I feel like people are ignoring that Netflix was bleeding money during their “golden age”. They only switched to being profitable a couple years back. A lot of times what people describe as enshittification is just unprofitable companies having to come up with an actual business model as venture capital dries up.
You can also argue that silicon valley has that particular business model of purposely making a product look great and cheap until enough people sign up.
It’s distinct from how most companies run in the red at their inception in that those traditional businesses would gladly be in the black but are waiting for economies of scale or building a reputation among consumers.
And that’s probably why people get so disappointed w/ tech companies.
It’s not that the prices they switch to are unreasonable, but that they hike prices after getting a user base, so it feels like a bait and switch instead of an early bird discount. If they made it an actual early bird discount, people would probably be fine with it.
Or maybe they keep prices the same, but drop content while keeping prices the same. If they instead structured it as a base tier and an “early bird” free access to a higher tier, which then starts costing money after some time period, I also think people would be okay with it. I have always thought Netflix should have packages, so you could opt-in to additional stuff like maybe Disney or HBO content. If Netflix did this early on, maybe Disney and HBO wouldn’t have bothered making their own streaming platforms and instead just raked in revenue from these higher tier customers, because they get most of the benefit of having their own streaming platform, with none of the costs.
In pretty much every case, I’ll point to Valve’s business model as an example. Gaming companies generally don’t feel the need to run their own platforms, and the ones that do often still distribute through other stores.
Valve was the first, their business model was basically removing retail (the actual reason for Steam was to make updates trivial, so a Counterstrike update didn’t break half the servers for 2 weeks), for everyone after Steam the business model was removing Steam by replacing it with a Steam clone.
Netflix has a market cap of 300bn. Public markets picked up right where venture capital left off no bother. The problem I think was the competitive forces as much as enshitified business model, though perhaps one cannot exist without the other. Certainly without doing their own content they could easily have become ludicrously profitable as a redistributer only, though I’m not convinced it would have stopped everyone and their dog moving in on the space.
Facebook is really the cleaner example of enshitification. They could have happily printed modest money for ever as the preeminent social network, but they took the greedy approach and morphed into a cesspool.
If you take venture capital, you sacrifice your ability to not be greedy. Could Facebook have even existed without VC? Facebook didn’t have ads during its startup IIRC, which meant they had no revenue.
That’s a really interesting hypothetical. They always had ads but obviously the early scale and scope was smaller, so revenue was piddling early on. They had pretty limited costs though and were a super hot ticket to give capital to. I mean they needed some kind of financing for their trajectory, which maybe anyway would have pushed them to monetize aggressively any which way.
Ultimately I don’t think we’ll ever know and the examples of people choosing not to get filthy rich off the back of these innovations are extremely rare. Even when e.g. openAI gets set up explicitly as non profit it gets bastardised, so what chance does a regular joint stock company have of operating in the interests of consumers.
Theu saw the writing on the walls. They knew the big dogs would want a slice of the streaming game and they needed to pivot before the rug got pulled out from ubder them. Hulu was already being constructed when they were recalling shifting into making their own products IIRC. It wasn’t just VC that got them to their golden era, they also relied on the industry bot taking streaming seriously enough and giving them deals that they never would today.
Hulu was already being constructed when they were recalling shifting into making their own products
Hulu has been around for a very long time (it’s also part of why their UI sucks ass while being owned by Disney. It’s the same UI they’ve had for years) they just didn’t fully invest in the marketing and content until Netflix proved to C-Suites how viable a streaming service actually was
It was launched on October 29, 2007, initially as a joint venture between News Corporation (later 21st Century Fox) and NBC Universal (later bought by Comcast), Providence Equity, and later The Walt Disney Company, serving as an aggregation of recent episodes of television series from their respective television broadcasting. In 2010, Hulu launched a subscription service, initially branded as “Hulu Plus”, which featured full seasons of programs from the companies and other partners, and un-delayed access to new episodes. In 2017, the company launched Hulu with Live TV—an over-the-top streaming television service offering access to broadcast television channels.
Netflix also launched their Internet streaming service in 2007 and in 2011 is when they separated the subscriptions so that the DVD service and the streaming service were different subscriptions, as well as when their first batch of originals/exclusives were released (House of Cards, season 5 of Arrested Development and they were the exclusive North American distributor for the Norwegian TV series Lilyhammer) and it really wasn’t for a few more years before all of the content licensing deals started expiring and being non-renewed, somewhere around 2018ish by my memory.
This (though you need to fix your typos). Movie companies saw Netflix as a garbage rerun channel. They were chasing after opening weekends. It took a long time for them to finally launch their own service.
I feel like people are ignoring that Netflix was bleeding money during their “golden age”. They only switched to being profitable a couple years back. A lot of times what people describe as enshittification is just unprofitable companies having to come up with an actual business model as venture capital dries up.
Also, merry Christmas:)
You can also argue that silicon valley has that particular business model of purposely making a product look great and cheap until enough people sign up.
It’s distinct from how most companies run in the red at their inception in that those traditional businesses would gladly be in the black but are waiting for economies of scale or building a reputation among consumers.
And that’s probably why people get so disappointed w/ tech companies.
It’s not that the prices they switch to are unreasonable, but that they hike prices after getting a user base, so it feels like a bait and switch instead of an early bird discount. If they made it an actual early bird discount, people would probably be fine with it.
Or maybe they keep prices the same, but drop content while keeping prices the same. If they instead structured it as a base tier and an “early bird” free access to a higher tier, which then starts costing money after some time period, I also think people would be okay with it. I have always thought Netflix should have packages, so you could opt-in to additional stuff like maybe Disney or HBO content. If Netflix did this early on, maybe Disney and HBO wouldn’t have bothered making their own streaming platforms and instead just raked in revenue from these higher tier customers, because they get most of the benefit of having their own streaming platform, with none of the costs.
In pretty much every case, I’ll point to Valve’s business model as an example. Gaming companies generally don’t feel the need to run their own platforms, and the ones that do often still distribute through other stores.
Valve was the first, their business model was basically removing retail (the actual reason for Steam was to make updates trivial, so a Counterstrike update didn’t break half the servers for 2 weeks), for everyone after Steam the business model was removing Steam by replacing it with a Steam clone.
That package thing they do on prime video
Yeah, but Prime sucks in other ways. I wish I could combine what I like about Prime and Netflix into one service.
Netflix has a market cap of 300bn. Public markets picked up right where venture capital left off no bother. The problem I think was the competitive forces as much as enshitified business model, though perhaps one cannot exist without the other. Certainly without doing their own content they could easily have become ludicrously profitable as a redistributer only, though I’m not convinced it would have stopped everyone and their dog moving in on the space.
Facebook is really the cleaner example of enshitification. They could have happily printed modest money for ever as the preeminent social network, but they took the greedy approach and morphed into a cesspool.
Merry Christmas to you!
If you take venture capital, you sacrifice your ability to not be greedy. Could Facebook have even existed without VC? Facebook didn’t have ads during its startup IIRC, which meant they had no revenue.
That’s a really interesting hypothetical. They always had ads but obviously the early scale and scope was smaller, so revenue was piddling early on. They had pretty limited costs though and were a super hot ticket to give capital to. I mean they needed some kind of financing for their trajectory, which maybe anyway would have pushed them to monetize aggressively any which way.
Ultimately I don’t think we’ll ever know and the examples of people choosing not to get filthy rich off the back of these innovations are extremely rare. Even when e.g. openAI gets set up explicitly as non profit it gets bastardised, so what chance does a regular joint stock company have of operating in the interests of consumers.
Theu saw the writing on the walls. They knew the big dogs would want a slice of the streaming game and they needed to pivot before the rug got pulled out from ubder them. Hulu was already being constructed when they were recalling shifting into making their own products IIRC. It wasn’t just VC that got them to their golden era, they also relied on the industry bot taking streaming seriously enough and giving them deals that they never would today.
Hulu has been around for a very long time (it’s also part of why their UI sucks ass while being owned by Disney. It’s the same UI they’ve had for years) they just didn’t fully invest in the marketing and content until Netflix proved to C-Suites how viable a streaming service actually was
Wikipedia
Netflix also launched their Internet streaming service in 2007 and in 2011 is when they separated the subscriptions so that the DVD service and the streaming service were different subscriptions, as well as when their first batch of originals/exclusives were released (House of Cards, season 5 of Arrested Development and they were the exclusive North American distributor for the Norwegian TV series Lilyhammer) and it really wasn’t for a few more years before all of the content licensing deals started expiring and being non-renewed, somewhere around 2018ish by my memory.
Since the last decade has been a blur, I’ll just summarize that HBO Max, Paramount+, Discovery+ and Peacock all didn’t launch until the 2020s, meanwhile Disney+ and Apple+ both launched in late 2019, accidentally timing themselves perfectly to grow immensely during the pandemic (and Disney+ was smart in bundling with Hulu since by that point they owned 2/3 of Hulu via their 21st Century Fox acquisition)
So while yes, Hulu probably was a hedge by legacy media companies, they didn’t really invest in it until Netflix already owned the streaming landscape
This (though you need to fix your typos). Movie companies saw Netflix as a garbage rerun channel. They were chasing after opening weekends. It took a long time for them to finally launch their own service.