I think people don’t realize that the launch of Netflix global is going to set everything back a bit before things can move forward. I love watching all the haters coming out and bashing the OTT companies over content or VPN issues. Folks – you are bashing the wrong crew. It’s the content owners to bitch at – not the streamers.
The world of content rights is such a mess it’s not even funny. Just look at all the audio guys – even Pandora can’t make money. The only guys making money in streaming audio are the owners of the rights and the infrastructure guys. Not the artists or the streaming companies. Spotify is huge but I am sure they don’t make money.
Apple wanted to upend the market and offer some sort of global subscription with content from all over at a fair price. Great. Bring it. But the content guys don’t want that cause they sold the rights a zillion different ways and until all the rights are reset and the system capitulates nothing will happen. Apple will probably keep trying but I bet it takes years.
What I don’t get is why Apple is trying to do this stuff when there is a ton of things they are not doing to make it easier to build a better OTT system on their platform. Apple is trying to be everything these days while at the same time they are not building or shipping the best tools for those who focus on OTT to build the best product. At this point Google has pulled ahead in this platform game in my opinion.
– Cheapest device to get content on the big screen – Chromecast
– Allows the app developer to implement multiple payment options – not just Google Pay
– Is shipping a basically free DRM platform that works well across chrome, android and chromecast. Plus it includes download as a core feature
– Apple TV is pricey and still buggy as hell
– Apple only allows Apple payments and only credit cards. Emerging markets totally missed
– Shipping a DRM system that works well enough across Apple ecosystem but reserves the use of download only for Apple. Pathetic!
I have faults with both these guys in general:
Tons of pirate apps in the stores
Still taking 30% for content subscriptions when they know the margins don’t support it
Unfairly using DRM to control the ecosystems
OTT biz is hard but these guys could do a lot more to help create the best platform versus trying to be the end user product.
I said as much in my list below – get ready for the VPN to stop working when it comes to gaming Netflix content libraries.
First, let me start off with a shameless plug for a podcast I was a guest of:
Now that we got that out of the way we can continue on. Also – my shameless plus is so we make this AA’s #1 podcast to ensure I get invited back.
Let me disclose that I work at hooq.tv and used to work at spuul.com . I do have some sense of this world I am talking about. I don’t have a crystal ball and I also think that in the emerging markets it will take years to declare a winner. Years I say!
That being said I think it is important to note some things for the pedestrians:
– In many markets, say Taxis or car booking services, I can agree with the winner take all or winner take most, especially in the USA or China. FYI Om covered this topic well here :: http://www.newyorker.com/tech/elements/in-silicon-valley-now-its-almost-always-winner-takes-all. However in large regional area or emerging markets I am not sure if it is true and it also has to be that pricing almost equalizes. In the case of this specific subject if we are talking about Netflix dominating in India I struggle to see how a company that charges 3x its emerging markets brethren can own the market. Maybe it will own the high end but how would it own the market that does not pay that much for entertainment?
– Let no one kid you. None of these players are currently fighting over a paid customer base – we are all fighting to convert a pirate over to a paying subscriber. That will take years and there are plenty of pirates to share at this moment.
– Local content is a big deal and no one player owns it all nor can sell it all to one OTT player. Also many of the local content players are building or have built their own OTT services.
– There can never be just one service for all. Take me for example. I share my mom’s Netflix account but I buy my own HBO account. I value HBO way more than Netflix and nothing they did last week changed that equation for me.
– Payment models in the emerging markets are hard. For Netflix it very well could be that the only customer they care about has a credit card. That still lives 100’s of millions of customers for companies like HOOQ who think there are others way to take money from users.
– Not only are payment models hard but so are subscription types. Is a monthly recurring subscription going to work in the emerging markets? For some folks it might. For others maybe weekly subscriptions is better? Maybe a subscription tied to a data balance makes more sense. No one knows yet.
– Content rights are super hard. I love seeing all the people baffled as to why they log into Netflix Singapore and it doesn’t look like the USA catalog. Netflix didn’t buy all the rights for Singapore because they know it is a small market. It may not be worth it and chances are some of it is not available. Also, Netflix being a capitalist, sold some of their shows to services in Singapore already so they can’t just take it back. Over time as they grow they will fix this but again Netflix could never own everything you want to see.
– The all powerful VPN. Currently lots of folks are signing up for Netflix Singapore and then using a VPN or anonymous IP to get the USA catalog. All good but keep in mind they way content rights work. They are bought and sold for a region – they are not tied to what credit card you use. Lots of folks talk about Apple TV or iTunes as the model where I can use my use a credit card to buy a show. And I can watch it in Singapore but note I am paying US prices so the content guys don’t care. Apple is not a subscription service and notice it they planned on doing this with TV and backed down. Netflix is getting away with murder right now. Pay Singapore prices but watch a USA catalog. At some point the content owners may ask Netflix to enforce geo specific rule or to simply not support VPN usage. Most content owners ask companies like HOOQ to try to block VPN’s or similar tools. As global content streaming takes off, I expect this to be an ongoing discussion.
– To summarize I would like to say this is going to take time to all play out. As I like to remind my team regularly – it’s a marathon – not a sprint.
I’ll add to this is if I think I missed something.
I haven’t seen much mainstream coverage of this move. We all know Google battled hard to do a non Oracle Java but seems that didn’t work out. Legally I always thought Google was wrong but of course I am not a fan of Oracle and the way they steward Java.
If you thought overall Android performance sucks now, I think it does, it sure won’t get any better with issues like this : Google has of course its own Android UI framework. Swing will now sit on every Android phone, using up resources.
I don’t know if this is the final word on the subject or if Google has other ideas but I sure do appreciate Apple’s native stack designed from the ground up for mobile.
I won’t argue the point that Android is huge but this isn’t a good sign of where it is heading.
If anyone has some good opposing links or counters please chime in using the comments.