Legendary Hollywood Director

When it comes to the fundamentals, you have to understand what Netflix's business model is like?

According to Netflix's most recent quarterly revenue, the bulk of their revenue is still mainly from DVD rentals, which means that the main source of Netflix's revenue: the monthly payment of users has not yet developed.

However, according to the trend that has emerged at this time, Netflix's business model for users, that is, paying a fixed monthly membership fee in exchange for unlimited viewing of video content on the Netflix website is increasing year by year.

However, this model has always had a disadvantage: when the existing content of streaming media sites cannot attract users, the number of users' monthly payment will drop rapidly. For example, Tudou and Youku in the mainland have made a good explanation, that is, the number of streaming media's monthly payment will drop rapidly. Market share is not static and entrenched.

Of course, Netflix is ​​still cultivating paying users, which means that the video content of Netflix's website is very attractive relative to its paid cost, and viewers are willing to spend this money to enjoy it, otherwise the proportion will not increase year by year.

If you look more carefully, it means that Netflix's increased users are snatched from other entertainment markets, and the core competitiveness they are snatching is copyright.

In the past, movies were drawn from theaters and entered the DVD market or TV stations, but the emergence of Netflix has made watching movies one more option, video websites, and more convenient mobile phone playback in the future.

From the analysis of users' consumption behavior, the user portraits faced by Netflix should be users who like to watch videos and images in exchange for mental pleasure.

From this point of view, Netflix's potential user groups should include: DVD-loving users (Netflix's original market segment users), TV series-loving users (TV users), and online video-loving users (competitors in the same field like YouTube) , movie-loving users and so on.

In other words, the media bosses at the moment are not clearly aware of Netflix's plundering of other video consumer market users, because Netflix's development is based on the premise that TV users shift viewing channels - the choice of broadcast content Whether it can form a competitive advantage over its competitors is the foundation of Netflix.

Because watching movies in theaters or on TV has a certain degree of randomness and cannot take care of all audience groups, Netflix is ​​different, where you can search for your favorite genre and watch it, which is tailor-made.

That is to say, the core of Netflix's future competition lies in whether it can provide users with a higher cost-effective image consumption (that is, the same mental pleasure, Netflix's cost is lower. Or the same consumption cost, the mental pleasure of Netflix's products is higher. high).

From the perspective of the future, Netflix has succeeded, and they have become the kings of the global streaming media field. The slogan Netflix produced, must be a boutique has been a topic of discussion among fans, which was a signboard played by HBO in the past.

In this, Netflix achieves overtaking in corners, and the means to break the existing pattern is called destructive innovation.

Putting the word destruction in this context is by no means derogatory. What was the film and television industry like in the past? The model has already been set, and the development of many projects is very complete and industrial. Even in the process of improvement, offline giants like Blockbuster have been born, so that the store bullies customers, which in turn squeezes the interests of the studio, requiring Exclusive authorization and increased channel service fee.

In the 1990s, many small studios hated Blockbuster, and it was also under such a demand that Netflix came into being.

However, it is naturally very difficult for a new industry to challenge itself head-on. Whether it is financial, material or resource allocation, what does Netflix compare to Blockbuster?

So,

Netflix has circumvented the difficulty of insufficient offline stores through an innovative online ordering and DVD distribution model, and started development from an unexpected angle.

In layman's terms, Netflix is ​​the Apple of the mobile phone market, and Blockbuster is the Nokia that flourished.

The status quo of the two actually corresponds to the future market. After all, Blockbuster is only a leasing intermediary, but Netflix is ​​not only capturing the leasing market, but the trend of world development.

Did Blockbuster take Netflix to heart in the first place? Not at all, it naively thinks that its opponents are only those difficult content providers or overseas careerists such as Sony.

But I didn't expect it to be the first to fall. At the beginning of 2010, Blockbuster once again announced the closure of 90 stores in overseas regions, reducing operating costs but still having difficulty in revenue, and it may not survive this year.

Did the boss of Blockbuster do something wrong? No, although everyone complains about its poor service, the problem is that it has enough resources, but they just lost, to the rookies in the industry.

The so-called destructive innovation is precisely because the original pattern forces do not need to do wrong, but if they fail to keep up with the rhythm, they will be eliminated.

Nokia is like this, Blockbuster is like this, they are all playing well in their own fields, but they are suddenly hit by dimensionality reduction.

As long as the audience base is large enough, those non-mainstream and low-demand film rights can also generate similar revenue as blockbusters.

On the phone, Lyman, who returned to the crew to continue filming, took the time to answer Joseph's doubts.

For example, Twilight sells very well. Even if it is authorized to Netflix on-demand, it can generate hundreds of thousands of profits a month, but the on-demand profits of more than 100 unpopular and bad movies are also hundreds of thousands of dollars a month. Netflix The great thing about this kind of streaming is that it can sell items that don’t have offline distribution at a better price, or they’re more precise than the current model and can improve the turnover rate of resources.”

Of course, from the financial report, the money they make from paying users is not enough to pay for the authorized movies, but after all, their cost group is less than 2 million, so if it is 10,000, what about 100 million? They can definitely make money. money.

In 2010, Netflix's copyright library totaled more than 3,200 movies. Every year, for these, they have to pay content providers, such as Firefly, Fox and other studios, tens of millions of licensing fees, not including the profit after on-demand. And their number of users obviously cannot meet the cost of the film library, but this is only a necessary period of pain.

Netflix's delivery model can always add up. If it is Blockbuster's store, there can only be more than 1,000 movies on the shelf, and the cost is high. It needs to oppress the studio in disguise to expand its revenue, and Netflix, Just like Meituan’s food delivery business, it burns money in the early stage to occupy the market. When the base is enough to meet the demand, the speed of rolling the snowball will only get faster and faster, and the proportion of pure content costs will continue to decrease until the completion of the entire video. The absolute hegemony of the market - of course, the latter is still difficult, and it is still very difficult for a single player to dominate the streaming media market.

No, Lehman also wants to learn from Disney, come to be independent, don't forget, he has Marvel, Disney does not...

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