Name: Insights: Inside Netflix's Streaming Wars Strategy
Uploaded: 2020-03-23
Duration: 7 min 49 s
Description: The streaming wars are heating up, and Netflix is looking to original content to keep subscribers loyal and attract new members.

[MUSIC PLAYING] MICHAL LEV-RAM: Netflix has been a really interesting company to watch over the years because it's made these really huge, disruptive pivots, and it's kind of done it at exactly the right time. It started out, as most of us know, as a DVD by mail company. And when the time came and they felt that people were ready to go into streaming and consume their content that way versus DVDs, they already had a built-in subscriber base. Netflix has managed to get through its former transitions really, really well. And this next one is a really big one, and it's really different because technology isn't going to win the game. At this point, it really is about content. Content is king. CINDY HOLLAND: We anticipated that the more successful we became, the less interested others would be in licensing content to us. And we also anticipated that as the marketplace heated up and others entered into the same part of the business-- Amazon, Hulu, others in the US and then others around the world-- that pricing for those very same TV shows and movies that we were licensing from others would increase. And at some point, it would be more efficient and more advantageous for us to be producing our own content. Our roots are as a technology company, but from the very beginning the company was founded on the belief that consumers love movies and TV shows, and wanted to have different ways of accessing them. From that perspective, we're not so different from any other entertainment company, and it's human beings deciding to work with other human beings and support them in the interest of making great art. We're really focused on finding the best stories that we can deliver to our members around the world. One of the ways that we can determine what's best is by having a lot of information about what people are interested in watching. MICHAL LEV-RAM: I think Netflix's technology, its ability to curate so much data and to use it has been kind of a double-edged sword. They're using data on the content side in a lot of ways. I mean, they're able to measure things that networks would only dream of being able to measure. But that doesn't necessarily translate to having the best content around. There is an example of a recent show called The OA, which was hugely popular among its audience. They chose to cancel it after two seasons even though it was supposed to play for five seasons. And one thing that the algorithms didn't measure, at least not accurately, is the heart of and sort of how hardcore the audience was behind The OA. And so there's been this huge uproar. People are really outraged that this was an algorithmic decision. CINDY HOLLAND: Certainly, the fans of The OA would have loved to see it continue. I would have loved that myself, as a personal fan. But we also are running a business. We wanted to back their vision, and we were able to do that for two seasons. Ultimately, we do take how much viewing we get into account and measure it against what a project cost us. And we realized that we weren't able to continue that story in its current form. MICHAL LEV-RAM: Netflix, obviously, it did believes and it has seen that new shows that are popular, that have loyal followings can lead to retaining subscribers and to attracting new subscribers. But then the reverse is also true. If you're turning people off because you're canceling shows that they're just so, so into, then you risk losing them. So I think they're starting to run into some of the shortcomings of the algorithms and being so dependent on data. You really are seeing Netflix kind of in between this push and pull of its roots and also where it's headed to next. It's going to be really interesting to see what they do globally because if they can really crack the code on creating content in one country that appeals to a really large number of people in completely different regions of the world, I think that that's going to be a huge competitive advantage for them. BELA BAJARIA: What's interesting about storytelling in all of these different countries is that I think that people sometimes think about, would you try to make an international show, or do you try to make a global show? That kind of becomes a show for nobody because you're trying to really manufacture something that you'll feel that travels. What really travels naturally are universal stories, a story that feels real and authentic. And what we really hope to achieve is that in some instances, it will be a mirror that can reflect back to you or your life. And another way, some shows are just a window into an entire different group or culture that you didn't even know existed, or nuances about a story like that. MICHAL LEV-RAM: One upcoming show that they have greenlit is called Monarca, and that is being produced by Salma Hayek's company. BELA BAJARIA: It's such a fun show. Salma Hayek, who is obviously an amazing talent in front and behind the camera, produced it for us. We shot the whole thing in Mexico. And it's the type of show that is beautifully produced, crafted beginning to end, that has great impact in Mexico. But it's that show that lots of people around the world really enjoyed. SALMA HAYEK: I think that it's very smart what they've done. First of all, I think each territory, including Mexico, feels respected. They're not just consuming what they give them. They feel respected because they are making things for them, especially. And then there is that sense of pride, that the product that we are doing here has the standards and the level to be respected around the world. They give you a lot of freedom. They understand that you're talking about something, that it's an experience you know. They are respectful of it. I really have loved working with them. MICHAL LEV-RAM: It's hard to see a day where Netflix doesn't have to spend really, really big on getting really good content. People have really high expectations, and they can be fickle because they don't have to be loyal to just Netflix. They can move their money elsewhere. The race to create content that people want is just going to get more intense. BELA BAJARIA: For me, when I look at even more streaming partners or other places, and it's just a more competitive environment, I think, honestly, it's great for consumers. I think choice is great for consumers. I think being competitive, having a more competitive environment is great for us. It just keeps everybody on their toes. It keeps people innovating. I think in the end of the day, this more competitive landscape is exciting for everybody. CINDY HOLLAND: From the moment the Reed Hastings founded Netflix, he believed that the majority, if not all, of television watching would someday come through the internet to our homes. And so from that very premise we have anticipated that most, if not all, of the traditional players would move into the on-demand space. I think it's a fantastic time to be a content creator, and I think it's a fantastic time to be an audience member. [MUSIC PLAYING] 

Insights: Inside Netflix's Streaming Wars Strategy

Uncategorized

Netflix is betting big on original content.

Inside Netflix's Streaming Wars Strategy

The streaming wars are heating up, and Netflix is looking to original content to keep subscribers loyal and attract new members.

Netflix has been a really interesting company to watch over the years because it's made these really huge, disruptive pivots, and it's kind of done it at exactly the right time started out of most of us know as it DVD by mail company. And when the time came and they felt that people were ready to go into streaming and consume their content that way versus DVDs, they already had a built in subscriber base. Netflix has managed to get through its former transitions really, really well on Dhe. This next one is a really big one, and it's really different because technology isn't going to win the game, you know, at this point, it really is. It's about content. Content came, be anticipated that the more successful we became, the less interested others would be in licensing content to us. And we also anticipated that as the marketplace heated up and others entered into the same part of the business, Amazon, who others in the U. S. And then others around the world that pricing for those very same TV shows and movies that we were a licensing for mothers would increase, and at some point it would be more efficient and more advantageous for us to be producing our own content. Our roots are as a technology company, but you know, from the very beginning the company was founded on the belief that consumers love movies and TV shows and wanted to have different ways of accessing them. From that perspective, we're not so different from any other entertainment company and its human beings deciding to work with other human beings and support them in the interest of making great art really focused on finding the best stories that we can deliver to our members around the world. One of the ways that we can determine what's best is by having a lot of information about what people are interested in watching. I think Netflix is, uh, technology is its ability to thio jury so much data on dhe use. It has been kind of a double edged sword. They're using data on the content side and a lot of ways I mean, they're really they're able to measure things that networks would only dream of being able to measure. But that doesn't necessarily translate to having the best content around. There's an example of ah recent show called The Away, which was hugely popular among its audience. They chose to cancel it after two seasons, even though it was to play for five seasons. And one thing that the algorithm didn't measure, at least not accurately is the heart of and sort of, how hard core the audience was behind that away. And so there's been this huge uproar. People are really outraged that, like this was an algorithmic decision. Certainly the fans of the okay would have loved to have seen it continue. I would have loved that myself is a personal fan. But, you know, we also are running a business. We wanted to back their vision, and we were able to do that for two seasons. You know, ultimately, we do take how much viewing we get into account and measure it against what a project cost us, and we realized that we weren't able to continue that story in its in its current form. Netflix. Obviously, you know, he did believes that it has seen that new shows that are popular that have loyal followings can lead to retaining subscribers and attracting new subscribers. But then, you know the reverse is also true. You're turning people off because you're canceling shows that they're, you know, just so so into, Then you risk losing them. So I think they're starting to run into some of the shortcomings of the algorithms and being so dependent on data. You really are seeing Netflix kind of, you know, between this push and pull of its roots and also work headed to next, it's going to be really interesting to see what they do globally, because if they can really crack the code on creating content in one country, that appeals thio a really large number of people in completely different regions of the world, you know that that's really I think, that that's going to be a huge competitive advantage for them. What's interesting about storytelling? It always different countries is that, you know, we think that people something to think of it. Would you try to make an international show, or do you try to make a global show that kind of becomes a chauffeur? Nobody, right, because you're trying to overly manufacture something that you'll feel that travels. What really travels naturally are universal stories. Write a story that feels really an authentic and What we really hope to achieve is that in some insensitive it will be, you know, a mirror that we can reflect back to through the view or your life and another way. There. Some shows we're just window into an entire different group or culture that you didn't even know what existed or new one is about through a story like that. One upcoming show that they have greenlit is called Man Arca and that is being produced by Selma Hikes Company. It's such a fun show, some high end who is obviously an amazing talent in front and behind the camera produced it for us. We shot the holding in Mexico and the type of show that is, you know, beautifully produced, crafted, you know, beginning to end. That has great impact of Mexico. But, you know, it's that show that lots of people around the world really enjoyed. I think that if there's Martin what they've done, first of all, I think it's territory, including Mexico feels respected. They're not just consuming what they give them. They feel respected because they are making things for them, especially under there is that sense of pride that the product that we are doing here, Travis standards on a level to be respected around the world. Did you a lot of freedom. They understand that something about something that experience, you know, they are respectful of it. I really have loved working with him. It's hard to see a day where Netflix doesn't have to spend really, really big on getting really good contact. People have really high expectations, and they can be fickle because they don't have to be loyal to just Netflix. They couldn't move their money elsewhere. The race to create content that people want is just going to get more intense for me when I look at sort of even more of the streaming partners or other places, and it's just a more competitive environment. I think honestly, great for consumers. I think choice is great for consumers. Everything being competitive, having a more competitive environment is great for us, right? It just keeps everybody on their toes that keeps people innovating. I think in the end of the day, this more competitive landscape is exciting for ever. From the moment that Reed Hastings founded Netflix, he believed that the majority, if not all, of television watching would someday comes through the Internet to our home. And so from that very premise, you know, we have anticipated that most, if not all of the traditional players would move into the on demand face. I think it's a fantastic time to be a content creator. Andi. I think it's a fantastic time to be an audience member.