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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.
freehe
7/27/2017 7:20:09 PM
User Rank Platinum
Re: Netflix Taking Hits
@clrmoney, I agree. I don't think it is a cause for alarm. Though as my grandmother would say nothing last forever. We will have to wait and see if this is a trend or temporary.
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.
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.
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
6/15/2017 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.
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.
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
6/29/2017 5:49:58 PM
User Rank Platinum
Re: I'm guessing it's just basic entertainment economics
@JohnBarnes that as very well stated. They are moving past the idea of throwing everything at the wall and seeing what sticks and are now maturing to the level of focusing on their big sellers and trimming the fat elsewhere to loosen up the budget.
JohnBarnes
6/29/2017 10:19:32 PM
User Rank Platinum
Re: I'm guessing it's just basic entertainment economics
The trick in entertainment economics is that the one really scarce resource is consumer time; audiences ARE the product (most of the revenue comes from advertising and tie-ins, directly or indirectly) and an audience is People X Time, and they can only watch/listen to so much per year. So profitability rests on getting people to commit time -- and a new entrant has several advantages, chiefly:
novelty (just doesn't look like anything else yet, as any copy will be imperfect and self-copying can't happen till there's something to copy)
not having been bid up by essential talent yet (when a show is new its star is not essential and can be fired almost at will; after a couple of seasons you pay them whatever they ask and are grateful they didn't know how much they could have asked for)
small scale (in entertainment the devil is really in the details, and if you don't have much original content yet, you can have more people paying more attention to each detail).
So there are big advantages to being a start up -- that audience that you sell is easier to please, cheaper to attract, and within your resources to really please.
All that goes away with maturity -- and then you start behaving like every other content producer.
elizabethv
7/26/2017 9:12:24 AM
User Rank Platinum
Re: I'm guessing it's just basic entertainment economics
@JohnBarnes - From what I've seen, Netflix seems to take a lot of chances on novelty type shows. How to Make a Murderer, Orange is the New Black (kind of,) 13 Reasons Why. are all to some extent novelty shows. And they've done really well for Netflix. But I would think that area would be the most volatile of them all.
freehe
7/27/2017 7:22:44 PM
User Rank Platinum
Customer Base
Luckily Netflix has a diverse pool of customers and offer different content in different ways to its customers. They are not content dependent as HBO but still have areas where they can make improvements.
freehe
7/27/2017 7:24:27 PM
User Rank Platinum
Criteria
I wonder if Netflix was being paranoid. I am curious to know what the conditions are for Netlfix to cancel a show. On traditional TV or cable TV several shows experience a reduction in ratings but don't get canceled.
elizabethv
7/28/2017 8:34:19 AM
User Rank Platinum
Re: Criteria
@freehe - Netflix may not wait long to see if a show is going to make it or not before they pull it. It could see them pull a show even with minimal signs that it might not be overly successful. I think their balance is far too precarious to jeopardize. Better to be overly cautious than to regret having it out. Plus, just because a show isn't doing well immediately, doesn't mean they couldn't try to release it again at another time. It could be timing - was something else playing that had more popularity and over-shadowed it? Was the topic not "hot" at the moment? Was there a decent amount of advertising? Audience anticipation? All of these things can play into the success of a show, and none of them are really dependent on it being a good quality show.
Re: Criteria
Yes, I would be curious as well to see what triggered the cancellation? I am sure Netflix made a decision after data analysis.
Netflix bombs
I personally had cancelled my streaming from netflix months ago. I loved it when I first got it for the family but it just seems to be bombing out. They are ccancelling shows and doesn't seem like they are adding more new ones or anything. I personally watch hulu and download movies and shows to my travel drive.
Don't you wonder why netflix is cancelling shows? Are they slowly going to disminish Netflix?
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