- That Netflix has a infrastructure competitive advantage. That probably used to be true with microservices, chaos monkey, and all that. But while a big streaming platform isn't something a couple engineers throw together in a weekend, it's a pretty well understood problem. It's content that attracts subscribers.
And that content doesn't really have economies of scale. Having twice as much good content probably costs about twice as much which means you ned to charge about twice as much which doesn't offer a compelling advantage over just having two separate subscriptions.
Netflix's infrastructure advantage was/is in Open Connect. They work with ISP's and ship servers that locally cache terabytes of content as close as possible to the customer to reduce bandwidth costs for themselves and ISP's. Nowadays with higher and cheaper bandwidth there are many CDN's that have similar arrangements with large and small ISP's that Netflix's advantage is not as significant anymore. But even today Netflix's streaming experience is noticeably superior, just not enough for it to be a selling point anymore.
In regards to content scaling, that seems right on the face of it. But, Netflix had been pushing the idea of "Amortization of Content" in that content once created has an extremely long lifecycle, and essentially a long tail. As people will always watch older content. And a lot of times people would miss it, and things start trending later on. However, quality of content matters. If you're spending money on poor quality content. People won't watch it once, let alone multiple times across time. I feel that's what Netflix had been doing lately. And lost their competitive edge, as competitors increased the quality of their shows.
People do watch at least certain types of older content. They watch movies from the earlier part of last century.
But I'm not sure how much money is in there, especially for a subscriber service--which mostly justifies licensing costs by retaining or gaining subscribers.
I'd also observe that Netflix has allowed their back disc catalog to deteriorate. Which suggests a fairly comprehensive back catalog doesn't necessarily pay the bills.
Yeah the author suggests as such..."it turns out, though, that Netflix gets and keeps customers with new shows that people talk about, while most of its old content is ignored", again lies the difficulty in churning out new hits with new IP.
- That Netflix has a infrastructure competitive advantage. That probably used to be true with microservices, chaos monkey, and all that. But while a big streaming platform isn't something a couple engineers throw together in a weekend, it's a pretty well understood problem. It's content that attracts subscribers.
And that content doesn't really have economies of scale. Having twice as much good content probably costs about twice as much which means you ned to charge about twice as much which doesn't offer a compelling advantage over just having two separate subscriptions.