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newswangerd 1 days ago [-]
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.
johnsmith1840 22 hours ago [-]
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.
TheCoelacanth 2 hours ago [-]
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.
graceful6800 22 hours ago [-]
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
otterley 21 hours ago [-]
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.
simtel20 21 hours ago [-]
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.
otterley 20 hours ago [-]
Do you seriously believe Apple and Disney are going to lose to Netflix over CDN costs? If so, let's place counterwagers.
simtel20 26 minutes ago [-]
That is not what I said. I am challenging your dismissal of the cost of bandwidth is material to the success of a cdn
> 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
My personal experience is that e.g. if your cdn can serve ads, but not video, then you lose subscribers.
Extrapolating from that, if you lose money on every video a subscriber plays because of DTO costs, then you can't stay in business. Netflix and Amazon can afford their cdn. Maybe Disney can stay in business because they have the scale to get to the right COGS to meet their forecast, but for sure in the past they are accused of misleading investors as to their costs and revenue and their future revenue forecasts[1]. Since that's still underway, we may even know what part of their break-even calculations CDN costs are in the future.
It’s easy to forget now that Netflix Original used to be a marker of quality. Losing Holland was an unforced error.
FiatLuxDave 14 hours ago [-]
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.
Andaith 12 hours ago [-]
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.
dash2 12 hours ago [-]
> We pay $27/month for Netflix premium and I can say unequivocally that it’s not worth it. I continue paying for it
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.
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.
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.
AI isn't gonna help you magic a CDN into existence
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.
> 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
My personal experience is that e.g. if your cdn can serve ads, but not video, then you lose subscribers.
Extrapolating from that, if you lose money on every video a subscriber plays because of DTO costs, then you can't stay in business. Netflix and Amazon can afford their cdn. Maybe Disney can stay in business because they have the scale to get to the right COGS to meet their forecast, but for sure in the past they are accused of misleading investors as to their costs and revenue and their future revenue forecasts[1]. Since that's still underway, we may even know what part of their break-even calculations CDN costs are in the future.
1. https://www.ktmc.com/new-cases/the-walt-disney-company/?hl=e...
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.
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.
Sounds like a buy signal?