In the 1990s, I was fortunate to lead the creation of the very first point-to-point no-download video streaming business, MegaMedia Networks, which delivered over 800,000 TV and movie streams a day via MegaChannels.com, almost a decade before YouTube existed. What I can say from my experience is that point-to-point connection is a costly endeavor. Those costs could severely impede modern-day streaming giants like Netflix, which hopes to grow from a single channel into an all-encompassing video platform envisioned by some in the industry.
Netflix is a channel, and they’re great at that. But because they were the first channel to be delivered via the web, some in the industry mistakenly believe that they’re the entire market when it comes to web-delivered pay TV, when in reality they’re just one channel among thousands in an emerging internet TV environment. For Netflix to become a platform itself, the costs would go through the roof. They’d pay a fortune both for right to content and then again to deliver it to users, and they’d continue to be very limited in what they can offer, particularly due to digital rights management issues. How can you have a true entertainment platform with nothing live, no sports, no pay-per-view, no music, etc? Millions of people have already figured that out, and now the industry is starting to see Netflix as the man behind the curtain in the Wizard of Oz.
Both the technical challenges posed by point-to-point streaming and the costs associated with content could derail efforts by Netflix to become a platform for content rather than just a channel. Whether they’re developing content in house, or licensing it from everywhere, the cost to “stay fresh” will be a big hurdle to further growth, and eventually becoming a true mainstream alternative to pay TV. With recent announcements from CBS, HBO, Showtime, Starz, Univision, and just days ago, NBC, the networks seem more determined to try their own hands at online streaming rather than going through Netflix.
With Rabbit TV Plus, we’ve taken a different approach. As an agnostic aggregator, we bring all of these sources together, allowing those individual content providers to work together as a complete entertainment ecosystem for consumers. The future of television is not just about what the industry wants. Consumers are driving these changing trends after all, so anything that’s not both convenient and affordable will go the same way as cable TV. If Netflix isn’t careful, it could find itself falling into that category.