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Private Notes
The way we watch is changing so rapidly that we’ve decided to revisit our very first and most popular Business War: Netflix versus Blockbuster. We’re re-airing an expanded eight-part series following Netflix’s battles against HBO and today’s new entrants into the Streaming Wars.
It all started around 1997, with a guy named Marc Randolph and his mathematician friend, Reed Hastings. Randolph and Hastings knew they’d have to take on Blockbuster. But what they didn’t anticipate was that their business model would take on network television and eventually change the entire movie industry.
This was an 8-year total war that left innumerable casualties in its wake: thousands of hollowed out buildings and economic losses in the billions.
Thinking like your enemy is the best way to beat them, and during the war, Blockbuster tried every trick in the book to get inside Netflix. Sometimes they succeeded — sending “housewives” into warehouses as spies — and sometimes things didn’t go as planned. But when Blockbuster did deliver, they delivered big. They threw everything they had at Netflix, but the war raged on.
You know the expression “content is king”? Well it turns out, sometimes it’s not. Sometimes it’s a hard-working algorithm that burrows into customer habits and viewing patterns. With that, Netflix had a clear upper hand on Blockbuster. That, and the fact that Netflix targeted this new “streaming” technology that in 2007, no one really believed in. Soon they were on top of the world. But it’s dangerous being on top. If you trip, you have a long way to fall.
We take a step back to explore how a little company called Home Box Office went from serving B-movies to 325 homes in Wilkes Barre, Pennsylvania to become the juggernaut that we know as HBO. In the process, HBO, became the standard by which all other cable companies would have to measure themselves -- after all, it’s not TV. It’s HBO.
Hollywood execs thought Netflix was crazy to give up advertising and spin off opportunities by letting viewers flop on a couch and watch a whole season of a show all at once. But Netflix knew it was onto something. All of their studies and focus groups revealed something new: viewers who binged content formed an emotional attachment to Netflix.
Netflix goes from being a streaming company to a movement in which consumers all over the world decide what to watch, and when and how they watch. The future that Reed Hastings and Marc Randolph envisioned two decades earlier has arrived. The unfettered reign of cable television has ended.
In 2019, AT&T’s acquisition of HBO’s parent company Time Warner in 2019 throws HBO’s future into even more turmoil. In a post-Game of Thrones world, can the cable network survive? Or will Netflix’s march to domination be complete?
It’s spring 2019, and the Mouse House is determined to challenge Netflix for streaming supremacy. Disney CEO Bob Iger draws gasps at an industry event when he announces the new Disney Plus streaming service will cost just seven bucks a month. Then the company drops another bombshell — it’s buying out Comcast’s stake in Hulu, the destination for edgy, adult fare, to expand its streaming empire. Now whatever content Disney makes, it’ll have a platform to host it.
But Disney isn’t the only company eyeing Netflix’s crown. Apple, Comcast, Viacom, and WarnerMedia are all sharpening their knives. In the battle for eyeballs, anyone could emerge the victor.
On today's special interview episode, renowned media futurist Rich Greenfield returns to fill us in on the latest developments in the streaming wars and how these changes might impact viewers in the coming years. Greenfield is a media and tech analyst with BTIG who has been following the industry for decades.
