BEST OF THE WEB: How Netflix plans to blow up the television industry

The television industry is changing rapidly. As users demand content more quickly and in different formats, piracy has increased – and traditional studios are still trying to keep up.

Meanwhile, users are already fed up with being forced to wait for content. Australia has one of the highest rates of piracy per capita in the world.

But there are a few companies trying to change this. At the heart of this transformation is Netflix, the American online DVD rental and streaming company. Not only has the business changed the way people view television by allowing web streaming, but it’s just invested $100 million in a new TV show starring Kevin Spacey.

It’s trying to become the internet version of HBO.

In this piece at GQ, the publication looks into what Netflix is actually doing to the television industry, and how it’s going about transforming the way people view content. Chief executive Reid Hastings puts it simply:

“The traditional entertainment ecosystem is built on it, and it’s a totally artificial concept…The point of managed dissatisfaction is waiting.

“You’re supposed to wait for your show that comes on Wednesday at 8 p.m., wait for the new season, see all the ads everywhere for the new season, talk to your friends at the office about how excited you are.”

That method is dead, Hastings says. It’s exactly why Netflix just put every episode of its $100 million new show online at once. Given the way people are viewing entire seasons of television in just a few days, he says, it makes sense to put that content online at once.

In fact, that’s how Netflix plans to become the next HBO, he says.

Hastings describes his plan to make Netflix bigger than it is now. It’s the same methodology used by YouTube channels – people want content immediately, not next Thursday at 7pm.

All of this is made more fascinating by the fact Netflix had a shocking 2012. Hastings split the business into DVD and streaming arms, then charged more for the privilege of using both. Customers hated it and the share price plummeted from $US300 to a low of $US77.

The piece delves into some quirky parts of Netflix culture, including its famous constitution called the Culture Deck. It’s well known among executives – even Facebook chief operating officer Sheryl Sandberg said:

“It may well be the most important document ever to come out of the Valley”.

Some of the best parts? No limit on holiday or sick days, and no one tells you when you clock on or off. Hastings even says he has no idea how much vacation time his people take.

Even more remarkable? Hastings doesn’t even have an office.

It was only a matter of time before a company like Netflix figured out how to change television for the better (or worse). Although Hastings may have had a bad few years at the helm, it seems the company is on the precipice of changing the way we watch TV.

Zynga at a crossroads

Mobile gaming company Zynga has not had a good few years. Rising to its peak a few years ago, the business has since lost a huge number of executives, with its share price falling 71% since its IPO in December 2011.

The company also has to deal with a huge shift in its major user base, Facebook users. As more of them shift to mobile devices, the company has to come up with new products that work for them.

Overall, the business has lost a huge amount of value, from $US20 billion at its peak to $US2 billion. The mistake? Not going mobile sooner.

“Do I wish that we would have gone all-in on mobile and made a bigger commitment to it earlier?” Mark Pincus, Zynga’s founder and chief executive, said in an interview after the earnings release. “Yes.”

In this piece at The New York Times, Pincus explains some of the company’s biggest mistakes.

“It’s kind of ironic, isn’t it?” Mr. Pincus said. “You’re holding a phone, an inherently social device. Yet the experience we have is a more fragmented one.”

Zynga is in trouble. As Wedbush Securities managing director Michael Pachter says in the publication:

“[Zynga is] definitely saying the right things, now all they have to do is execute.”

The industry is always talking about how the shift to mobile will be hard for Facebook. But for some companies, like Zynga, it’ll be even harder.

Is venture capital destroying online education?

There’s been a huge push towards free, online education in the past few years. Universities are now offering short courses in anything from business management to software coding, and companies like Udacity are benefiting from the trend.

But as this piece on The Awl explores, is it actually ruining tertiary education?

California state universities are now using Massively Open Online Courses for credit. It seems like a good, cheap alternative for American students who have to take out huge loans for classes. But as the piece says, it can be difficult to find good ones.

Part of the problem is that you miss out on a huge amount of classroom interaction. And as The Awl says, Udacity uses employees, not professors, to supervise classes.

Doesn’t the quality of a culture rely in part on a deep, dynamic interaction between those who are adults now, and those who will be soon? Isn’t that worth sacrificing ourselves for, perhaps even restoring higher tax rates so we can pay for it?

This piece is a little US-centric, but if you’re interested in the world of online, free education then it’s worth a read.


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