I don't get how Netflix-of-$NICHE can be a long term business. It seems that once $NICHE-stream demonstrates sufficient demand, Netflix can simply license the same content and provide customers with a superset of the content that $NICHE-stream provides.
It's also unclear to me that Netflix is even lacking in this specific niche. My ex-girlfriend loved browsing my netflix over a VPN because it had so much of her african american comedy. (Admittedly, what she - an African woman - considered a good selection might be different from what westerners consider a good selection.)
In a few cases, e.g. Parables ($NICHE=devout christians), I can see how they offer something different - they deliberately exclude content (e.g., movies that offend christian sensibilities) that their members don't want. But that doesn't seem to apply here.
Hey,
Thank you for the feedback :)
I am Ludovic, Cofounder and CTO of Afrostream.
Netflix is big, that's sure, but as said in the thread, Netflix is like the big Three (ABC, NBC, CBS), and target the largest audience possible. And I am an avid client of Netflix too. They have an offer of African-American contents, even some African contents for sure. It's not complete.
We have curated for one year some of the best and unseen African or African-descendant contents. Not only the Festival-sanctioned movies and series but also, the contents which are popular in local markets and that we are bringing to our customers.
Seems to me that is more a segment than a niche, but I like to play a little with the words :)
Our vision here is double :
to propose a large selection of african, african-american movies and tv series, first in France (I am French), and french spoken countries, in Europe and Africa, first. Netflix is not yet in Africa, so we have some technical challenges there, but we will be basically the first.
To propose the new african and african american positive characters to all : on that regards, our customers will not only be black
Do you know Drama Fever : the core of the Drama Fever is Asian contents, they have 3,5 millions active users. 80% of these users are non-Asian.
That's one of our goal : to let know that there is a diversity in movies, and that everybody could watch them with same pleasure
Your analogy breaks down though, because the big three channels could only air one show at a time. Netflix can license (or make) as many shows as they want without hurting their popular appeal.
Basically, if you're successful, there's nothing stopping Netflix from licensing the same shows as you. Since they're Netflix, they'll probably negotiate better content deals, have better recommendations, better mobile apps, more supported devices, etc.
Another danger is that Netflix has experience making their own shows. If your target audience looks enticing enough, Netflix can produce exclusive content to woo them over. They've already started doing this with anime (Knights of Sidonia).
All-in-all, this seems like a really tricky business to be in. I wish you luck.
I understood your point of view. Netflix is better than us now, that's a fact.
I personally don't think Netflix could be exhaustive in every way because the curation work is very important here, to satisfy every segment in the world.
Netflix is not in Africa though,
Drama fever, Crunchyroll, viki.com did well in their segment. And we intend to be the best in ours.
I don't know about the others, but the thing that Crunchyroll does differently than Netflix is that it's a lot more like the Steam of Anime. Prior to Crunchyroll, it was extremely common (still is, I think) for fans to simply download fan-subbed versions of content and the license holders wouldn't see any money until they were able to sign a deal with a distribution company that would later sell a series on disc.
Crunchyroll provides the immediacy of fansubs but with legitimacy and sees that license holders get paid something where they weren't getting paid anything.
Additionally, the type of content that Crunchyroll provides isn't necessarily something Netflix would go after, in that it is released on an episode by episode basis (in line with air dates in Japan) rather than all at once (as is the typical Netflix model) and that there is rarely dubbing (which most, though notably not all, Netflix anime has).
That said, Netflix has been seriously expanding their anime efforts. I really do wonder if Crunchyroll is going to be able to keep growing as Netflix expands its presence more and more.
All that said, the one thing I'm really not sure of is how long Netflix can continue to do more and more licensing deals and original content without increasing its subscription cost. In that respect, I think the iTunes model is a lot more stable (and I'm perfectly happy paying for close-to-airtime delivery I get for the shows I do watch through it).
My only gripe with paying for that content is that the price premium seems to be pretty high on iTunes given that the content has revocable DRM (then again, Apple is more likely to be around in this space for a long time than any of the other current players).
In summary: I think you might be right, but it's definitely a pretty dynamic situation. Hope it goes well!
I want to echo the other reply to this post. Crunchyroll offers its customers a way to view the shows as they are released, which was a big change from how anime was normally consumed. Viki works because of the very strong fan subbing community that it has built. From my point of view the best way to compete with Netflix is to find a niche that is hard for them to fill. It's unlikely that Netflix can get people to sub their shows for free. Netflix wasn't designed with the queue type setup that crunchy roll has, etc.
As far as technical challenges on streaming/hosting in Africa - I remember hearing about Kili (http://kili.io/) on HN a while ago. They do AWS-like infrastructure located in Nairobi, so could make it easy to get started in East Africa. Good luck!
I'm not sure the comparison with Drama Fever (or even Crunchyroll) is fair. There was an enormous market of people looking for Asian content (as evidenced by the fansub scene, and Asian-themed conventions worldwide), which made the bet much safer. An African Drama Fever would probably have to create its market to reach such a stage.
That said, it's a good idea, a big bet, and I sincerely wish you the best.
Hi, just a small question. Is "Intouchables" a film you would carry or does the majority of the cast need to be "African-American" (or Afro-French, Afro-Brazilian, etc etc)?
Intouchables is definitely an Afrostream movie. We want to show some positive characters who are Afro-descendants and it's definitely a movie which shows that
> I don't get how Netflix-of-$NICHE can be a long term business. It seems that once $NICHE-stream demonstrates sufficient demand, Netflix can simply license the same content and provide customers with a superset of the content that $NICHE-stream provides.
The marginal value of content with a strong, dedicated, but niche following to Netflix -- whose branding is mainstream and not targeted to that niche -- may be less than it is to a provider specialized in targeting that niche, which means that the licensing fee Netflix could afford to pay is less.
Further, your argument presupposes that all streaming licenses are non-exclusive. That is, rather decidedly, not the case. If someone else secures an exclusive license, Netflix cannot license the same content and provide customers with a superset of what the niche provider offers.
> It's also unclear to me that Netflix is even lacking in this specific niche.
It probably isn't compared to any major provider that a consumer is going to find today. OTOH, it could be in the future, especially if a more targeted competitor exists that starts outbidding Netflix for exclusive licenses for content in that niche.
"The marginal value of content with a strong, dedicated, but niche following to Netflix -- whose branding is mainstream and not targeted to that niche -- may be less than it is to a provider specialized in targeting that niche, which means that the licensing fee Netflix could afford to pay is less."
Yes, I had yummyfajita's question and this does make sense... a "niche" (this is pretty big to be calling "niche" really, but let me discuss the generic case) could afford to charge a bit more of interested customers and focus that stream on somewhat more pricy licenses.
Which, once again, just makes me think that Netflix is, if not "cutting itself off at the knees", at least hobbling itself with such a low flat-rate price. On the other hand it can hardly afford a complicated "full cable"-style offering, but some sort of middle ground may be something they're forced to do someday. Hulu, too, for that matter... even as a subscription service focused on TV it seems to me that the selection is limited by the fact the subscription price is just too low.
In the meantime, as a consumer I have no trouble mixing a nice Netflix subscription for flat-rate stuff and mixing in per-show fees from Amazon, but it's still money Netflix seems to be leaving on the table.
I can't think of any modern non-monopoly companies that have obtained global domination without a need to perpetually acquire niche competitors along the way. That's especially so as several companies (Netflix, Amazon, Apple, Google, and non-US players at large) vie for limited attention.
> It seems that once $NICHE-stream demonstrates sufficient demand, Netflix can simply license the same content and provide customers with a superset of the content that $NICHE-stream provides.
I would not be so quick to discount the difficulty of building a large number of commercial relationships in the long tail of African production. The mere time investment and tedium of dealing with producers who are not used to distribution channels beyond their local habits is a barrier to entry - and hence a valid strategic positioning.
But does this not apply to the startup as well as the incumbent. There is nothing to suggest that it will cost a startup less than Netflix to negotiate all these contracts.
> Netflix can simply license the same content and provide customers with a superset of the content that $NICHE-stream provides
"can" is always a problem with big companies, they have so many other works to do they rarely get time. Thats where small companies can win some niche market and do a better job.
If you consider Netflix more analogous to HBO[1]than to cable than this is similar to BET.
I think individual channels will win out over cable style packages, though there might be room for an aggregator that offers discounts.
I'd rather pay for HBO and Netflix over cable.
To my knowledge the majority of cable channels are just content from a handful of producers divided up by "genre", since most people will have entire sections of unused channels that don't match their interest when paying for cable I think we'll move towards pick and choose — possibly really soon.
[1]Which is their quoted mission, "become HBO faster than HBO can become us".
They could try, but in the Afrostream case, could they catch up with the community we build. I mean, we have 72k facebook page fans, and a lot of their bought a one year subscription because they are ignored about their movie needs in first case. I am the first fans of my fans too.
Let's face it : Netflix could do that, but they have one year to catch up, fight is on
Netflix is huge. No offense, but I doubt they'd have to do much "catching up" with the userbase. Most of your subscribers are probably already Netflix subscribers and would be happy to cut their monthly expenditures by unsubscribing from your service once Netflix offers the same content. Your play would be original content and/or exclusive licensing that makes it so Netflix can't easily duplicate your service, at least not without years of waiting for licensing contracts to expire. This is the same dilemma Netflix faced as content producers started to ask why they can't just cut Netflix out, and Netflix solved it with compelling original content.
It seems part of your argument is that your content is so niche, Netflix would rather spend licensing money on content that has broader appeal, which is fine, except that its totally dependent on Netflix not changing its strategy, and that's a bad basis for a sustainable business.
As i said, I hate the world Niche, and I never use it only to say I hated this word,
African descent movies are so diverse. We have an African Diaspora all over the world which produce a ton of contents you never saw, you don't even know their existence and thant's our goal to diversify the point of view of a maximum of people. Yes Netflix has resources, a lot of resources but we know our market well. They need to catch up, that's my word for now, fight is on
"They have to raise prices or start offering mix&match packages" makes sense to me. Since they seem to resist this, it locks them out of these sorts of markets. Is that a good idea? Well, that's above my pay grade....
We don't intend to be "Netflix for blacks" or "Netflix for African people only" too, that's a bizarre idea to me, in fact.
We have some quality movies in our catalog, and we hope to make it discover to all of you people :)
It's also unclear to me that Netflix is even lacking in this specific niche. My ex-girlfriend loved browsing my netflix over a VPN because it had so much of her african american comedy. (Admittedly, what she - an African woman - considered a good selection might be different from what westerners consider a good selection.)
In a few cases, e.g. Parables ($NICHE=devout christians), I can see how they offer something different - they deliberately exclude content (e.g., movies that offend christian sensibilities) that their members don't want. But that doesn't seem to apply here.