Netflix Flexes

My takeaway from Birdbox is the old adage: "Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes."

Sure it got tons of views because of all the advertisement and the tons of focus on viral media advertisement on every single platform. But the reaction from people watching it before me when asked if it was good was "Well I mean, I did watch it to the end, but i wouldn't call it good". Personally I didn't care for it. It was a huge and expensive stunt by Netflix to show that they could game viewer numbers for a one-shot thing. And I get that this is an important thing for them to do, but it's in no way sustainable or valuable either to them or their viewers.

If they did more stunts like bird-box throughout the year, most would quickly start to completely ignore them with an attitude of "Oh sure I head about X, and it's "blowing up on facebook" but that's always the case with Netflix focus pieces, they aren't worth watching though."

I would only speak anecdotally and from what I've observed from people I know. Thus I don't try to infer anything at all, but at least locally I've found it remarkable: in a couple of years, Netflix has become synonym of streaming in their mind, it has really become a thing. They are watching Netflix movies and series a lot, mainly because there are on Netflix, good or bad, indiscriminately, and even more surprisingly, they are discussing about them. It seems to me some people really like Netflix, the service, like some people like Amazon Prime, the service. Netflix seems to have succeeded in building a relationship with them.

My takeaway from Bird Box is that if Netflix wants to make any of their original content one of the most-watched media events of the year, they can do it, regardless of the quality of the content itself.

All it takes is for them to slip it in to people's "custom, curated" lists at a higher frequency, and maybe do a little subtle social-media engineering on Reddit/Facebook, and bam: instant box office smash of a derivative film with a 66% on Rotten Tomatoes.

That's a huge "flex". Big studios could pump hundreds of millions into a decent film and still have it flop. Netflix can take a B-movie and make it a sensation with relative ease. No wonder every game in town is trying to break into this model. Why invest millions on a potential flop when you can engineer one with 75% accuracy whenever you wish?

(though maybe I'm being just a bit too paranoid here. I have to admit some of the Bird Box magic stems from its intriguing concept. guerilla marketing doesn't work so well if what you're selling doesn't seem too interesting)

edit: people are debating the idea of "box office smash" here. I didn't use that phrase to emphasize direct earnings as a result of the film (which is "free" to watch if you pay for a subscription). The article addresses this:

> Secondly, and relatedly, Netflix is counting on subscription revenue. To that end, producing a piece of content that 58% of its subscriber base viewed in a single month is by definition a triumph (and yes, worth ~$700 million).

The idea is that Netflix was able to coerce more than half of its subscribers to watch this film. That's crazy. The result, as we see in the article, is a tidal-wave of Bird Box achieving near-meme status. How does that feel to someone who does not have a Netflix subscription? What big joke/story are they missing out on? For only $14.99 a month, they can win social acceptance by being "in the know" of the current big thing.

> until they have an average subscription cost of $35-40/month

That's impossible. 3/4 or more of their total customer base for the future is outside of the US. The economic middle 50% and the top 50% of people in Brazil, Indonesia, India, Turkey, Vietnam, Thailand, China, Nigeria, Mexico, Colombia, Russia, Bangladesh, Philippines, Ethiopia, and about 140 other countries - can't and will not pay an average of $35-$40 / month (or say ~$25-$30 if we're assuming an average lifted by higher prices in affluent nations; that requires eg the US market to pay far higher prices beyond $35-$40). Not under any circumstances will any of that happen.

Netflix will be able to raise prices in the non-rich markets (ie most of their customer base of the future) only as economic growth allows for it, both at the global and local levels. Customers in Brazil aren't going to suddenly be able to jump from $5 / month to $25 in the next ten years, no matter how much good content Netflix puts up.

Western European customers, who could largely technically afford $35-$40 per month, will never accept those prices.

Netflix is pushing near the edge of what people will pay right now globally. They can maybe raise prices in the US another 25% over several years before hitting the ceiling in their most lucrative market. The US market represents a rough approximation of their maximum pricing power. There's no scenario where they retain their customer base in the US and charge $35-$40 (unless we're talking about 50 more years of inflation).

Yeah, they all want $10-$15 a month, but I doubt many will get it.

We'll see.