by Brendan Duane

While the final shots remain to be fired, it seems clear now that NFLX has won the streaming wars. Its (re)ascent to the top of the streaming pile may be owed less to its own successful business activities and more to the market realizing that many of its competitors were easy money enabled malinvestments, and their chances of challenging NFLX’s control of mindshare are quite low.

At the height, there were arguably over a dozen streaming services vying for a piece of NFLX’s market. Nearly every one of them badly misjudged both the winning digital content model and their ability to compete against deep-pocketed tech companies and NFLX’s incumbency. It would be difficult to overstate how fundamentally ill conceived many of these multi-billion dollar projects were, despite the fanfare surrounding them. 

My birds eye view: the market getting flooded with doomed NFLX clones is, to me, the product of an advancing digital economy where America (read: Hollywood) has lost monopoly power over media and popular culture and must meet a globalized audience where they are: the internet.

Here, NFLX is uniquely positioned to benefit. 

–For years it has been spreading its tentacles into foreign markets to pluck the best shows and movies from Brazil, South Korea, Spain, etc. to add to its library, and now has stronger relationships and infrastructure globally than any of the new tech entrants or the legacy studios. Try to think of the last time Hollywood gave a sizable marketing budget to anything foreign outside of Oscar bait. Add failure to aggressively pursue content markets abroad to the fathomless pool of unforced errors welling from an incompetent Hollywood managerial class.

–Outside of their higher caliber and more far-sighted acquisitions department, NFLX’s size and longevity have given it insight into the streaming business that Hollywood is too calcified to see, and that Apple/Amazon are too inexperienced to realize. The classic criticism of NFLX’s slate of content is that it is an overgrown swamp of mediocre fare, peppered with a few cult classics and one or two blockbuster originals. Compare this to Apple TV or Disney+’s relatively finite libraries of maybe 100 “high quality” shows and movies

But owning a small number of valuable properties is not the winning model for online content distribution. That’s because an enterprising subscriber can binge everything they are interested in within a single billing period. Possibly even a free trial. After that, why pay? In contrast, an endless digital junk drawer is arguably infinite meh. But Netflix subscribers don’t seem to mind. In fact, they’re perhaps paying less to watch the content itself, and more for the security of knowing there’s something decent to watch in there somewhere, if they could be bothered to sift through a bunch of old rubber bands and pens first.

–The streaming wars also seem to have spurred NFLX to invest more heavily in the future. Their recent WWE deal looks to be the latest in a series of experiments with live content, and also a way to muscle in on the mid-40s, balding, action figure buying crowd. Beyond that, the NFLX choose-your-own adventure style content is laying the groundwork for interactive storytelling–an emerging genre of gaming–and those products may ultimately drive users to the little talked about cloud gaming service NFLX launched at the end of 2021.

And so NFLX marches on as the rest struggle, and merge, and cannibalize each other in the hopes of surviving to possibly catch up later.