Netflix Gets It
Here’s one Marc Cuban post that I almost totally agree with. I don’t care for the cable companies’ / studios’ heavy handed game of locking away content and trying to extract dollars at every turn (as with Hulu) – but I can definitely see where the incentive is. Cuban calls it “found money” – as in, video delivered over the Internet is a brand new revenue stream. Netflix pays money to secure rights for its Watch Instantly service.
The cable companies have basically had a “closed” subscription-based business model – pay for play – that’s worked phenomenally well for the past few decades (as Steve Jobs says, “open” doesn’t always win). The average citizen is literally, hooked on cable – seeing it as a necessary monthly expense, equivalent to electricity or water. And the cable companies / studios will naturally explore other paid business models before the open ones. Lucky for the cable companies / studios, Netflix has done a lot of the groundwork for them. Customers pay a monthly fee for video on demand.
In retrospect, Netflix has done some really smart things over the years:
- Recognized that their DVD over the mail business had to transition to streaming online.
- Made the transition seamless to the end user as possible. Retain the same “subscription, all you can watch, queue” concept. Add the Watch Instantly service to present subscriber accounts, add “Watch now” buttons to the website wherever they might add a disc to their queue.
- Provide Watch Instantly beyond the web browser: game consoles, Blu-Ray players, TVs, iPhone / iPad apps.
- Make the Watch Instantly experience exactly the same across devices – no wrinkles like “on the XBOX you watch different content.”
- All the way, retain excellent customer service – I’ve returned scratched discs for no extra charge, gotten refunds when the service goes down, etc. It’s a dream compared to the litany of cable company problems.
Netflix is basically doing a lot of the work the cable companies / studios should have done. They are increasingly, best positioned to bring about my oft-dreamed of “digital video nirvana.”