Well, we’ve all heard the news by now! Netflix is going global with its service in 130 countries, pretty much circling the globe, on the surprise and joy of fans worldwide. The only countries out of the loop are China, Crimea, North Korea and Syria, due to restrictions to US companies issued by those countries. In a greatly executed marketing move, shortly after the announcement on CES by the executive officer Reed Hastings, the stars of the original content series have congratulated the move and started the social media hashtag #NetflixEverywhere.
— Jessica Jones (@JessicaJones) January 7, 2016
Netflix proudly stood at the helm of the digital revolution, being one of the first digital operators, reinventing itself after its mail order DVD business. It is now a household name, a giant in content catalogue expansion, subscriber acquisition and tech innovation. So, at the helm, ahead and big, it’s a big responsibility and a marker for the industry. So let’s look at the symptoms, is it a race to the bottom for the long tail digital operators being driven to the ground by the market leader or a joint race ahead?
It is a good thing to be good
One of the big battles of the past years has been the one over net neutrality and the traffic prices and caps for ISPs and private services that consume a lot of content. While sometimes the neutrality favored some services like Facebook and Google in poorer countries, allowing growth and connections to the Western world, Netflix chooses the side of being neutral across all traffic. While protecting its own position of making it illegal to be throttled, it is also protecting a common good that is as important to the digital economy for growth as human rights are for democracy.
When the biggest player is fighting for the common good, it stands as a decent protector, lowering the barriers and future business growth problems for any entrant.
Content is and will be king
As Netflix own statements mid-2015, it acts as a curator in its content-buy strategy. It says it will not buy the 20th documentary for bikes, it will instead focus on buying out the first good 19. It will also focus on heavy bets on original content, so much so, that it delays its profitability day for 2 years to produce and generate its hit shows.
Today we have House of Cards, Unbreakable Kenny Schmidt, Master of None, Making a Murderer coming out of their chimney; making their bet, a bold statement that content is and will be king in this business forever, no matter how efficient and awesome the pipes are built.
Scalable is the name of the strategy
And speaking of the pipes… you can always go proprietary, but Netflix decided to go scalable. It uses AWS to all of its tech, it crowdsourced a recommendation algorithm to the masses for a million dollar award. This gives out a great signal, that the tools you need to be great are there, available and scalable, and the smarts of the system you build are the recipe for success or demise of your digital business.
So, is #NetflixEverywhere the death of the digital video operator? It may well end up to be, but right now the signals are that it clears the way in the way of the common good. The battle is for value, so show your consumer you can win them over with great value.