One thing I’m starting to see more and more is that software is no longer as big of a moat as it once was. Netflix gets to cruise along with a tech like evaluation because it pioneered online video streaming software. They caught the incumbents off guard and now the incumbents are starting to chip away at their tech moat.
I think we’re going to start seeing this happen more broadly across the industry. AI will get to a point where it becomes easy to clone any app or service. At that point software is no longer your moat. Your moat is going to be content, community and branding. This kind of makes me wonder if open source get even more popular. If software is no longer a moat, then you may as well release it for free and cash in on the goodwill and community.
Not gonna happen software being cheaper simply moves the goalpost farther than before. Customers will expect and demand even greater capability and quality.
A team of highly skilled engineers at netflix are gonna beat you massively at their own game.
Acting like all code is flat and you just have to catchup to their level is false thinking. Netflix will be running 100x more AI than you with much better talent than you.
I don't think software in general is flat, but video streaming is a mature technology and it's pretty easy to get good enough video streaming that customers don't care about it as a differentiating factor.
If 8k TVs or VR suddenly take off, they might be able to take advantage of it, but right now it's only a minor advantage (in cost savings primarily). Customers choose based on content, not based on who's better at video streaming.
All that matters is that the CDN is good enough to serve viewer traffic. If your CDN isn't up to snuff, the outcome is that the viewer can't play the video they want. AFAIK, no Netflix competitor is suffering from insufficient CDN resources.
Sure, some choices make the cost of CDN higher or lower, but it's not material enough of an impact on competitors to matter.
The actual moat for streamers has been, and always will be, the breadth and popularity of their exclusive content. Netflix will die if they don't continue to produce exclusive content that audiences will subscribe for.
Everything about a cdn is cost per MB, and Netflix has that priced at I don't know, I imagine almost zero, and maybe negative because they host with ISPs, which other cdns can't do. Which means their competitors must spend infinitely more money until they hit a scale where they can start to follow in Netflix's parh. Also, I imagine that buying hardware now, especially DRAM is four or more times as expensive as it was when Netflix paid for a lot of their hardware, so yeah, that.
I'm wondering if anyone in charge at Netflix is going to wise up and realize that their biggest problem is their UI.
Years ago, if you asked a programmer why the Netflix UI worked the way it did, the answer was that it was designed to hide how small their catalog actually was. Then, Netflix became quite successful and their UI became an industry standard, with Amazon, Youtube, etc. all copying it or aspects of it. So why mess with success?
But now Netflix is in a situation where they have a dearth of new good content, but now they also have a fairly substantial catalog which has been built up over more than a decade. And they are still sticking with a UI designed to hide the size of their catalog. I often talk with friends and family who have Netflix and they are not aware of shows which they might like, simply because the Netflix algorithm hasn't shown it to them.
I suspect that making one simple UI change could have as much effect on their fortunes as adding $hundreds of millions of new content. Simply only display the icon for a given show once in any given session. In other words, if say "Rebel Moon" is shown under Sci-Fi movies, only show it there, not also under Action movies or some other row. They've already seen it once and clicked past, so showing it again is wasting a space for some other show they might like.
People are leaving Netflix because they click around for too long trying to find something they want to watch. The problem is perceived as lack of good new content, but the real problem might just be the clicking around.
They've also made it harder to go to content in that catalog. You used to be able to get to the sidebar relatively easily, even if you'd swiped right a dozen times, by just going up|down, then left. then you were at the menu and about 2 clicks away from search.
Now? Now the search bar is at the top. If you've scrolled down through categories while looking for something, then decided to just use search, or to just look in movies or shows, you now gotta scroll up & up & up.
One thing I’m starting to see more and more is that software is no longer as big of a moat as it once was. Netflix gets to cruise along with a tech like evaluation because it pioneered online video streaming software. They caught the incumbents off guard and now the incumbents are starting to chip away at their tech moat.
I think we’re going to start seeing this happen more broadly across the industry. AI will get to a point where it becomes easy to clone any app or service. At that point software is no longer your moat. Your moat is going to be content, community and branding. This kind of makes me wonder if open source get even more popular. If software is no longer a moat, then you may as well release it for free and cash in on the goodwill and community.
Not gonna happen software being cheaper simply moves the goalpost farther than before. Customers will expect and demand even greater capability and quality.
A team of highly skilled engineers at netflix are gonna beat you massively at their own game.
Acting like all code is flat and you just have to catchup to their level is false thinking. Netflix will be running 100x more AI than you with much better talent than you.
I don't think software in general is flat, but video streaming is a mature technology and it's pretty easy to get good enough video streaming that customers don't care about it as a differentiating factor.
If 8k TVs or VR suddenly take off, they might be able to take advantage of it, but right now it's only a minor advantage (in cost savings primarily). Customers choose based on content, not based on who's better at video streaming.
Netflix's moat is their CDN, which is fabulously expensive and complex hardware scattered across the entire planet.
AI isn't gonna help you magic a CDN into existence
How is that a moat?
All that matters is that the CDN is good enough to serve viewer traffic. If your CDN isn't up to snuff, the outcome is that the viewer can't play the video they want. AFAIK, no Netflix competitor is suffering from insufficient CDN resources.
Sure, some choices make the cost of CDN higher or lower, but it's not material enough of an impact on competitors to matter.
The actual moat for streamers has been, and always will be, the breadth and popularity of their exclusive content. Netflix will die if they don't continue to produce exclusive content that audiences will subscribe for.
Everything about a cdn is cost per MB, and Netflix has that priced at I don't know, I imagine almost zero, and maybe negative because they host with ISPs, which other cdns can't do. Which means their competitors must spend infinitely more money until they hit a scale where they can start to follow in Netflix's parh. Also, I imagine that buying hardware now, especially DRAM is four or more times as expensive as it was when Netflix paid for a lot of their hardware, so yeah, that.
Do you seriously believe Apple and Disney are going to lose to Netflix over CDN costs? If so, let's place counterwagers.
I'm wondering if anyone in charge at Netflix is going to wise up and realize that their biggest problem is their UI.
Years ago, if you asked a programmer why the Netflix UI worked the way it did, the answer was that it was designed to hide how small their catalog actually was. Then, Netflix became quite successful and their UI became an industry standard, with Amazon, Youtube, etc. all copying it or aspects of it. So why mess with success?
But now Netflix is in a situation where they have a dearth of new good content, but now they also have a fairly substantial catalog which has been built up over more than a decade. And they are still sticking with a UI designed to hide the size of their catalog. I often talk with friends and family who have Netflix and they are not aware of shows which they might like, simply because the Netflix algorithm hasn't shown it to them.
I suspect that making one simple UI change could have as much effect on their fortunes as adding $hundreds of millions of new content. Simply only display the icon for a given show once in any given session. In other words, if say "Rebel Moon" is shown under Sci-Fi movies, only show it there, not also under Action movies or some other row. They've already seen it once and clicked past, so showing it again is wasting a space for some other show they might like.
People are leaving Netflix because they click around for too long trying to find something they want to watch. The problem is perceived as lack of good new content, but the real problem might just be the clicking around.
They've also made it harder to go to content in that catalog. You used to be able to get to the sidebar relatively easily, even if you'd swiped right a dozen times, by just going up|down, then left. then you were at the menu and about 2 clicks away from search.
Now? Now the search bar is at the top. If you've scrolled down through categories while looking for something, then decided to just use search, or to just look in movies or shows, you now gotta scroll up & up & up.
It’s easy to forget now that Netflix Original used to be a marker of quality. Losing Holland was an unforced error.
> We pay $27/month for Netflix premium and I can say unequivocally that it’s not worth it. I continue paying for it
Sounds like a buy signal?