The article pokes fun at Netflix for purchasing little-known, unpopular titles, as if Hollywood is somehow putting one over on Netflix. But what drew me to Netflix initially was its ultra-deep selection of DVDs, which was far better than the local video store. Seems to me Netflix is trying the same thing with streaming, building the biggest catalog as fast as possible so people will view it as the #1 streaming choice, even if Warner Brothers withholds its marquee movies and sticks it with "Pushing Daisies."
Forgive me, but I just finished (finally) reading Clayton Christensen's "The Innovator's Dilemma," so naturally, this looks like another prime example to me.
It is amusing to watch the entertainment execs flail around. But apparently, it's not necessarily because they are incompetent. Ironically, it may be their actual competence in their current positions that prevents them from seeing the value in the long tail (or anything else made possible by new technology).
They have long made money a certain way. Now, a new method (internet streaming) is coming along. They would like to use it, but they can't. They can't because it doesn't satisfy their current customers.
Netflix is happy to pay for and take the deep catalog. They are new and therefore able take the risk in creating the new market.
I can't give the theory a good showing myself in a brief comment. But if you haven't read the book yet - go do it now. It's amazing how stuff he wrote ten years ago about older companies sounds like a history lesson to me today about Microsoft, Google, et al.
I think you're giving Netflix the short shrift here. Netflix entered the DVD rental service and beat Blockbuster — they were extraordinarily competent in that arena, arguably more so than most movie studio heads are at their jobs. Now they've moved outside that area of competence by getting into streaming and cannibalizing their own business before any competitors sprung up to do it. They specifically overcame the dilemma you're talking about.
If they can't convince their current customers that (whatever) is the way of the future, then I'd argue they are NOT competent. Any fool can be a yes-man and keep doing what the previous guy did because "it always worked before".
Did you read the article? I stopped when it started on wild speculation about future deals, but there were two execs quoted. Time Warner's CEO claims that Netflix is eating their lunch, and has not only cut off access to new releases but raised prices for library titles.
The unnamed Disney exec is glad to have an additional market for their library titles. They sound a good bit more clued in than anyone here is giving them credit for. (Though they clearly are fighting tooth and nail to keep consumers from realizing how poor the existing distribution channels are.)
I did. Like I said, shows you who is in the know, and who isn't. Some are good, some are bad. I'm not childish enough to think that they're all completely stupid/evil.
I see this as a benefit too, especially for TV shows.
If you are the type of person that enjoys "critically acclaimed" but "unpopular" shows (Arrested Development, Pushing Daises, Better Off Ted, etc.), the signal-to-noise ratio is dramatically lower than regular Cable TV.
I don't know if right here is the best place to ask, but is anyone else confused about why "Pushing Daisies" could be critically acclaimed? After watching what I could stand of the first 2 episodes, the premise is awesome, the narration is okay, the writing is abysmal, and the characters are as hollow as a PVC pipe. I mean, does it get better later or something?
It's probably not the best place to ask, but I really liked Pushing Daisies and thought the opposite of you :) The premise, eh, the narration okay, the writing really good, and the characters rich and faceted :) Guess there's no accounting for taste, eh? ;)
It's critically acclaimed because it's original. A critic (and I know this having worked as a reviewer) has likely seen every single show that came out every year. When you've seen generic sitcom A through F, you're going to love something that's original right through from premise to characters (the characters do fill out into the 2nd season, but Fuller has a problem that his main character is often a complete vacuum - like Dead Like Me the main character was simply a way too present observer; by the end I literally loved every character but the lead).
Better Off Ted suffered the same problem (different creator) with the main character being vacuous. His boss was great, his colleagues were great, his daughter was great, I even liked the narration because it was out-of-character from the main character.
I find with the major sitcoms people relate to the main character and solely the main character. I think the main reason Chuck Lorre has done so well with Two And A Half Men and The Big Bang Theory is that it's not just the main character that you can relate to, meaning you get the unbelievably avid fans from those "critically acclaimed" shows making huge noise and driving a near doubling in viewers of their shows (the big bang theory went almost 7-million viewers from the first till third season). You don't see this growth in your average series, it tends to start large and decline continuously (Hawaii Five-0 dropped 4-million viewers in the first 4 episodes).
Streaming Pushing Daisies, 30 Rock, and Arrested Development are what made me a Netflix user for life. When I hear from people whose tastes I respect that X is awesome, and X isn't at Blockbuster but is available on DVD and streaming from Netflix, I know who I'm going to be a customer of.
Chris Anderson's The Long Tail describes the very thing you enjoy about Netflix. In fact, company data given to Anderson revealed that an entire 25% of the company's sales are generated from non-blockbuster titles -- the "back catalog".
Its probably more, due to the convenience effect. Its the same reason companies cluster restaurants: people go to the cluster knowing it will have the best selection. In the same way, people go to Netflix knowing they'll have the best selection, and sometimes they end up choosing a blockbuster title.
Here's some research suggesting that the Long Tail isn't just for weirdos like us, but that pretty much everyone dips into the long tail occasionally: http://messymatters.com/longtail
In other words, businesses like Blockbuster figured that since only a small fraction of demand is in the long tail that it's not worth the large cost of supplying it. But just because there's only a small fraction of demand in the long tail doesn't mean that there's only a small fraction of customers who care about it.
That's because it's not, as previous conventional wisdom had it, that most people stick to the popular stuff and there are a fringe of eccentrics who prefer the long tail. Rather, most people most of the time like the popular stuff and, occasionally, like long-tail stuff.
Conclusion: Total demand for the long tail is low; total customers who care about it is high. So ignoring the long tail means alienating most customers.
Agreed. One of the things I've had increasingly reinforced as I've gotten older and experience life more is that, "Not all new things are good, and not all good things are new."
I don't necessarily need to go find "new" music in a world where Floyd's albums still exist. I don't necessarily need to go see some new movie that opens this weekend, if I'm in a world where I can just spin up Casablanca, or The Wizard of Oz, or the original Star Wars, etc. Much of the traditional big corporate publishing industries (movies, music, books, mainly) are all about churning out, promoting and profiting from new stuff. But people don't necessarily want new stuff. They want good stuff. And good old stuff (increasingly) lasts forever, and (increasingly) is increasing in total amount of back catalog to draw from. There's always more good old stuff than good new stuff, and the balance shifts increasingly to the old stuff each year. Companies like NetFlix and Apple and Amazon that make it easy to find and buy all that good old stuff, are going to having steadier profit streams, and arguably higher profit margins, than companies that try to do the big shovel-shit-but-promote-like-hell dance, because the latter business model is taking more risks and has higher operating/marginal costs.
