Category Archives: Netflix

There is Netflix – and then everyone else

Was listening to this on one of my long walks, https://overcast.fm/+F-0WRB7Pc, and you get the feeling that the tide is slowly turning towards Netflix. Now some of the most respected people in film absolutely love working with Netflix and the stuff they are excited about shows you how much the game has changed.

They way they market, they way they work with the film makers and the appetite they have to try new things.

With all the stuff going on with Disney and Fox – it is clear what their worry is – it is Netflix. Obviously Disney has more than just movies and shows with the theme parks and all that but the battles for streaming must be the biggest fight they have.

As a user of all these services – HBO, Netflix and some of the local ones, I tend to look at the tech or just how well they all work and bar none – Netflix has no competitor. Right now I am stuck in upcountry Thailand using an LTE wifi hotspot to get connectivity for my laptop, my son’s laptop, and 3 or 4 phones. Guess what streaming service works everytime and even supports both of us using it at the same time? Netflix.

Many times it even works better than videos on FB or YT. Add to that the amount of great original content on it and the local subtitles and there is just no comparison. Of course there is the other battle being fought with all the regional players and the telcos. iFlix so far is easily taking the lead but it is still in another class compared to the depth of content and the technical acquity of Netflix but that makes sense given how long Netflix has been around and how much they have invested.

It will be interesting to see how they giants take the battle to Netflix – that is even if they can find the battlefield.

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How far will Disney push it?

So Disney is buying part of Fox :: https://www.reuters.com/article/us-fox-m-a-walt-disney/disney-deal-set-to-value-fox-at-more-than-75-billion-source-idUSKBN1E7348

Will be interesting to see how they play the OTT game from here on out – they have Fox doing their own online stuff, Disney is planning to build Disney online and with this deal they now control Hulu as well.

I don’t see the point in keeping them all going and I personally would prefer the killer Netflix competitor but would they use Hulu or go all in on a Disney only OTT play?

Also listen to this podcast with The Prof :: https://overcast.fm/+BcN1HLmuU – where The Prof talks about Disney going nuclear and making sure their content is only on their OTT property and somehow doing a Disney prime for content and access to Disney offline – the Theme Parks.

Recurring revenue FTW!

All the experts…

I was listening to a podcast the other day and basically heard Barry Ritholtz come to the conclusion during the interview with the Prof that Apple should buy Netflix.

What I find fascinating is how quickly armchair quarterbacks can make an off the cuff declaration that turns into a business meme.

Days after that podcast Barry writes this :: https://www.bloomberg.com/view/articles/2017-11-07/why-apple-should-buy-netflix

Of course people will read Bloomberg and quickly think this should happen but my take is that it shouldn’t happen and it won’t. For many reasons.

First reason is I don’t think Reed wants to be bought. People will counter that with everyone has a price but I generally think Reed has been bought before, has purposefully worked to build a big company he loves to run and has a vision for Netflix that doesn’t include an acquisition.

That point aside it would appear that folks like Barry and others who say Apple should buy Netflix don’t actually get OTT businesses at all. For a company to be successful in OTT they need three things – the ability to stream content, they need the content to stream and they need distribution or devices to consume the streams. Apple already has 2 out of the 3 and most companies have to pay for all 3. They have to build streaming, they have to buy content and they have to buy distribution – in other words they have to spend a shit ton of money on adverstising. This is why OTT businesses are a funding game these days. I always proffer the biggest winners here are Google, Facebook, OVPs and the content guys – not the OTT companies.

Since Apple has 2 out of the 3 then all Apple has to do is buy or make content. Those not in the know don’t realize that before Netflix was an aggregator of content and didn’t produce much of their own content but now Netflix is not only buying content but it is is making content. However making content is not magic and esentially means Netflix operates like any other studio which means it has all the issues like any other studio and with each passing day Netflix has to be a studio and be a aggregator which is not easy.

Plus it is very expensive.

Which means Apple can do exactly what they are now doing. Use their tech and their massive distrubtion – iTunes, iOS, MacOS, Apple TV and whateve else they are creating to highlight content that they will make much in the same way Netflix is doing. This means buying Netflix would be waste of capital. Apple could actually use their cash to outspend Netflix on similiarly great content – like what they have just announced here, http://variety.com/2017/tv/news/apple-jennifer-aniston-reese-witherspoon-morning-shows-amazing-stories-1202610068/

Keep in mind that almost all celebrities in the world use Apple phones. Which means that Apple has a direct relationship with the people that star in and produce content already. Not difficult at all for Apple to get exclusive content for their ecosystem.

John says much the same thing here :: https://daringfireball.net/linked/2017/11/08/apple-netflix-ritholtz

Also the latest Daily Update from Ben Thompson corrects his earlier mistake where he discusses that Apple should buy Netflix. https://stratechery.com

 

The weak link in OTT

Having been involved in OTT for many a year it was always obvious to anyone working in the industry that the whole DRM system is mostly a waste of time and money. This is the system that the movie industry forces on the OTT industry through lobbying that has driven up the cost of everything.

The idea being that if you pay for DRM that at least if anything happens, meaning someone steals a stream, you can say you are covered by so and so’s DRM. Essentially DRM is like insurance.

However, if you have ever worked in the OTT industry, the general security around how movies are sent around would floor you. Companies mail hard drives around, ship DVD’s, put movies on Google drive and all sorts of file transfer methods that are semi secure or not even remotely secure.

But since all these systems are run by people, usually any sort of leakage starts from the inside and involves people paying for access. Or, there is just a lack of security and any system that is based on people will usually have a flaw or someone makes a simple mistake which will allow a sophisticated tech person a chance to steal stuff.

https://daringfireball.net/linked/2017/04/29/orange-is-the-new-black

In this specific case it sounds like the hacker got into the post production studio’s system and was able to take the episodes. These episodes probably were not even completed or ready to be streamed. Around the emerging markets there is quite a racket for copying the movies and selling them to pirates while they are being transferred around, supposedly in safe hands, but in places like India it is quite common for the film canisters to be dropped off at the pirates on the way to the cinemas.

I am sure Netflix is pissed and will be interesting to see if they figure this one out. As more and more media moves to online only – my guess is this type of situation will happen again. It also brings to light the issue in companies like Netflix realising all episodes at once since in order to do this all the shows have to be ready to go. This means all the shows are sitting there if someone gains acccess where in a normal TV show- they are being made as you watch or getting finished as you watch.

Told ya Netflix would add download 

Welcome to the world of download :: http://www.theverge.com/2016/11/30/13792376/netflix-offline-downloads-now-available

Of course it is not the full catalog but don’t blame Netflix for that – lots of dumbass content companies don’t allow it.

My guess is this will be used a ton.

Looks like the competition is having an effect at this point :: http://www.cnbc.com/2016/11/02/netflix-offline-mode-could-be-on-the-way-but-not-for-us-users.html

Also another way to entice local and non VPN usage.

Talked about it here before – they will say no but they will eventually do it.

Boom.

http://www.techinsider.io/reed-hasting-comments-on-netflix-offline-viewing-2016-4

“We should keep an open mind on all this… as we expand around the world where we see an uneven set of networks, it’s something we should keep an open mind about.”

We’ve had our share of churn.

Another Mumbrella post about HOOQ :: http://www.mumbrella.asia/2016/11/hooq-to-launch-in-singapore-in-january/

I have, obviously, talked about this before :: http://www.nokpis.com/2016/11/08/growing-pains-comical-excuse-for-the-truth/

A couple of things in the new post that are interesting. It seems the CXO churn is starting to hurt a little bit and HOOQ is now deciding to try and comment on it some. I think Krishnan is actually being pretty honest here:

Rajagopalan conceded: “We’ve had our share of churn.”

“It’s been combination of what’s natural for a startup, and the unique context of Hooq as a brand. It’s a startup that has deep-pocketed investors who have certain expectations. That has contributed to churn in certain ways, as has different personalities that have joined us.”

High churn has meant that Hooq has taken longer than previously to bring in new people.

“We’ve been careful about replacing the CXO suite. This time we want to make sure have the right people in place,” said Rajagopalan, who said that Hooq staff needed to be comfortable in both a startup and corporate environment.

I think the issue with HOOQ is that people go there expecting it to be like a startup. Unfortunately it is nothing like a startup except for the fact that it is a new company. What happens is employees, like myself, join expecting to work in a place similar to a startup but not knowing that there are three shareholders that are nothing like a startup. All that is okay but HOOQ is essentially just a mini video arm of Singtel and we all know Singtel is not a startup. This culture clash has probably been the major driver of churn across the CXO suite and into many of the other groups at HOOQ. Such is life.

It is also smart that they are being careful about how to replace the CXO team with folks who understand what they are signing up for.

Then this:

He pointed to Singtel’s acquisition of marketing business Amobee, which the telco acquired in 2012, as an example of another company that took a while to settle in to corporate life with the telco giant.

Hard to know from the outside how Amobee is doing. It may take years to know how it all went.

https://adexchanger.com/publishers/amobee-sunsets-ssp-lays-off-around-5-employees/

Lots of ad exchanges are struggling so the layoffs might be needed to compete globally. It is a tough space for sure.

As to HOOQ entering Singapore – this part I am baffled by. I have a hard time understanding how a product that makes sense for the emerging markets, Singapore is NOT an emerging market, would do well in Singapore.

However I think this is actually more akin to what HOOQ is becoming. Just a video product for Singtel to use in their network. Potentially that is the future of HOOQ – as a subsidiary of Singtel, yes it is JV but run like a subsidiary, to be the video product for the Singtel network. This might be a great business – who knows yet. However it means competitors like iFlix are starting to run in a league of their own as they move to be in all emerging countries regardless of their telco partnerships.

This then points to a larger debate to have. Is the OTT market in emerging markets going to be won by a large player cutting across many regions? Will the Netflix/Amazon’s of the world slowly be the global player? Or will a company like HOOQ, focused on servicing their telco parent, be the model? I don’t know.

I wouldn’t profess to see the future but I tend to think that a proper startup might have a better chance but at the same time the global players will probably have the best tech and the best content. However the telcos in Asia are quite powerful.

Let the games begin.

Good to see some Netflix truth telling

Was sent this about Netflix on Bloomberg today.

According to a statement issued last week, international subscribers grew at the slowest rate since 2014, when Netflix was available to far fewer people.

Not surprising – I wonder if Netflix tries to use Netflix from Singapore – the catalog is shit. I wouldn’t even bother using it in Singapore if it wasn’t for my ISP’s feature of routing my Netflix and HBO traffic to the states. It’s amazing the difference between the local catalog and the USA one – it’s still comical to me I can’t watch the latest season of the House of Cards on Netflix Singapore. Would be one thing if Netflix Singapore cost 4 bucks but it doesn’t.

Ultimately Netflix may prevail but I think they have underestimated a few things –

  • Cost. They want to pull the SBUX global pricing game but that’s silly since the size of my cappuccino in Singapore is the same as the one in San Francisco. Netflix catalog differences are huge.
  • Local competition – they act like none exist.
  • Not being able to download. Not a huge issue but an issue.
  • VPN blocking. A bunch of people used Netlfix for the USA catalog – now that has stopped which means they have lost subscribers who were paying USA prices to get access and who dumped them when they saw the local catalog.

Big kudos to iFlix for getting a big mention. What’s glaring is the complete miss on HOOQ but guessing that is either cause most folks are already writing it off or that HOOQ continues to be appallingly bad at PR. 

Here you go HOOQ – got you some PR today. 

IFLix and Netflix are spot on about piracy but Netflix seems to just be burying their head in the sand when it comes to dealing with the issue:

And that won’t be easy. In September, a senior Netflix manager acknowledged piracy as the company’s biggest competitor in Asia-Pacific, the fastest-growing internet market. But instead of lowering prices or seeking different models, Netflix is charging $7.99 per month to subscribe in Cambodia — a country where the average income is about $1,000 per year, and where only 2.3 percent of the population has a credit card. In fact, fewer than half of the 600 million people in Southeast Asia carry plastic. And even if they can pay for Netflix, the experience of watching it probably won’t be pleasant. Almost every country in the region has internet speeds below the global average — oftentimes way below.

They can’t price like this, have a shitty catalog and not offer downloads. It just won’t work.

I have always said – the real competitor in Asia is piracy. Note :: http://www.nokpis.com/2016/04/18/the-actual-state-of-ott-in-emerging-markets/

Netflix, HBO and Amazon will be global video players – also it is too early to tell if FB, Apple and Google will sit this party out since it is such a minefield of losses. We know Apple keeps trying to alter the cable game but that is a USA only thing and their buy on demand model will someday not work out well but for now one gets the best content on PPV. I still buy/rent far too many movies but maybe that is cause I have kids and I want new releases so I can skip the theatre.

My take is that this problem will never be globally solved and that in each GEO it may take on different patterns – just look at India with HotStar having HBO content :: http://www.hotstar.com/tv/game-of-thrones/8184. Word is that HotStar has essentially clubbed to death any of the other major players in India and I expect you will see some casualties soon. I honestly have never understood why HOOQ tried to be India – it is a race they will never win. Seems iFlix is sidestepping the India train wreck and focusing on other winnable territories.

I portend that Netflix is gonna keep bleeding and the investors might start to tire of it. Amazon has yet to show their global video hand but I suspect it will challenge Netflix in certain parts of the world. I wonder if HBO will do more HotStar like plays – I think they should. iFlix seems to be the local or strong emerging markets player to watch and it pains me to say it but I think HOOQ is toast but most folks probably labeled anything built by Singtel as toast anyway. I guess it just depends on what shade of burnt you acknowledge.

As a consumer of stuff – well, I still use my Mom’s Netlfix account, pay for HBO (VPN goodness from viewquest) and continue to wait for Apple to do something cool with the TV.

Shots fired…