Television is television, no matter what pipe brings it to the screen.
Ted Sarandos, Netflix’s chief content officer, as quoted in the New York Times last week. The company, which earned 14 Emmy nominations for its original content (including “Arrested Development,” “House of Cards,” “Orange is the New Black,” and “Hemlock Grove”), seems to have a firm grasp on what television will be like in the future.
Reed Hastings, Netflix CEO, released a letter to the investors for Q2, and revealed:
Beyond series, we will be expanding our Originals initiative to include broadly appealing feature documentaries and stand-up comedy specials. Netflix has become a big destination for fans of these much loved and often under-distributed genres.
The reason that incumbents can’t react is that their revenue and defensibility are continued by serving the high-end of the market for which it would take too much time & money for any competitors to effectively challenge. In Netflix’s case this is their DVD distribution business. It’s hard to imagine somebody else being able to effectively compete with that.
But the real threat comes from the change in technologies that rule the old business obsolete. Streaming. It’s clear that in the future movies & TV will be delivered to our homes from the cloud. Indeed for many this is already the case.
To win the future he needs to attack his core assets by building new ones. Very few companies ever do this.