1. What 5 Other Companies Say About... Image source:
Netflix.
2. DISH Network chairman Charlie Ergen: Image source: DISH.
"Netflix is the most powerful content aggregator in the world
today. And there's nobody that's even close. "I don't think there's
anything they couldn't buy that they wanted today. "On original
content, for example, they pay a fixed price. And as their subs
grow, their cost per customer goes down. "So, when we buy
something, we pay a variable cost and we pay the same for each
customer."
3. In other words... The traditional broadcasting model that
DISH runs can never match Netflix's economies of scale. Even
Charlie Ergen will admit this. Will he change his business model
accordingly? I wouldn't be surprised.
4. Lionsgate TV chairman Kevin Beggs Image source: Lionsgate.
"So for us on the original side, it's a huge opportunity and I
think it's putting pressure on international buyers who are
responding to Netflix. "They're coming up with their own SVOD
strategies or bolstering their original programming lineups, and
many of the international buyers we are talking to in France and
Germany are looking for English-speaking series. "And they are
looking for kind of name-brand show runners or US distribution
partners and development partners that know how to deliver shows
that will work for their air." "On the originals front, it's really
a growth business. Obviously Netflix is a clear category leader but
that creates a lot of opportunity for competitors like Hulu and
Amazon to catch up.
5. A two-way street Struck by Netflix's global expansion,
international media giants now want to expand in the opposite
direction. Both Netflix and Lionsgate, as well as other studios and
broadcast portals, can try to catch that lightning in a bottle.
Will Netflix get first dibs on top-shelf content from Germany and
France? Mayhap so. Will that content also work in new markets such
as America, Australia, Japan, and Brazil? Time will tell, assuming
that Netflix decides to experiment with this content
backdraft.
6. Cablevision advisor Wilt Hildenbrand "If Netflix is running
well on the local area network, then HBO and everything else should
be running just as well. I mean, Netflix is the barometer. "Netflix
certainly has a direct connection. "The benefits of direct connect
takes the Internet out of the equation and just uses our local
network -- the pipe going to your house to deliver the service"
Image source: Cablevision.
7. Lessons learned: Any media publisher can set up direct
connections in service provider data centers. Netflix has no
monopoly on this practice. Yet, Netflix streams can often
outperform digital video from other companies, as it did to an
analyst attending Cablevision's earnings call There's more secret
sauce behind high-quality video streams than you might think. Which
means, copying the Netflix model is deceptively difficult.
8. Dreamworks Animation CEO Jeffrey Katzenberg Image source:
Wikimedia Commons. "We continue to have just an outstanding
relationship with Netflix. They have been an incredible partner for
us and we are actively pursuing the future of that relationship to
the degree it suits their needs. "We don't know what their needs
will be going forward. And so we're prepared to fill those. "To the
extent that their needs change, we need to be ready to capitalize
on that. "So if they want more content, we need to be prepared to
scale up and to produce it. "If they want less content, we need to
make sure that we have buyers through other channels out
there."
9. Bending over backwards Katzenberg stands ready to adjust to
whatever Netflix wants and needs from his company. It's clear who
wears the pants in this relationship, and it isn't Dreamworks
Animation. Now, Dreamworks is a longtime Netflix partner, and the
business connection runs deep. Can Netflix command this much
loyalty from other studios? Probably not yet, in most cases. Ask
again in a couple of years. The answer may be different then.
10. TeleTech CEO Ken Tuchman Image source: TeleTech. "I'll go
on record saying that to anybody: There is not a single client we
have that is not in a mass panic. "They are looking at what's
happening to companies, they're looking at an old traditional model
of, let's just say cable, and then they're looking at Netflix. "And
they are looking at what the service and support model is of
Netflix and how frictionless it is and what the service and support
model is of, let's just say, a traditional utility or cable. "And
they're realizing that if they don't get their service mode to be
more like Netflix, they're not going to exist."
11. The big takeaway: Netflix is more than just another
competitor in the crowded media sector. In many ways, the company
is a next- generation role model and a threat to traditional
business practices. "Evolve or die," business process optimizer
TeleTech says to panic-stricken customers. That's exactly the right
idea.
12. When cable falters, you don't want to miss out on these 3
companies that are positioned to benefit. Click here for their
names. (Hint: They're not the ones you'd think!)