If I were a Netflix executive, I would try to monopolize video distribution on the internet.
As an internet-scale video distribution platform, it is a Netflix executives fiduciary responsibility to maximize the scale of the platform.
So how would I try to make Netflix the Sauron of internet video distribution?
Video Content Platforms
TV / Movies
Youtube / Facebook?
Short Form Video
Netflix was able to achieve internet-scale through an effective monopoly on long-form video.
They were able to maintain market share through self-produced movies and TV.
We all know this.
We all know it’s not working as well as it used to.
The good news is we have a pretty clear picture of the competition. Anyone serving video that is not Netflix must be eviscerated.
Step One: Eviscerate YouTube
Looking at this list, I am making the following statement:
TV / Movie Competitors:
You can’t win a fight against Amazon or Disney.
You can be competitive. In fact remaining competitive is table stakes, but you cannot outright win a head to head contest.
Too many competitors, too harshly defended moats (back-catalog IP).
Live Streaming Competitors
There’s a massive technological cost to square up against Twitch and compete for Live Streaming.
Twitch is an attractive acquisition target, but you still have massive technological cost to integrate.
It’s not just the live streaming part, it’s the chat, the creator tools, etc.
Even though Twitch isn’t really that good at these things, but they’re a better platform than Meta’s/YouTubes offbrand streaming platforms.
Twitch is the only scaled platform on the list where live streaming is core to the business model.
Unless you can buy them, don’t bother trying to bootstrap yet another offbrand streaming service.
This is the target. This is the TAM. Winning here is everything.
You can’t square up against TikTok. They’re the Final Boss and yuh just not ready yet, kid.
And you’re already canceled and demonitized for being the in the same article as Mindgeek.
But YouTube? Hoo boy theres some soft meat there.
Trading Quality for Market Share
We live in a golden age of TV and movies, in terms of content quality.
By content quality, I mean relative to the utter trash that is live-streamed at any given second.
Netflix produces the cream of the content crop. It does it well.
It does it to the exclusion of 99% of video content.
The premise here is simple: Serve more content to retain and grow monthly subscribers.
The first thing I’d consider: Buy Nebula
Nebula – Indie Streaming
Nebula is smart, thoughtful videos, podcasts, and classes from your favorite creators.
Nebula is a video essay platform in bootstrap stage.*
These video essays are good. Damn good. Nebula has the best cohort of creators specializing in video essays.
If a Netflix original is in the 90th percentile for content quality, Nebula produces a solid 80th percentile.
It exists because a collection of video essayists have banded together to make their own damn video distribution platform.
They did this literally because YouTube treats them like garbage.
These creators produce high quality videos
They’ve bootstrapped a loyal audience
They specialize in small, defensible content markets
Acquiring Nebula gives their team hosting services, a huge potential audience, and a stable paycheck.
Acquiring Nebula and pushing video essay content makes Netflix competitive against YouTube overnight.
Why acquire Nebula? Instant access to distribute high quality YouTube content.
Why target YouTube content? No IP restrictions, dead cheap budgets, single competitor.
Look, acquiring Nebula is just an interesting opportunity I would explore.
The real focus of this strategy is to identify high quality YouTube content and poach them hard.
Daily Delivered Content
It takes too damn long to make a Netflix series, which means you’re always going to have subscribers running out of content.
YouTube doesn’t have this problem. People upload garbage everyday AND OTHERS ARE WATCHING IT.
I don’t think Netflix should push garbage.
But an evergreen stream of content in the 80th percentile?
No IP restrictions
Every single piece of content YouTubers create can be strongly defended as fair copyright use.
YouTube’s copyright monetization algorithm has already trained them to do this.
YouTube profits by automatically siding with copyright holders in every single case.
This cannibalizes their creators, but they are incented to do so.
Especially because there’s no one punishing them on this. And oh-em-gee this would be a kidney punch of a punishment.
You win a morale victory here too by “siding with the Creators.” Free marketing for new Creators looking to “go pro” on Netflix.
Of course, you’d have to work with counsel on building a legal framework for processing copyright notices.
The best part is Netflix doesn’t lose out on the profit like YouTube does.
For Netflix this is a scaled content play. You are retaining and attracting customers by providing a constant content stream.
How Netflix Wins by Poaching YouTube Content Creators:
YouTube is the only competitor here.
They cannot easily defend against “poaching” content creators.
Their monopoly on short-form video content allows for a predatory relationship with creators.
This means that creators should be receptive to platform competition.
Netflix profits by increasing the quantity of content on the platform.
Especially as a content stream.
Step Two: Scale Creator Networks
Nebula doesn’t have a comment section.
With resources, they’d probably want to add it. They probably have a Discord server, but honestly Discord’s a mess.
Netflix doesn’t have a comment section.
That is literally insane to me.
This economy literally runs on shitposting, yet Netflix doesn’t have a comment section? Bruh.
Here’s the thing, comments/chat/etc. are content generators.
Content generators are retention engines.
People keep coming back for more because there’s nothing as retaining as someone who is wrong on the internet.
Well actually there is- someone who consistently posts quality content related to the weird niche thing you’re big into.
Weird niche content only develop in an environment where lurkers turn into commentors turn into content makers. It requires a long stream of bad content that eventually crystallizes into decent- even occasionally good- content.
The foundation of success for short-form video content is its creator development pipeline- those who went from lurkers to commentors to creators.