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Netflix is not a tech company (2019)

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Re: Netflix is not a tech company (2019)

#131

Post by ronald_raygun »

cblconfederate wrote: post #124
crazygringo wrote: post #42

This is utterly ridiculous. I think it's generally understood that, in the 21st century, a "tech company" is a company that uses tech as the principal competitive advantage to replace traditional "non-21st-century-tech" incumbents. Obviously, Netflix used streaming, collaborative filtering recommendations, and a massive CDN to replace cable TV subscriptions. If that's not a perfect example of a tech company, I don't…

> streaming, collaborative filtering recommendations, and a massive CDN Did they develop any of these technologies?

Did Apple invent much of its early tech, or did it just lift it from Xerox Park?

Re: Netflix is not a tech company (2019)

#132

Post by ErikVandeWater »

eldavido wrote: post #76

I used to read a lot of writing like this and still do (tech strategy newsletters--Stratechery, Benedict Evans, etc) The hazard of reading stuff like this is that it makes the world seem much more orderly and predictable than it is. Case in point: Zoom. "Videoconferencing is a commodity". "Distribution is all that matters". And all of a sudden, someone does this "commodity" a lot better, without the pre-existing netw…

I would say strategy evaluation is more valuable on the investing side than real-world.

Investing in companies with strategic advantages is much more profitable that trying to find the one commodity company out of thousands that are able to escape from the fires of intense competition.

Strategy is also how you avoid having to delight your customers to be profitable. Just get a new law passed that is inconvenient for your competitors to follow.

Delighting customers is also hard because people are unreasonable and unpredictable. Try selling an app. Even if your app adds lots of value over your competitor, people aren't used to spending money on apps. I would guess the vast majority of apps that make money play into people's addictions and get 1% of their users to buy pay-to-win items or custom skins for their players/items. Only the unreasonable people actually make these companies any money.

Re: Netflix is not a tech company (2019)

#135

Post by pySSK »

eruleman wrote: post #46

In 1997, Hastings and Randolph mailed a DVD to see if it would be delivered without damage. Netflix was created because a new market (home delivery of movies) was created by an emerging technology. 10 years later, Netflix kick started the streaming revolution. In 2008, Netflix licensed the Starz catalogue of 2,500 titles. In a podcast episode , Ben Thompson said Netflix was his favorite company to write about because…

The always had streaming in mind though but the infrastructure for it did not exist for mass adoption. They used DVD and USPS to gain footprint get off the ground. This enabled Netflix to wait it until the market was ready for their big tech-play. c.f. SV failures like WebTV and General Magic who were ahead of their time but the market/infrastructure didn't exist.

Re: Netflix is not a tech company (2019)

#136

Post by samhw »

dralley wrote: post #56
Areading314 wrote: post #3

We should stop thinking in terms of "tech companies" and think of them in terms of "companies that use tech with a high degree of success". Ultimately any company that makes money is not a tech company because pure technology on its own does not make a business. Also, with the right incentives and management it is possible, although hard, for legacy companies to start using tech better to compete.

I agree. What most HN commenters seem to really mean when they say "technology" is "consumer software", or more cynically, "company is made of mostly software engineers". There is an incredible amount of advanced technology being created and used by more "traditional" industries like manufacturing, aerospace, or animation. Why should Facebook be considered a technology company but not Pixar, Ratheon, General Dynamics…

> company is made of mostly software engineers

This hits the nail on the head. If you dig down into it, this almost always aligns with the companies people describe as 'tech companies'.

Re: Netflix is not a tech company (2019)

#138

Post by wrs »

crazygringo wrote: post #42

This is utterly ridiculous. I think it's generally understood that, in the 21st century, a "tech company" is a company that uses tech as the principal competitive advantage to replace traditional "non-21st-century-tech" incumbents. Obviously, Netflix used streaming, collaborative filtering recommendations, and a massive CDN to replace cable TV subscriptions. If that's not a perfect example of a tech company, I don't…

So you and the author have exactly opposite perceptions of what is “table stakes” (tech or content) and where the strategic advantage in the streaming business lies…

Perhaps one missing piece is that there is a first-mover advantage to being the tech disruptor, but in many cases the tech quickly becomes “table stakes” and the strategy goes back to where it was.

Re: Netflix is not a tech company (2019)

#139

Post by cblconfederate »

ronald_raygun wrote: post #131
cblconfederate wrote: post #124

Earlier quoted context omitted.

> streaming, collaborative filtering recommendations, and a massive CDN Did they develop any of these technologies?

Did Apple invent much of its early tech, or did it just lift it from Xerox Park?

apple may not be a pure tech company, they re a gadget company, but they have developed a lot of technologies that they can patent, a lot of UX things, and it seems they have evolved many of the preexisting ones. I don't really know what netflix does, do they develop things like video codecs, load balancing tech or recommendation algorithms?

Re: Netflix is not a tech company (2019)

#140

Post by jbay808 »

crazygringo wrote: post #42

This is utterly ridiculous. I think it's generally understood that, in the 21st century, a "tech company" is a company that uses tech as the principal competitive advantage to replace traditional "non-21st-century-tech" incumbents. Obviously, Netflix used streaming, collaborative filtering recommendations, and a massive CDN to replace cable TV subscriptions. If that's not a perfect example of a tech company, I don't…

The trouble with this definition is that as it defines tech as an advantage, it intrinsically depends on what your competitors are doing.

Is Netflix still a tech company when Disney (incumbent) now offers similar tech? Does Netflix still have tech as its principal competitive advantage, or are subscribers now choosing who they subscribe to based on content?

If the latter, then Netflix is now a media company, and whatever tech superiority they still have is about as relevant as Betamax's tech superiority over VHS.

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