For a while now, several networks have been making waves for their plans to create their own Netflix. Disney has been the latest and more significant addition to the list.
It certainly can look like the beginning of an arms race. Which would by definition be stupid. Millions about to be buried in re-inventing the wheel a couple dozen times, only to see the market fall down to only a handful of viable streaming services, all in a few years timeframe.
I’ve read different takes on this. Why it can be bad for users, why it can be not as bad for Netflix as people may think now (I agree). But, what about the other companies trying to become streaming giants now? I think they may have a point.
With this multi-million-dollar stakes, you can never rule out a dumb move by ill-informed executives or some big shot trying to impress somebody. It happens. A lot.
But I refuse to look at it this way. Not this time. There have been a lot of talented people thinking about this. It could really be the best move for any company that can afford it. Even knowing that chances to be viable long-term are very limited.
Although I could be wrong, here are two ways it could end up, and both would be worth the hassle:
- Only 1-3 big players survive – all in industry bury millions for the chance of being one of those few surviving marketplaces.
Why would it make sense? Because whoever owns the marketplace (that’s the keyword) controls fees and gets a bite of every transaction. Ask Apple if it’s worth it. And, of course, the chance to actually see new marketplaces arise decreases with a market’s maturity. So the time would be now.
- We end up with 100 streaming services but all are pay per view apps in your smart tv, no fixed fees. My money is on option 1 and it makes strategical sense at least for Disney, maybe not so much the other networks. But simplification of micro payments may well establish a scenario like this number 2 in which the user would ultimately win, as anyone would get unlimited access to all catalogs with no upfront payment.
As this article in TechCrunch noted, simplicity of offering will help curb piracy so I really think either one of these two options will be the eventual outcome. Because the alternative would be a rise in piracy and/or pure user churn out. So, in the end, the two scenarios I’m describing are the two most likely because it makes financial sense for all the players involved. The question is just when and how.
Let’s talk about this again in 5 years, shall we.