 502 days ago | link

I just pass. There is plenty of other entertainment out there.

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waterlesscloud 502 days ago | link

It's in the interests of the studios to split their collective content among various streamers. Ideally they keep several major streamers thriving. And perhaps more crucially, able to bid against each other.

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gpayan 502 days ago | link

What it comes down to is money and how much Netflix is willing to pay for exclusif access to Disney content. Disney tries to maximize the amount of money it can get from its content & distribution partners. If the money made from providing exclusive content on Netflix > Money made from the same content available on Amazon + Hulu Plus + Netflix + Xfinity => then Disney goes with the option of exclusive content on Netflix.

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raveli 502 days ago | link

By giving exclusive rights for premium services, Disney and other studios have full control over the content. The worst that could happen is that the content would become commodity like news content on the web.

The more exclusive they make the content appear, more likely people will continue to pay for it (again and again).

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