Netflix is now behaving like a channel, rather than a library. Originally, they had a huge library from which you could choose. Now, they announce "Here are some of the great and varied selection of films coming to our U.S. service in the next few months". Some of those films are decades old. Gradually, their back catalog has shrunk.
Ultimately, I'm afraid this is due to the difference in laws between owning a physical copy of a disk and having the rights to redistribute digital media. Once Netflix had a DVD of some old movie, it was effectively free for them to hold onto it forever, and older DVDs could be siphoned up from a zillion sources for pennies. Netflix would have to pay for new movies, but the maximum they could be charged would be retail price, and once they had the copies, they'd have them forever. Their catalog would only grow.
Digital redistribution, however, severely hampers them. They can't "buy" copies of movies anymore. Instead, they must pay for the right to stream a movie for a certain amount of time to a certain number of users.
It's an unfortunate outcome, and it's all but guaranteed by the way copyright law works. If there were a law change to allow the digital equivalent of "owning one copy" or, say, allowing the owner of a DVD to stream its contents to exactly 1 recipient over the Internet per DVD owned, I think Netflix's catalog would be an order of magnitude larger.
I don't see it as an 'unfortunate outcome' - it is a great outcome because it maximises the total value of the economic pie created by the movie and TV studios. The fact that movie studios can add restrictions when distributing digital content means that they can charge a fee closer to the value that consumers receive. This means (1) the studio shareholders get larger dividends, (2) the industry makes more movies; (3) consumers who are willing to pay get a wider choice; and (4) more people are employed in the industry.
In general it seems to me inefficient to have laws which prevent suppliers from charging fees close to the value they create. For example, if the government says "farmers cannot sell tomatoes for more than $2 per kilo" that would clearly restrict the total size of the 'economic pie' produced by growing tomatoes (shared between farmer and consumer). Similarly if we place restrictions on the kind of agreements that movie producers can negotiate with distributors it also limits the size of the movie industry.
That works well for music. Music services don't have to ask permission, they just have to declare what they broadcast and pay the rights. As a results services like Spotify have almost all albums from all artists (at least the major one).
Why can't we fix the law so movies can work the same?
That is largely driven by the content creators and they don't have nearly as much control over it. They signed the Starz deal before streaming was big and when it came up for renewal Starz wanted more for catalog access than netflix was willing (maybe able) to pay. I would pay more for a bigger back catalog, but i guess I am in the minority.
Not to mention the content creators desperately want to avoid another Amazon/iTunes situation, with one distributor being able to dictate what the market does. They go out of their way to strategically deny licensing things completely to ensure Netflix doesn't have everything at once.
Hulu used to be their great big hope, since it's owned by several media companies, but they seem to have given up on that (even as Hulu has finally been worth using as they finally gave an option to pay and not still see ads).
To some extent this is inevitable and I think ultimately it will be to their detriment. One of the things that struck me during my recent "cut the cable" exercise was that while the offerings on Amazon Prime video were significantly less to my liking than those on NetFlix, if it wasn't on prime I could "buy" it or "rent" it from the same interface almost regardless of what it was. On NetFlix things vanish and then you no longer have access, period. So its fine "in the now" but want to watch an old episode of some show that used to be there and now its off the list.
I suspect that one of the things that Netflix cannot afford using AWS is to have content available that not enough people watch. They end up paying the storage charges with no revenue.
> I suspect that one of the things that Netflix cannot afford using AWS is to have content available that not enough people watch. They end up paying the storage charges with no revenue.
Licensing is a vastly higher cost than the AWS bill. It's all about what they can afford to license.
> I suspect that one of the things that Netflix cannot afford using AWS is to have content available that not enough people watch. They end up paying the storage charges with no revenue.
That is incredibly wrong.
Conservatively speaking, the average film can be stored with 1gb. The Library of Congress has 1.7 million videos (the largest film collection in the world).[0]
1.7PB could be stored on S3 for $54k a month which is, while not insignificant, is almost certainly insignificant compared to Netflix's streaming costs.
Its too bad that netflix wouldnt just do a rev share deal w/ amazon and other media providers so that when I search "$SomethingInPrime" I would get a "not available for streaming" click here to pay $5.99 to rent. Then I can just keep going with my happy life.
Doesn't Netflix run it's own CDN outside AWS? I thought the AWS gear was only for browsing the catalog and actual content delivery is done with custom hardware, preferably at your local ISP.
I suspect that their licensing fees are orders of magnitude more than the distribution costs. The size of the catalog seems to me like it would be limited by the content owners terms more than storage prices.
I love HBO but they are in a different weight class. At the end of the day most customers will see Netflix's catalog vs HBO's and will go with Netflix. I don't think that this is the best way for them to frame this battle.
Remember that the original huge library was comprised of CDs they bought. Streaming was always smaller. Streaming also got more expensive because studios cut much more aggressive content deals. They were forced to create content to stay alive. (This is true across tech - what's flowing through the pipes generally extracts more value than the pipes themselves. The telecom providers went bankrupt while the world thrived on the broadband they provided)
I cancelled too and one of the reasons was their goddam awful UI. As they lost their back catalog they decided that they couldn't let you see what they actually have available, they had to hide their thin selection behind a crap UI. Whatever, fuck holywood, until I can get "spotify for movies" there's always torrents.
It's like a conspiracy to annoy the hell out of the average consumer. I'm not sure why Netflix would be proud of this.
How about we also get Spotify, iTunes and Google Play to step up the exclusives on their music services so I can never have a single place to go to listen to music.
This might be already happening - e.g. in the last few months Drake's album was released exclusively on Apple Music, Kanye's exclusively on Tidal. The back catalogs are mostly everywhere for now, but maybe this is the beginning and major releases from this point on will be exclusives.
Regarding Kanye's album, he went back on what he said about keeping it exclusively on Tidal. It's also available on Spotify, Apple Music, and Google Play Music.
It's a conspiracy to extract as much profit from consumers as possible. If everyone has Netflix, Hulu, Spotify, Prime Video, YouTube and iTunes subscriptions then large rights holders extract more money. It's been said before, but the premium cable TV channel model is what they're going for.
It's not a conspiracy, there's no backroom deals made through a haze of cigar smoke. The value of streaming rights is increasing, non-streaming revenue for the same content is slowly shrinking, there's multiple streaming services out there bidding up the rights to content, and the rightsholders are behaving appropriately according to their incentives.
Remember, part of what made Netflix possible to begin with was the fact that the content they were licensing had already made its money through theatrical runs, cable deals and home video for movies, and original network fees and syndication rights for TV shows. So the content holders only had to worry about marginal revenue over negligible costs -- you can get very little for the content and still come out ahead. As streaming becomes a bigger and bigger piece of the pie, it canibalizes those other revenue channels, and more and more streaming money is required to make it revenue-positive. The market is reacting.
That doesn't really make any sense. Netflix doesn't want you to have a Hulu subscription. They'd love to be the one that has all the content. It's the content creators driving this. They don't want any one distributor becoming too powerful, because that distributor would then have too much leverage over the content creators.
If you account for all the content discrepancies between each online video provider...ditching cable doesn't actually make much economic sense. The one reason I think many people -are- ditching cable is not because it's cheaper (when you're actually paying for it) it's that people are sharing accounts and don't bear the full brunt of the cost.
Conversely, the more market power netflix gains, the better they can negotiate with more rightsholders for more content while piracy -- as a free grey market alternative -- hopefully keeps them from abusing their position too much.
I thought that had already happened, but not with that outcome.
A few years back [0] Netflix was getting too strong, and fearing the iTunes effect the studios pushed back and stopped licensing their best stuff to Netflix.
Still it's not much different from Hulu having exclusive rights to stream airing episodes of television shows. Someone has to be paid for all of this work.
Besides, ITS NETFLIX. Everyone has a Netflix account or a family member's login. If this were done on some other kind of service, then we might reasonably expect a backlash.
> Besides, ITS NETFLIX. Everyone has a Netflix account or a family member's login
That's hilarious, where did you get that idea?
Netflix has roughly 35 million accounts in the US, out of a population of over 300 million. It's the most popular streaming service, but stream isn't that popular yet... internet denizens always forget we are a tiny minority of the US population.
That's not the right solution. The right solution is opening up intellectual property and copyright laws so that unfair and anti-competitive market conditions stopping forming everywhere around them.
Because the companies that profit off our extremist copyright laws control the media, they don't talk about this very much, but copyright, as currently implemented, is extremely unfair for the consumer, to the extent that many consumers break copyright laws several times a day and often don't even know they've done anything illegal.
We need serious intellectual property modernization and reform.
Cable is the worst. I shouldn't have to pay for channels I don't want. It should be à la carte.
Streaming services are the worst. I shouldn't have to subscribe to a half dozen different services. Someone should sell a bundle that gives me access to all of them for a lower price.
Yeah, I've always thought it was weird that people say they wanted "a la carte" but that's been available for years through iTunes and Amazon Video. You can buy individual episodes of practically any show. That's a la carte. Getting a channel isn't a la carte, unless you want every program that channel produces (unlikely).
But a la carte hasn't taken off in streaming services, so now we're recreating channels. Next will be bundles where you can get Netflix and Hulu and Amazon together. Blah.
Unpopular, but without cable subsidizing costs of various networks through packages, we wouldn't have tons of cable channels that grew up to be great, like AMC and FX. The one exception to this is the ESPN subsidy, which is insane. If ESPN could actually be opted out of cable bills would be fairly cheap.
Sling[1] is the closest we can get right now. Eventually, channel subscriptions will be available through something like an App Store and just as easy to manage as an recurring subscription app.
How is netflix any different. I don't care about Disney movies or all teh kids content they have. Should I get an a la carte netflix plan with only the content I want? Of course not.
This explains why I still buy physical copies of music and TV shows when possible. If I can't actually own it then I don't own it. Can't fleece a sheep that won't come to the barn.
This is reminiscent of 'patented' in consumer literature.
In my mind, exclusive content is great for a business and bad for the consumer but for some reason people think its a good idea to market it to consumers. If you said Netflix has popular XYZ shows and they stopped being available elsewhere, it would avoid people realizing that Netflix is now playing the same games as the cable mafia did/does and instead people would just be happy that they could watch things fully on demand with all the conveniences of netflix.
I completely agree. Exclusive deals are anticompetitive.
I can understand why they would market it. If you love Disney, now you know that you need to have a Netflix account to watch it, so Netflix is using it to attract customers.
> for some reason people think its a good idea to market it to consumers.
I'm skeptical of the assertion that most people care, at all. Outside of specific circles (overrepresented on HN), I know vanishingly few people who are willing (able?) to tie company's actions to their market-level consequences.
Marketing this seems like a no brainer: allowing consumers to think this feature isn't exclusive to you just means that they're more comfortable switching to or picking your competitors. Being clear about exclusivity means that you're shifted well up the "must-have" spectrum for many consumers.
totally agreed that US consumers != typical HN reader. and also agreed on it being possible the good outweighs the bad from a user acquisition standpoint.
"I'm skeptical of the assertion that most people care, at all" - agreed BUT - do you think them advertising exclusiveness is something people care about? because if only a few people remember its exclusive (and wouldn't otherwise have picked up netflix) then it could be that the effect of the consumers paying attention and being annoyed is greater than those converted by exclusiveness
Why September if the deal started in 2016? It covers movies that premiere in 2016 or later, and September is nine months after the January 29 release of The Finest Hours[1], the first Disney movie expected to be exclusive to Netflix.
[1] — I earlier opined that Zootopia would kick it off, but The Finest Hours was Disney's first 2016 release and since 7-9 months is the typical wait for a pay-TV window, it seems Disney movies will be on Netflix 9 months after release.
What? netflix's market cap is ~25% of what disney is worth, I would be shocked to see disney or really any company make such a large acquisition without it really just being a merger.
> From September onwards, Netflix will become the exclusive US pay TV home of the latest films from Disney, Marvel, Lucasfilm and Pixar.
Does that mean we will have to pay to watch them? Makes sense from a market standpoint since they are likely to be highly sought after but this pay per movie looks like new turf for netflix.
Perhaps it shouldn't be too surprising given the ongoing spat between Amazon and Disney. Sad to see we are at a place where competition is high but rarely makes the best decisions for users.
I would think "Pay TV" refers to monthly subscription TV, as opposed to free over the air TV, and a generic term for cable/satellite. Pay per movie is usually called pay per view.
I would have assumed the US pay TV Home of the latest films from Disney and its subsidiaries would be the Disney Channel?
You'd think but even historically that's been pretty rare. It's so family focused that a large amount of content isn't appropriate for their audience. I thought Freeform (formerly ABC Family) was going to get some of it, but I guess guaranteed revenue from Netflix is worth it in a world of declining cable subscriptions.
I agree it's a bit confusing but I think they mean "pay TV" in the sense that Netflix costs money. So these movies won't be available on HBO or Showtime or any other cable networks.
Readit News
Digital redistribution, however, severely hampers them. They can't "buy" copies of movies anymore. Instead, they must pay for the right to stream a movie for a certain amount of time to a certain number of users.
It's an unfortunate outcome, and it's all but guaranteed by the way copyright law works. If there were a law change to allow the digital equivalent of "owning one copy" or, say, allowing the owner of a DVD to stream its contents to exactly 1 recipient over the Internet per DVD owned, I think Netflix's catalog would be an order of magnitude larger.
In general it seems to me inefficient to have laws which prevent suppliers from charging fees close to the value they create. For example, if the government says "farmers cannot sell tomatoes for more than $2 per kilo" that would clearly restrict the total size of the 'economic pie' produced by growing tomatoes (shared between farmer and consumer). Similarly if we place restrictions on the kind of agreements that movie producers can negotiate with distributors it also limits the size of the movie industry.
This can be easily solved. We solved it with music.
https://en.wikipedia.org/wiki/Compulsory_license#United_Stat...
Why can't we fix the law so movies can work the same?
Hulu used to be their great big hope, since it's owned by several media companies, but they seem to have given up on that (even as Hulu has finally been worth using as they finally gave an option to pay and not still see ads).
I suspect that one of the things that Netflix cannot afford using AWS is to have content available that not enough people watch. They end up paying the storage charges with no revenue.
> I suspect that one of the things that Netflix cannot afford using AWS is to have content available that not enough people watch. They end up paying the storage charges with no revenue.
Licensing is a vastly higher cost than the AWS bill. It's all about what they can afford to license.
That is incredibly wrong.
Conservatively speaking, the average film can be stored with 1gb. The Library of Congress has 1.7 million videos (the largest film collection in the world).[0]
1.7PB could be stored on S3 for $54k a month which is, while not insignificant, is almost certainly insignificant compared to Netflix's streaming costs.
[0] https://www.loc.gov/about/fascinating-facts/
However, as others have pointed out, these moves are about licensing deals with the content providers.
Edit: My point is that storage cost of their content is basically a non-factor in their decision making process.
I suspect that their licensing fees are orders of magnitude more than the distribution costs. The size of the catalog seems to me like it would be limited by the content owners terms more than storage prices.
How about we also get Spotify, iTunes and Google Play to step up the exclusives on their music services so I can never have a single place to go to listen to music.
http://www.theverge.com/2016/4/1/11343526/kanye-west-life-of...
Remember, part of what made Netflix possible to begin with was the fact that the content they were licensing had already made its money through theatrical runs, cable deals and home video for movies, and original network fees and syndication rights for TV shows. So the content holders only had to worry about marginal revenue over negligible costs -- you can get very little for the content and still come out ahead. As streaming becomes a bigger and bigger piece of the pie, it canibalizes those other revenue channels, and more and more streaming money is required to make it revenue-positive. The market is reacting.
Conversely, the more market power netflix gains, the better they can negotiate with more rightsholders for more content while piracy -- as a free grey market alternative -- hopefully keeps them from abusing their position too much.
A few years back [0] Netflix was getting too strong, and fearing the iTunes effect the studios pushed back and stopped licensing their best stuff to Netflix.
0: http://www.dailytech.com/Hollywood+Executives+Fear+Netflixs+...
Is there any app like that but standalone, where you don't need a special speaker for it?
Still it's not much different from Hulu having exclusive rights to stream airing episodes of television shows. Someone has to be paid for all of this work.
Besides, ITS NETFLIX. Everyone has a Netflix account or a family member's login. If this were done on some other kind of service, then we might reasonably expect a backlash.
That's hilarious, where did you get that idea?
Netflix has roughly 35 million accounts in the US, out of a population of over 300 million. It's the most popular streaming service, but stream isn't that popular yet... internet denizens always forget we are a tiny minority of the US population.
Everyone?
How about no?
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Because the companies that profit off our extremist copyright laws control the media, they don't talk about this very much, but copyright, as currently implemented, is extremely unfair for the consumer, to the extent that many consumers break copyright laws several times a day and often don't even know they've done anything illegal.
We need serious intellectual property modernization and reform.
I'm not real optimistic that people will ever come to see exclusive media deals as contracts designed to increase revenues.
Streaming services are the worst. I shouldn't have to subscribe to a half dozen different services. Someone should sell a bundle that gives me access to all of them for a lower price.
But a la carte hasn't taken off in streaming services, so now we're recreating channels. Next will be bundles where you can get Netflix and Hulu and Amazon together. Blah.
http://www.slate.com/blogs/moneybox/2013/01/26/cable_unbundl...
[1] https://www.sling.com/
Now how is that any different from cable?
Dead Comment
In my mind, exclusive content is great for a business and bad for the consumer but for some reason people think its a good idea to market it to consumers. If you said Netflix has popular XYZ shows and they stopped being available elsewhere, it would avoid people realizing that Netflix is now playing the same games as the cable mafia did/does and instead people would just be happy that they could watch things fully on demand with all the conveniences of netflix.
I can understand why they would market it. If you love Disney, now you know that you need to have a Netflix account to watch it, so Netflix is using it to attract customers.
I'm skeptical of the assertion that most people care, at all. Outside of specific circles (overrepresented on HN), I know vanishingly few people who are willing (able?) to tie company's actions to their market-level consequences.
Marketing this seems like a no brainer: allowing consumers to think this feature isn't exclusive to you just means that they're more comfortable switching to or picking your competitors. Being clear about exclusivity means that you're shifted well up the "must-have" spectrum for many consumers.
"I'm skeptical of the assertion that most people care, at all" - agreed BUT - do you think them advertising exclusiveness is something people care about? because if only a few people remember its exclusive (and wouldn't otherwise have picked up netflix) then it could be that the effect of the consumers paying attention and being annoyed is greater than those converted by exclusiveness
http://www.usatoday.com/story/tech/2012/12/04/netflix-outbid...
Why September if the deal started in 2016? It covers movies that premiere in 2016 or later, and September is nine months after the January 29 release of The Finest Hours[1], the first Disney movie expected to be exclusive to Netflix.
[1] — I earlier opined that Zootopia would kick it off, but The Finest Hours was Disney's first 2016 release and since 7-9 months is the typical wait for a pay-TV window, it seems Disney movies will be on Netflix 9 months after release.
Does that mean we will have to pay to watch them? Makes sense from a market standpoint since they are likely to be highly sought after but this pay per movie looks like new turf for netflix.
Perhaps it shouldn't be too surprising given the ongoing spat between Amazon and Disney. Sad to see we are at a place where competition is high but rarely makes the best decisions for users.
I would have assumed the US pay TV Home of the latest films from Disney and its subsidiaries would be the Disney Channel?
I'm not paying for 3-4 streaming services with all exclusive rights, nor i'm willing to constantly change apps for finding the right movie.
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