Aisha

I do not think the streaming services want to get into the distribution game. Yes, they will get more access to raw user data by going directly to the users. However, I do not think there is a market for a Netflix stick. I try to keep my subscriptions to one service at a time. However, I know many people have 3-4 different streaming subscriptions. This means a consumer would have to have 3-4 different stick plugged into the back of their TV. Or that whoever makes the stick would have to offer all the other streaming services on their stick to bring people in. Would Netflix want to partner with Disney, Hulu, ESPN, CBS, Peacock, and all the others to get their services streaming through them? Would this other services even want to partner with Netflix in this manor? Doubtful on both counts. The industry is currently bifurcating as content developers end their contracts with Netflix and Hulu to start up their own streaming services.

I think it is interesting to consider how far Netflix has gone- how in fact, Netflix’s whole business model began as a physical service- a rent-able, mail-able DVD service that allows you to select a movie, watch it, send it back, and get another. Flash forward to 2020, and Netflix does not own any actual hardware, and getting Netflix onto Smart TVs often requires additional hardware. If Netflix had considered hardware for their streaming platform, would they be as successful? If they had to focus on maintaining and servicing their equipment would they have been able to spent as much money on licensing for popular shows? One of the biggest assets they have is their collection of shows- something that they have not always had to offer. It’s an interesting decision to make- to expand back out from digital software to hardware, but is it lucrative?

Aisha, I made a post very similar to this, but how movie theaters are a fragmentation to their industry due to covid-19 and the disruption of streaming sites. But I think it’s smart to consider that maybe these streaming sites might disrupt the potential of people continuing their cable carrier. Yes these cable carriers might have a lot more to offer on demand, but it’s all at what cost compared to these monthly subscriptions. My parents personally still have their cable due to sports, but it’s crazy to think that Hulu now streams sports, and live too. Throughout college and some young adults even after graduating don’t consider cable due to the cost but also because there are other options with Netflix, Hulu, Amazon Video, etc.

The question that you posed here reminded me of the Hulu case study. At the end of the day, people were not initially ready… shifting behaviors proved to be the greatest challenge, no matter how much more the shift made sense.
As I was reading your paragraph on folks that are still using cable, I had to laugh to myself because I have not touched the remotes in our house SINCE we shifted from cable to streaming. Not to add that we have multiple streaming systems so I’m not sure we’d be willing to go with just Netflix or just Disney+. Also, companies are still trying to get streaming right! In short, it’s going to happen, someone will do it because on many levels it makes sense.
The other piece that is just fascinating is how far these original companies have come already in terms of their original business models and how far they still have to go. If I had to place my bet, it would be on Netflix. I will forever be impressed with the move they made on Blockbuster. One day, I am in a long line at the local tape rental giant only to finally get to the front and be treated like trash because I neglected to rewind the the tape to having DVD’s delivered straight to my house while Blockbuster’s doors where being shuttered. Talk about the tide turning.