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Netflix and Spotify: The race to the bottom

  • By Alan Knott-Craig
  • April 8, 2013

I recently read that Spotify is about to launch a video streaming service and is getting into content. WTF?

 

Have they not seen the Yahoo movie? Thanks to @downtempo for these flashbacks from the past:

 

2008

“On the heels of Yahoo!’s better than expected earning after thee bell Tuesday, the web giant will announce a partnership later today that represents a new focus on original content.”

http://www.cnbc.com/id/33413397

 

2005

“The third category is where Yahoo is drawing attention lately. Semel said he is plowing into original content, such as Kevin Sites in the Hot Zone, because he doesn’t want to wait ten years until others (traditional media) figure it out. He’s going to give the content development experiment 18 months before he gets really concerned about having a hit show.”

http://www.zdnet.com/blog/btl/yahoo-2-0-time-spent-more-money/1983

 

The likes of Spotify and Netflix are on the wrong side of history. Where is the money in being the UI? Content is king, with the only exceptions being where there is a distribution monopoly.

 

Spotify and Netflix have no content (House of Cards notwithstanding, does anyone else see the irony in that name?)

 

They are predicated on using the Web as a distribution network, and you can’t monopolise the Web.

 

I don’t think there is anything wrong with Spotify or Netflix per se; the flaws are more in the revenue expectations. These are nice little businesses, but nice big business? I think not.