[jerrya]

Netflix's problem is that there are no switching barriers to keep viewers loyal to Netflix.

Even they admit that their vaunted queue is worth much less in the streaming world than it was in the DVD by mail world.

Their strength would be the content deals they have, and their ability to obtain future content. But that right now is notoriously bad. Most of the current or best movies of any star or franchise are not available - the older movies are, or the less well known movies. And I can't get this season of Breaking Bad or any TV show.

As far as I am concerned, they only have two things going for them, the better player, with closed captions and reasonable browsing and availability on most platforms.

And their lack of buffering, that is, their infrastructure.

Unless they can obtain content, I think these two last strengths mark them for being bought out by someone that needs infrastructure knowledge and a good player and otherwise has ways of keeping customers loyal and preventing them from switching away.

The flaw in my analysis is that it predicts Amazon purchased Netflix in the past 12 months. Since Amazon has not purchased Netflix, I know I must be missing something.

[notatoad]

>Netflix's problem is that there are no switching barriers to keep viewers loyal to Netflix.

That's also their biggest strength. Apple's got all their vendor lock in, amazon is trying to build vendor lock in with the kindle fire line, google is trying to build a vendor lock in with google play. If you buy into that ecosystem, it's a good way to keep you. But if you don't want to buy into any specific manufacturer, netflix is great. I can't watch iTunes movies on my android phone, and i can't watch google play movies on my iPad and i can't watch either on my roku, but i can watch netflix on all of them.

[twoodfin]

I don't think Amazon cares about vendor lock-in. They've already got your credit card number and are really, really good at selling stuff over the web. They want to "lock" you in with Prime, their recommendations engine, and the other cross-selling benefits they get from being by far the web's biggest retailer.

With the arrival of the iOS app this summer, I don't think I have a device I can't watch Amazon Instant on (TiVo, a couple of cheap Sony Blu-ray players, iPad, iPhone...)

[dave5104]

But how much do you think the average consumer cares about that (or is even smart enough to think about it)? Sure, we all understand the ecosystems because we're developers and we follow that sort of thing, but I'm not sure that the average consumer would see it the same way. If anything, they might be swayed by the whole "Oh, that will work with my iTunes account!" factor.

[CamperBob2]

Netflix's independence is potentially a big deal. In a rational world, the content producers would see Netflix's platform agnosticism as a big selling point. No producers want (or at least should want) their hit TV series or movie to be viewable only on iOS devices or Android devices or Windows devices.

[SoftwareMaven]

If the price is right, producers couldn't care less about platform lock. If Google, Apple, Amazon or anybody else is willing to pay the right number of dollars, they can throw the bits into /dev/null for all Hollywood cares.

[CamperBob2]

I don't know about that. Nothing like a major motion picture or TV series has ever been platform-locked, has it? Video games, yes, but not traditional "mainstream" entertainment.

[duaneb]

NFL is locked in. Should be interesting to see when they make the move to online. There is currently no way to watch NFL online in the US because networks pay a LOT of money for exclusive rights. With the amount of cash Apple has on hand, for example, we could see some huge shifts.

[duaneb]

> Netflix's problem is that there are no switching barriers to keep viewers loyal to Netflix.

Sure there is. Nobody else has Netflix's library. If I bought the shows I watch on netflix from iTunes or amazon, I would probably sink 10x the money in. I've probably spent around $300-400 on netflix over the years, and I've watched many times more content than that. Ad-free, subscription, with lots of content.

Let's look at the competitors: Amazon prime, which is cheaper but has only a few titles that set it apart (West Wing is the one that caught my eye). Of course, prime is worth it even without the video library, so perhaps it's not the best comparison.

Hulu has a much smaller library, and its paid model has ads (which renders it unacceptable for me). As a free service for watching recent TV, it's alright, but that's not really the same market as Netflix.

iTunes, Google Play, etc etc, are only worth it if you watch <$8 of content a month or want to keep up with current television.

And, of course, let's all remember the biggest competitor in the room for the generation that's most likely to consume internet content: piracy. It has the best selection, best price, best quality- it really only fails on a convenience level.

I also think that the download-the-drm-video is destined for failure. People want large collections, and anyone building that collection with video you don't own for that much money is either stupid or has a lot of money.

[twoodfin]

I assume Amazon thinks they can build a better player and a better content distribution infrastructure for less money/time than it would cost to acquire and integrate Netflix.

I think they're right. There's nothing revolutionary Netflix is doing, and if Amazon can't compete on digital content delivery, what they hell are they doing giving Kindle Fires away at almost cost?

[gamble]

Nobody can buy Netflix because the content licensing deals are broken by a change of control. I'm sure they'd have been picked up by someone years ago were that not the case.