Netflix Competitive Advantage

How sustainable do you think that advantage is, for Netflix?

If you’re looking at the business school of it all, there is network effects, which is that talent wants to be seen around the world. Therefore, I think there is an advantage to having lots of subscribers and the more subscribers you have, the more you can funnel back into content. The more content you have, the more you can learn about what works and what doesn’t work, so you can optimise.

I think the answer is, you have significant advantages as a first or second mover, at scale. The flip side is, it’s really hard to be sub-scale and global. I think you need to be broad and global or you can be small and very targeted. I believe that you can be an animé only service, that can service a very specific niche. But if you’re trying to be global TV, having subscribers, a big content budget, technology that sustains across all these things, these all feel important to me.

So you think you could have vertical subscription video?

I think you can and you can see, in the Nordics, for example, Viaplay has just said, we can see that the US content is going to get sucked out, back to the studios, so we’re going to be focused on sports, which is basically the Premiership and Champion’s League and local content. That’s where we’re going to place our bets. I think they’re doing about 20 shows a year that are just servicing that market. You can still see Funimation, or somebody like that, doing animé. You can see, in South East Asia, that there are a lot of regional, hyper-local opportunities.

But globally, if you’re competing with the list of people that I’m sure we’re going to go through in a second, I don’t think that you can do that and be sub-scale.