Hmm, I think you're missing a couple of things though.
First, why does it have to be new content every month? Paramount has a huge library of old content - more than your average viewer can consume. Why isn't that sufficient to retain and acquire customers?
Second, re cheap content, it doesn't have to be cheap in total, it's the marginal cost that counts. Making mission impossible films is ludicrously expensive. Adding them to Paramount+ is almost free. So by this logic, studios should have an advantage over netflix, since the marginal cost of their subscription services are lower.
Thanks for finally clarifying the economics of streaming. I really never understood it. Netflix spent $18B for new content why? So they retain 98% of their users—an astonishing number. Netflix has really built a content moat. I like the stock 😉.
- Netflix should continue doing what it is doing, with an emphasis on original content (and this time stop screwing over promising shows).
- Warner Bros and Universal should launch a joint streaming service (albeit without going through the s***show of a full merger), leveraging their respective IP to promote it and with an emphasis on an extensive back catalogue of beloved shows, while continuing to separately pump out cinema releases.
- Disney should pair down Disney+ to the Star Wars, Marvel and classic Disney/Pixar brands, offering individual subscriptions for each category, and leasing the rest to the above.
- Amazon should focus on big budget TV commissioning, preferably recruiting some actual creative talent to do so, and selling the results to the above - by all means keep some as a sweetener for Prime, but for god’s sake stop trying to compete.
- Everyone else should be focused on creating content for a combination of cinema releases, and to sell to one of the above services.
The reduced landscape should mean that recruitment stops become a battle for ever smaller slices of the same pie, and outsourcing content creation should hopefully provide both creators with more clearly defined returns on productions, and streamers with the ability to better curate quality productions without needing to take on as much risk
Interesting analysis. I genuinely wonder what keeps people from streaming content illegally: is it moral considerations? Fear of legal consequences? Something else?
Interesting - how much of “getting Netflix” is just being able to watch the content, and how much of it is the whole UX (recommendations, channels etc.)?
What I mean is: Netflix offers content and a nice user experience, for example, it recommends content to you, it has the content organized in channels like "True Crime" etc.
If you stream illegaly, you get the content, but the user experience is worse.
So I guess I am trying to understand how important the user experience relative to the content. In other words, if you had a website which is just an alphabetical list of content, would that be mostly equivalent of "getting Netflix"
My questions might be a bit vague, I had never thought about this before and I am trying to explore people's motivation for and against streaming illegally, so thanks for responding and apologies.
I'm sure the data is harder to find, but I'd be curious how different this economic model looks for "minor league" streamers. I think of something like Criterion Channel, which acquires but does not produce content, while also giving some "quality" guarantee associated with its prestige brand. Or Dropout which produces original content but does so very inexpensively by sticking mostly to game/talk shows with small sets and cheap production, along with a recurring cast of performers so the whole ecosystem of shows feel connected.
I agree that too much streaming is chasing after the pipe-dream of a fountain of easy money. I hate cable and ads. It's also strange that in a digital world we have to create this artificial scarcity. I have a feeling that this tendency, as well as the tendency for capital to accumulate towards fewer and fewer hands is straining all sorts of systems. I wouldn't be surprised if this causes a lot of painful "creative destruction"
Hmm, I think you're missing a couple of things though.
First, why does it have to be new content every month? Paramount has a huge library of old content - more than your average viewer can consume. Why isn't that sufficient to retain and acquire customers?
Second, re cheap content, it doesn't have to be cheap in total, it's the marginal cost that counts. Making mission impossible films is ludicrously expensive. Adding them to Paramount+ is almost free. So by this logic, studios should have an advantage over netflix, since the marginal cost of their subscription services are lower.
I'm guessing there aren't a lot of people willing to pay a monthly fee just to watch old movies.
But that's an interesting question - why not?
Well, it's just a guess.
I think most people only want to pay for the newest and latest entertainment.
You just gave the same answer, in the inverse:) aren't you curious as to why that is?
I should be curious why people only want to pay for the newest programming?
Well yes. It's strange that people will pay to see mediocre (albeit flashy) Netflix productions instead of a better classic film.
Not that your statement is entirely true btw - how many people are on netflix because of Friends?
Thanks for finally clarifying the economics of streaming. I really never understood it. Netflix spent $18B for new content why? So they retain 98% of their users—an astonishing number. Netflix has really built a content moat. I like the stock 😉.
My own take on the streaming wars:
- Netflix should continue doing what it is doing, with an emphasis on original content (and this time stop screwing over promising shows).
- Warner Bros and Universal should launch a joint streaming service (albeit without going through the s***show of a full merger), leveraging their respective IP to promote it and with an emphasis on an extensive back catalogue of beloved shows, while continuing to separately pump out cinema releases.
- Disney should pair down Disney+ to the Star Wars, Marvel and classic Disney/Pixar brands, offering individual subscriptions for each category, and leasing the rest to the above.
- Amazon should focus on big budget TV commissioning, preferably recruiting some actual creative talent to do so, and selling the results to the above - by all means keep some as a sweetener for Prime, but for god’s sake stop trying to compete.
- Everyone else should be focused on creating content for a combination of cinema releases, and to sell to one of the above services.
The reduced landscape should mean that recruitment stops become a battle for ever smaller slices of the same pie, and outsourcing content creation should hopefully provide both creators with more clearly defined returns on productions, and streamers with the ability to better curate quality productions without needing to take on as much risk
Interesting analysis. I genuinely wonder what keeps people from streaming content illegally: is it moral considerations? Fear of legal consequences? Something else?
Convenience. I'm fairly tech savvy. But I don't know how to get Netflix illegally. I'd rather just pay $18/month.
Interesting - how much of “getting Netflix” is just being able to watch the content, and how much of it is the whole UX (recommendations, channels etc.)?
I'm not sure what you're asking me.
What I mean is: Netflix offers content and a nice user experience, for example, it recommends content to you, it has the content organized in channels like "True Crime" etc.
If you stream illegaly, you get the content, but the user experience is worse.
So I guess I am trying to understand how important the user experience relative to the content. In other words, if you had a website which is just an alphabetical list of content, would that be mostly equivalent of "getting Netflix"
My questions might be a bit vague, I had never thought about this before and I am trying to explore people's motivation for and against streaming illegally, so thanks for responding and apologies.
Gotcha. That's a good point. Yeah I think a lot of people don't want the hassle of trying to find media on a pirate website.
Does anyone know when next season of Yellow Stone is back?
Great post.
I'm sure the data is harder to find, but I'd be curious how different this economic model looks for "minor league" streamers. I think of something like Criterion Channel, which acquires but does not produce content, while also giving some "quality" guarantee associated with its prestige brand. Or Dropout which produces original content but does so very inexpensively by sticking mostly to game/talk shows with small sets and cheap production, along with a recurring cast of performers so the whole ecosystem of shows feel connected.
I agree that too much streaming is chasing after the pipe-dream of a fountain of easy money. I hate cable and ads. It's also strange that in a digital world we have to create this artificial scarcity. I have a feeling that this tendency, as well as the tendency for capital to accumulate towards fewer and fewer hands is straining all sorts of systems. I wouldn't be surprised if this causes a lot of painful "creative destruction"