Why Netflix Will Become THE Global Distribution Channel for Filmed Art & Entertainment.

House of Cards Promo(Editor’s note: I wrote this piece originally in response to this article from TheStreet.com:  Amazon vs. Netflix: Jeff Bezos Could Squash Reed Hastings Like a Bug)

A) I’ve been an HBO subscriber since the 80’s, watched almost everything on it, and “House of Cards” is totally as good as anything that has ever been on HBO, better than most. (I’ve seen the first three episodes, and wait until you see Spacey’s mind blowing performance in #3). B) Netflix is not competing against Amazon, nor HBO. I’m a subscriber to Netflix and Amazon instant, and even together their cost is 1/10th of my DISH bill. And if HBO had a stand alone $10/mo app, I’d sub to it too, and my cost would still be way lower, but more importantly my value would be greater. Think about the power of that: Greater Value and Much Less Cost. Netflix is competing against cable & satellite TV. And they are going to crush them. C) It’s about distribution. Hollywood cares as much about distribution as it does cash money. Perhaps even more so. Netflix has 30 million subs and growing. How many “Instant” subs are there? 30 million people all seeing “House of Cards” promoted on the front page of Netflix. That’s powerful. How much is that worth? And it’s growing. And it’s Global. Being released Globally at the same time as its being released in the US. I think that is a first ever for any TV show or Motion Picture. That is very attractive to the best writers, actors, producers and directors. Netflix and it’s model are the future: Digitization, Globalization, and Urbanization, and their endgame is to be THE Global distribution channel of filmed digital arts and entertainment, and they will succeed. They’ve already entered escape velocity. 5 years from now they’ll have at least 100 million subs, but more likely closer to a quarter billion. And once again, it’s not the $8/mo from those subs that’s the real power. It’s the distribution and reach of the platform and brand.
You see, at the end of the day, it’s all about distribution. Yahoo Finance gives you distribution for this article about Netflix. Google Finance doesn’t. Luckily, Finance is one category Yahoo does lead in. I leaned this from Dave McClure on Twitter: Business = Value + Distribution. There’s no question about Netflix’s value proposition. So, all these years it’s main focus of energy has been in building distribution, and now it has succeeded and will continue to grow massively.

Leave a Reply

Your email address will not be published. Required fields are marked *