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Comment by lefstathiou | Hacker News Reader

Netflix was forced into this. For a while (I no longer look at the data) content costs were increasing at 8-10% per year which is unsustainable for distributors. The CEO of DISH once suggested on an earnings call that there should be anti trust inquiries into content pricing.

Additionally, Netflix's international growth was hampered by their inability to efficiently negotiate international distribution rights.

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Right, this is the whole end game. They own the content so they can sell it forever to everyone and their library only grows. The Studios and traditional movie powers saw all the interest and decided to squeeze out as much juice as they can. I wouldn't be surprised to see Netflix and Amazon eventually start releasing their movies to the theaters directly and then they later add it exclusively to their streaming platform.

They are already releasing movies to cinemas. Just the exclusive part isn't happening which made cinemas unhappy. I think they mainly release to cinemas to qualify for the Oscars.

I wonder if I have a hd movie, how much does it cost to put them in the cinemas?

https://drafthouse.com/news/see-your-film-on-the-big-screen-...

Seems the Drafthouse offers this deal.

I don't know who handled distribution but Manchester by the Sea was an Amazon original production that was in theaters but will be part of Prime Free streaming in a few months.

I think you have that backwards.. Manchester by the Sea distribution rights were picked up by Amazon (for ~$10M at Sundance last year). I don't believe they were involved at all in the production.

I like that Netflix invests to produce their own shows, but I feel like the end game of this is that Netflix becomes just another studio. I'd like a world where I can legally watch any movie for a small fee better than a world where I have to subscribe to ten different Internet-TV-Stations to get access to their respective content silo.

It's not going to be 'just another studio' unless the other studios start making their content easily accessible both:

a) online

b) internationally

Most people in the US have no idea how annoying it is to deal with content restrictions. It sucks to be an internet company in an industry stuck in a pre-internet licencing worldview.

TV networks were also retracting their content from Netflix when they started seeing that it could one day replace them. It's good that Netflix managed to get big enough to publish so many shows and soon movies, because otherwise it would've probably started to go downhill.

It's not the distributors fault really. Netflix is not only in direct competition with it's suppliers, but it's actually killing them. Before netflix created its own content, it's shows were all created by cable channels, whose viewers it was taking at a fast rate.

Netflix made "rerun" content valuable. The suppliers were right to charge more.

If Netflix actually destroys cable, it would have had no suppliers at all. Creating their own content or buying it straight from production companies was always going to be the next step.

Business 101 suggests never getting your business in a situation like that though.

They are a distributor, how do they avoid getting into that situation if not by producing their own content?

I'm by no means an expert on distribution tactics or arguing that I know more than Reed Hastings. I'm just stating if you're in that position you can get in trouble quick. To answer your question though, I would suggest making it so that the producers need you to do their distribution because you can do it far better than they could. Apple's app store might be a good example of this for the time being.

I think they smartly took advantage of Hollywood undervaluing the streaming market early on and built an entirely new market segment on the backs of their content. That wasn't sustainable. Hollywood realized (too late) that they created a monster and started shaking them down. Netflix's only real option was to produce their own content to avoid being under Hollywood's thumb.

I think Netflix made some mistakes on their journey (that whole "we're splitting our streaming/dvd business in two to help the consumer" messaging was particularly stupid) but their transition into original programming seems necessary to me, and it's paying off.

As a subscriber, I wish Netflix was as good as it was 5 years ago before Hollywood wised up, but given Hollywood did wise up not sure I can recommend a better strategy for Netflix than what they've been doing even with the benefit of hindsight (my only real criticism is they seem to focus on big prestige shows instead of cheap comfort TV like reality shows.)

The reality-style Netflix Originals seem to be coming. Last year they hired Brandon Riegg, among other notable producers in that domain.

Some of their "unscripted" content is already out: Terrace House, Ultimate Beastmaster, etc.

Yeah that seems to be the way to go to me, i guess maybe they reached the same conclusion.

HBO is a premium product, you pay for it in addition to cable. Netflix is an all in one product, you pay for it to replace cable. Don't try to be HBO, be every cable tv station.

Is HBO still a premium product? We watch it through HBO GO/NOW or something like that without cable.

All this Netflix talk makes me wish I never ever tried to "play" the stock market with Netflix. I learned a very valuable lesson thanks to them & Amazon. It's called buy & hold on companies you use & love. Needless to say, overall I agree that they've ran their business extremely well. That whole dvd/stream announcement is hardly a distant memory. Also they deserve credit for listening to their customers & trying to fix that pretty immediately.

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