Netflix full circle

Netflix buys rights to WWE Raw, other shows in live streaming push!

So the heading reads above the CBS (link to original post) News article. 10 years ago an article on Venturebeat got me thinking what it is that makes the opportunity tick. The opportunity for creatives that Netflix brought in doing things differently. It was a comment on how new entrants can push the boundary in creative freedom leading to, at least initially, more diversity in offerings.

In that article I explored also drivers to the contrary of this liberating movement. Costs need to come down and revenue needs to go up. Simple enough conclusion. The comparison to a ponzi scheme in 2014 seemed applicable. At that time I was fascinated by the ponzi likeness of venture capital. To this day in my practice as coach and new business leader I see the repercussions of this 'practice' in how business ideas are framed and 'sold' versus actually building the business. But I digress.

Costs need to go down and revenues need to go up. Those fundamental drivers are relevant in any industry. Looking into the future back in 2014 the growth dynamics and customer habits foretold that to maintain traction with subscribers and sustain growth, adding more fresh content was going to be a key driver which makes it hard to bring costs down however would put Netflix and other streaming services on track in earning more oscars. More interestingly the recent revenue side intervention is a decisive signal that streaming has matured. Proof. If customers stick with you as you raise prices by nearly 30% and you push 'leachers' into subscribing too, that means your product has both value and traction.

Now to the title of this article. 'Push live content'. It is a logical conclusion of following a growth path. At some point 'fresh' content which is sometimes even released in a drip like fashion to the user to mimic and enforce freshness. It is reminiscent of the old days of linear television. However even that might not cut it anymore. This is where the trojan horse comes in. Linear television called dibs on live television as is its linear way. However wouldn't it be a fun surprise as the heralded savior of new content would become more and more linear too? So this announcement isn't surprising but it is a next step in non-linear, linear tv. Netflix jumped out of its horse into millions of homes with live tv.

Will it succeed? Netflix has tons of detailed information on the viewing habits of it's users and can most likely learn extremely fast and precise what type of live events fit which customers. in business terms it has an unrivaled advantage in tailoring the offering to it's viewers. Netflix can be extremely precise in figuring out the profitability of live content at what price point helping live event creators reach more viewers and possibly increase revenue. Linear tv has today added a lot of OTT like capabilities, it however is still restricted to a country. A fragmented market so to say. Fragmentated markets usually incur higher cost for both producer and customer. With access to over 220 million accounts Netflix has a solid position in understanding better what customers want across many regions. Exciting times.