Comments
clrmoney
6/8/2017 10:56:07 AM User Rank Platinum
Netflix Taking Hits
Netflix is one of the most popular websites to purchase movies etc. So them taking a loss probably want hurt them as much because I think they will gain it all back some way.
mhhf1ve
6/8/2017 3:13:15 PM User Rank Platinum
It's not as risky as HBO?
Netflix can still rely on licensed content to keep some subscribers, so its original programming just has to keep people from switching to other providers that might have the same content.
HBO seems to be in a much more risky position -- it lives or dies by the content it creates. There's not much of a safety net for HBO (other than being owned by a larger corporate entity).
Adi
6/9/2017 6:24:24 AM User Rank Author
Re: It's not as risky as HBO?
mhhf1ve - HBO's ace in the hole is that it is distributed by payTV providers. So it's got a linear multiplex that traditional pay TV subscribers are paying for, which continues to generate revenue. And that's a base of more than 96 million households in the US alone, plus the relationships that it has with providers worldwide, like Sky in the UK, Germany, Italy for example. It's also part of the operator's TV Everywhere services, and offered as an option with skinny bundles. So there's a solid and sizeable base that is keeping things relatively stable for the company -- and it's not spending $6 billion annually on original production.
Of course that base is declining steadily with cord-cutting, but it's large enough that it will taketime -- and will probably not disappear entirely for the forseeable future.
mhhf1ve
6/9/2017 12:07:07 PM User Rank Platinum
Re: It's not as risky as HBO?
HBO's distribution is somewhat of a double-edged sword, though. If it can't continue to produce hit shows and starts to have a string of flops, its network of distributors could vanish and leave HBO without much of its own direct-to-consumer channels. It's starting to develop them now, but it could find itself in an ESPN situation if its show quality dips too much.
afwriter
6/10/2017 6:09:49 PM User Rank Platinum
Inevitable
It was inevitable that Netflix would have to start canceling shows that weren't doing well or costing too much to produce. There is no way that they could maintain the trajectory that they were on as far as content production. I don't think that they have anything to worry about as long as they don't continue to produce content beyond their means.
Ariella
6/11/2017 1:09:20 PM User Rank Author
Re: Inevitable
@afwriter Absolutely, it's impossible to have every single show work out to be a hit when you've expanded beyond just a small handful of selections. Still, the experiement should be instructive in the company's plans for future shows, so it is not all a wasted effort.
elizabethv
6/14/2017 9:01:17 AM User Rank Platinum
Re: It's not as risky as HBO?
@mhhf1ve - Netflix definitely has a decent safety net to keep viewers interested, even through shows that may not net as much viewership as they need to continue creating the shows. Especially now that they have so much Disney content - and everyone knows Disney is gold. But I think HBO must have some of a safety net through licensed content as well. It's the reason I keep my HBO subscription on Amazon (that I did initially get to watch Game of Thrones) but now I watch Last Week Tonight and then the movies they have, which are actually fairly new and decent movies.
elizabethv
6/15/2017 8:46:14 AM User Rank Platinum
Re: Inevitable
@Ariella - I would completely agree that even failed shows aren't a wasted effort. It helps them to understand what audiences are looking for, what works and what doesn't. Copy-cat ideas are just that and they should probably steer clear of them anyway. Making a Murderer is a great example of this. Aside from generic crime dramas there isn't much out there that is really similar to the story. And within days everyone was watching/talking about it. They can make massive hits, no one doubts that at all. And a few stumbles along the way should just be expected. We all make them.
JohnBarnes
6/26/2017 2:46:08 PM User Rank Platinum
I'm guessing it's just basic entertainment economics
Competition between movies, pop songs, old broadcast TV shows, and comics titles -- not to mention popular theatres -- has long had a pattern like this, with a relative newcomer having a string of hits and then an abrupt pullback as it becomes more mature.
In the startup phase, all the eggs are in a very small number of baskets, which get a great deal of attention, and changing baskets means moving nearly all of the invested capital to something else AND waiting for the "something else" to be built. So quitting is relatively expensive and keeping things going is relatively cheap.
Once the stable is much larger, and the brand more familiar (and thus less distinctive), the ratio of costs of quitting versus sticking moves more towards quitting.
I would guess Netflix is just reaching a more mature point where the gamble of trying something else has a higher expected value than the sure thing of building on an existing success.
afwriter
6/28/2017 11:48:32 PM User Rank Platinum
Re: Inevitable
Now they are canceling shows that have only been out for a few months. It will be interesting to continue to watch this trend.
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