VOD : Linear is old tech - on demand is the future

Originally Posted by Chris

Epic quote from Netflix spokesman:

to the surprise of (almost) nobody in this thread.

[denphone]

Quoting Victor Meldrew's famous catchphrase "I don't believe it!!

[1andrew1]

Originally Posted by Chris

Epic quote from Netflix spokesman:

to the surprise of (almost) nobody in this thread.

I'm sure that means we can again extend the predicted demise of linear telly by another ten years, this time to 2045.

[jfman]

I, for one, am stunned that they’re willing to spend the huge tens of thousands a year it costs to operate a linear channel.

[OLD BOY]

Originally Posted by jfman

I, for one, am stunned that they’re willing to spend the huge tens of thousands a year it costs to operate a linear channel.

Now that’s funny, jfman!

[1andrew1]

Originally Posted by OLD BOY

Now that’s funny, jfman!

[OLD BOY]

Originally Posted by harry_hitch

Hello Old Boy. I will not be returning very often, you will be pleased to know. In terms of what happened to, me well I got married and brought a house and much to my own amazement, joined SKY!! despite all my bad experiences with them in the past. As a result, I felt it was wrong of me to comment on a Virgin Media forum. Although I could not resist looking to see what the latest on your thoughts on this subject were. it appears I can not resist replying either.

If Netflix want to release viewing figures, it will be very interesting. I have said before Netflix et al, are just replacing DVD's in terms of people not watching linear TV. Sky etc know their viewing figures and will charge advertisers accordingly. Netflix et al will either have succumb to adverts or hike their prices up massively, or and, I am sure you have seen Netflix have, over the years, started selling shows (Orange Is The New Black plus a couple of smaller shows) to linear channels too. Selling shows to linear channels is probably the best way for them to keep there subscription prices down.

To my mind Netflix et al have the following options to survive - Sell content to linear channels, Sell content to their VOD competitors, Put prices up more (look at how much BT Sports costs now compared to when they started) or go to advertising?

What would you do if you were in charge of Netflix? How are you paying off your massive debt, keeping customer costs down without advertising (although, technically, they are advertising through the backdoor by selling The Home Edit products exclusively with John Lewis and Partners) and still producing enough original content to keep justifying the cost you charge by the year "2035" let alone by 2025 - which we all know was your original date?

Please give us your choice. It is your argument that VOD will take over and kill linear. How do you, personally, see it happening when subscribers even out, there is no more real growth, the creditors stop the cash and their debts continue to need to be repaid?

I was pleased to hear that things have gone well for you since you last contributed to these forums, Harry.

I agree that you can see Netflix as simply replacing the DVDs, but I have always thought that streaming was so much better as it avoided having to find storage space for the physical content, and trying to find that DVD you were looking for was always a pain!

If you were a regular purchaser of DVDs, or you if you preferred to rent them out, Netflix is so much cheaper. I think I must be watching more TV series via Netflix now than from my recordings (I watch very little live, as you may recall).

As for Netflix’s viability and what I would do, I agree with their idea of building up the original content first - that is important, because content is king. It is why Netflix is the most popular of all the streaming services.

There will come a point at which Netflix will be able to scale down on the number of new commissions it makes because they will have such a quantity of good stuff in their library, it would take years for anyone to watch all the programmes that appealed to them. This would reduce the current levels of expenditure needed, and all the time, as Netflix extends worldwide, it will be picking up new subscriptions.

There are two other things I would do about the content. First, I would make some of the older stuff available to other providers to generate a further income stream. Secondly, I would enable all customers to be able to see a huge range of additional content belonging to third parties on a PPV basis. Accordingly, Netflix could be a one-stop shop for any programme that subscribers wanted to watch. There could be additional subscription tiers enabling viewers to watch a limited number of those PPV shows in a month as an alternative for paying extra for each view.

I think Netflix has a big advantage over most other forms of viewing, not only because of the amount of original content, but also because it is free of advertising. However, I do think that Netflix should think about making lower packages available with perhaps more limited choices but with advertising included. Under no circumstances should they introduce advertising slots to their top subscription packages, and the CEO is on record as having agreed with that principle. However, if they wanted to introduce sponsors for their titles, I would not object to that - it would be a nice little earner without disrupting the viewer’s evening.

Another source of useful income could be established by setting up a music option. They could have a ‘live’ channel with continuous music videos, they could have videos of concerts and of the artists themselves. They could introduce an app, very much like Amazon Music or YouTube Music, that you could play on any suitable device and in your car. I think there is plenty of room to expand beyond what we know and love Netflix for at the moment. Perhaps Netflix could have their own set top boxes as well.

In short, there are lots of options open to Netflix to increase revenue and to start reducing their debt. I dare say there is plenty of thinking outside the box going on at present in their offices.

I was disappointed by your cheap reference to the 2025 date when ever since that disputed post, since 2015, in fact, I have been consistently stating that I believe that by 2035 the existing broadcast channels will have been superseded by IPTV. I said that over 5 years ago now, and I am still saying that today. I believe that our conventional method of transmitter broadcasts will make way for 5G+ and that the abolition of the licence fee for a subscription-based model will ensure that the BBC moves to IPTV not long after the next 10-year review of the licence fee. The commercial channels will all go the same way as viewer loyalty gradually transfers to the streamers and become too expensive to operate with diminishing advertising revenue. I am well aware that others have different views, but that is mine.

Feel free to disagree - this is a discussion group, after all!

[Mad Max]

Originally Posted by Hugh

You really must enjoy trawling the web for those images, Hugh.

Originally Posted by OLD BOY

There will come a point at which Netflix will be able to scale down on the number of new commissions it makes because they will have such a quantity of good stuff in their library, it would take years for anyone to watch all the programmes that appealed to them. This would reduce the current levels of expenditure needed, and all the time, as Netflix extends worldwide, it will be picking up new subscriptions.

This will never happen. It can never happen. It is Netflix’s core strategy to be a commissioner of original content. This is the case because it realised long ago that simply being a video library would never appeal to enough people to keep them subscribing. They can no more stop commissioning original content than the BBC can - and significantly reducing commissioning would be tantamount to the same thing.

There are two other things I would do about the content. First, I would make some of the older stuff available to other providers to generate a further income stream.

If reduced original commissions risks losing them long term subscribers, then farming out their older material to other distributors risks their ability to attract new ones. Nobody gets Netflix to watch the entire back catalogue - there’s too broad a range of material to be of interest to any one person (which is entirely how it’s meant to be). But if you let people watch your older material without subscribing to Netflix, why would they then subscribe to Netflix?

Unlike the BBC and ITV, which are designed around mostly one-time broadcast of original content, Netflix’s lack of a linear schedule means the only way it can flesh out its offering is by always having its entire catalogue available at all times.

Secondly, I would enable all customers to be able to see a huge range of additional content belonging to third parties on a PPV basis. Accordingly, Netflix could be a one-stop shop for any programme that subscribers wanted to watch. There could be additional subscription tiers enabling viewers to watch a limited number of those PPV shows in a month as an alternative for paying extra for each view.

Apple TV and Amazon Prime Video already do exactly this. Other similar platforms specialise in only offering PPV content. It’s a crowded market and entering it would muddy Netflix’s brand positioning. At present it is very clear what you get with Netflix. I doubt they could make enough extra money to justify the upheaval.

I think Netflix has a big advantage over most other forms of viewing, not only because of the amount of original content, but also because it is free of advertising. However, I do think that Netflix should think about making lower packages available with perhaps more limited choices but with advertising included. Under no circumstances should they introduce advertising slots to their top subscription packages, and the CEO is on record as having agreed with that principle. However, if they wanted to introduce sponsors for their titles, I would not object to that - it would be a nice little earner without disrupting the viewer’s evening.

I think it quite likely that the existing tiers will increase in cost to a certain point, and then a cheaper, ad-supported tier will come in at the base.

Another source of useful income could be established by setting up a music option. They could have a ‘live’ channel with continuous music videos, they could have videos of concerts and of the artists themselves.

Which would be a linear channel. Hallelujah, the sinner repents

They could introduce an app, very much like Amazon Music or YouTube Music, that you could play on any suitable device and in your car. I think there is plenty of room to expand beyond what we know and love Netflix for at the moment. Perhaps Netflix could have their own set top boxes as well.

As above, a crowded market already well served by Apple and Amazon and, most notably in this sector, Spotify. Breaking in to that would require a lot of effort and investment Netflix can ill-afford right now.

I was disappointed by your cheap reference to the 2025 date when ever since that disputed post, since 2015, in fact, I have been consistently stating that I believe that by 2035 the existing broadcast channels will have been superseded by IPTV. I said that over 5 years ago now, and I am still saying that today.

You are literally the only person regularly contributing to this thread that thinks this is what you originally said. That’s why Harry repeated it, it’s why I repeat it from time to time, and it’s why it’s never going away.

I believe that our conventional method of transmitter broadcasts will make way for 5G+ and that the abolition of the licence fee for a subscription-based model will ensure that the BBC moves to IPTV not long after the next 10-year review of the licence fee. The commercial channels will all go the same way as viewer loyalty gradually transfers to the streamers and become too expensive to operate with diminishing advertising revenue. I am well aware that others have different views, but that is mine.

Feel free to disagree - this is a discussion group, after all!

If forced to operate on commercial terms the BBC would simply sell off its uneconomic divisions and then support itself with advertising. There’s no reason for it to go behind a paywall. ITV doesn’t; nor does Channel 4 or Five. It is doubtful that a law could be successfully drafted and passed that could compel the BBC to do so either. As a private company it would be free to choose how to cover the costs of its services.

Originally Posted by Mad Max

You really must enjoy trawling the web for those images, Hugh.

[jfman]

Originally Posted by OLD BOY

I was pleased to hear that things have gone well for you since you last contributed to these forums, Harry.

I agree that you can see Netflix as simply replacing the DVDs, but I have always thought that streaming was so much better as it avoided having to find storage space for the physical content, and trying to find that DVD you were looking for was always a pain!

If you were a regular purchaser of DVDs, or you if you preferred to rent them out, Netflix is so much cheaper. I think I must be watching more TV series via Netflix now than from my recordings (I watch very little live, as you may recall).

As for Netflix’s viability and what I would do, I agree with their idea of building up the original content first - that is important, because content is king. It is why Netflix is the most popular of all the streaming services.

There will come a point at which Netflix will be able to scale down on the number of new commissions it makes because they will have such a quantity of good stuff in their library, it would take years for anyone to watch all the programmes that appealed to them. This would reduce the current levels of expenditure needed, and all the time, as Netflix extends worldwide, it will be picking up new subscriptions.

There are two other things I would do about the content. First, I would make some of the older stuff available to other providers to generate a further income stream. Secondly, I would enable all customers to be able to see a huge range of additional content belonging to third parties on a PPV basis. Accordingly, Netflix could be a one-stop shop for any programme that subscribers wanted to watch. There could be additional subscription tiers enabling viewers to watch a limited number of those PPV shows in a month as an alternative for paying extra for each view.

I think Netflix has a big advantage over most other forms of viewing, not only because of the amount of original content, but also because it is free of advertising. However, I do think that Netflix should think about making lower packages available with perhaps more limited choices but with advertising included. Under no circumstances should they introduce advertising slots to their top subscription packages, and the CEO is on record as having agreed with that principle. However, if they wanted to introduce sponsors for their titles, I would not object to that - it would be a nice little earner without disrupting the viewer’s evening.

Another source of useful income could be established by setting up a music option. They could have a ‘live’ channel with continuous music videos, they could have videos of concerts and of the artists themselves. They could introduce an app, very much like Amazon Music or YouTube Music, that you could play on any suitable device and in your car. I think there is plenty of room to expand beyond what we know and love Netflix for at the moment. Perhaps Netflix could have their own set top boxes as well.

In short, there are lots of options open to Netflix to increase revenue and to start reducing their debt. I dare say there is plenty of thinking outside the box going on at present in their offices.

I was disappointed by your cheap reference to the 2025 date when ever since that disputed post, since 2015, in fact, I have been consistently stating that I believe that by 2035 the existing broadcast channels will have been superseded by IPTV. I said that over 5 years ago now, and I am still saying that today. I believe that our conventional method of transmitter broadcasts will make way for 5G+ and that the abolition of the licence fee for a subscription-based model will ensure that the BBC moves to IPTV not long after the next 10-year review of the licence fee. The commercial channels will all go the same way as viewer loyalty gradually transfers to the streamers and become too expensive to operate with diminishing advertising revenue. I am well aware that others have different views, but that is mine.

Feel free to disagree - this is a discussion group, after all!

Interesting read this one. Genuinely.

You’ve identified the compelling sell of Netflix. Replacing DVD rentals. Yet, applying their success there to extrapolate that into automatic success in a further market - pay-tv. Netflix adding PPV tiers is a crazy idea - the closer they get to the pricing of incumbents in the pay-tv market the less competitive their offering is.

5G operators have no interest in the UHF spectrum. It doesn’t deliver the high speeds that will define 5G above 4G or 3G. Equally - the dramatic shift to working from home that is inevitable from the Coronavirus outbreak is going to shift data demand off of the mobile networks, out of cities and onto domestic broadband connections and into towns and villages.

Entering the subscription music market was addressed by Chris, so I won’t add to that.

You’ve raised the prospect of reducing their debt. A novel idea in the venture capital markets of course. I was listening to a podcast the other day where they mentioned how Uber had billions pumped into it to cover losses on a regular basis. Where is it reducing costs or offering something that the taxi cab/private hire market doesn’t? Workers rights and tax liabilities. Less regulation. It looks like that model will fail costing investors money that will never be recouped.

It brings me to what is Netflix’s compelling offer that anyone else - a streamer or otherwise - couldn’t replicate without £20bn of debt to go with?

Some interesting figures from this site

https://www.macrotrends.net/stocks/c...etflix/revenue

Netflix revenue for the quarter ending September 30, 2020 was $6.436B, a 22.7% increase year-over-year.

Netflix gross profit for the twelve months ending September 30, 2020 was $9.242B, a 28.93% increase year-over-year.

Netflix EBITDA for the twelve months ending September 30, 2020 was $14.605B, a 31.36% increase year-over-year.

Netflix net income for the twelve months ending September 30, 2020 was $2.806B, a 98.48% increase year-over-year.

Netflix total assets for the quarter ending September 30, 2020 were $38.623B, a 24.82% increase year-over-year.

Netflix long term debt for the quarter ending September 30, 2020 was $15.548B, a 25.12% increase year-over-year.

Netflix total liabilities for the quarter ending September 30, 2020 were $28.289B, a 17.48% increase year-over-year.

[jfman]

Ah EBITDA. The venture capitalists dream metric.

[1andrew1]

Originally Posted by jfman

It brings me to what is Netflix’s compelling offer that anyone else - a streamer or otherwise - couldn’t replicate without £20bn of debt to go with?

£20bn of debt is probably a barrier to others replicating Netflix's offering. Another is its strong internationalsim. Rolling out internationally and speedily to avoid me-toos establishing themselves in key countries is a sensible move. As long as it's profitable apart from long-term debt it will be fine. That can be removed via rights issues, sale to another company or worst case scenario, Chapter 11.
It has a narrow one-size-fits-all model, a bit like Wetherspoons, so geographical breadth becomes key here. Confusing this model and adding extra cost to it with PPV and unprofitable music streaming won't add anything.

[OLD BOY]

The shift towards streamers to view original shows has increased substantially. If this trend continues, it will be a major worry for our TV channels. Mind you, the dearth of good material now being shown on those channels with the lack of filming during the pandemic emergency isn’t helping.

https://www.rapidtvnews.com/20201108...tional-tv.html