Netflix, Hold the “Flix”
Is gaming their step to Prime or their next Qwikster?
The news that Netflix is going to try to break into gaming cuts two ways.
On one hand, it makes sense because it’s something that is a growing play in the subscription world (Apple Arcade, Xbox Game Pass, Stadia, etc). Netflix, perhaps more so than any other company, is synonymous with the subscription model. And this synonymity is a result of saturation, which is also why this makes sense. Since everyone who wants Netflix, at least in the US, now seemingly has Netflix (hence the declining subscriber numbers here), Netflix needs something else to entice people both to stick around and to continually pay up more money for their subs.
Another way to put this is that Netflix Games would seem to be analogous to Amazon Prime Video. That is, where as Prime Video is a cherry-on-top of Prime itself, Netflix Games would be the same for Netflix. And I think the Amazon parallel runs deeper in that Netflix has stated that their intent is to mine their own IP to create at least some of their games. This is both hoping to differentiate with content no one else can make but also perhaps giving creatives more of an incentive to work with them. Amazon is very clearly running this playbook by cutting Prime Video deals which include the ability to leverage things like Alexa (see the Michael B. Jordan Super Bowl ad) and even the crown jewel: shopping.
The war for talent is in full swing and while Netflix has won in recent years with both money and reach, the money equation changed when Amazon and Apple entered the arena. And the reach equation is changing with Disney and all the rest. Netflix needs to keep adding perks for both subscribers and for talent. Again, I suspect gaming is the first foray here.
As for that other hand…
I also think gaming may be a mistake for Netflix. At least in the way that they’re saying they’re going to go about it. I think simply trying to leverage their IP won’t work. The entire history of gaming is riddled with the carcasses of some of the best IP in the world cut down by mediocre-to-poor games. From the infamous Atari ET game on down. It’s not enough to have great IP.
And frankly, it’s not entirely clear that Netflix actually has truly great IP, but rather perhaps the best vessel ever created to serve up any IP, in the form of streaming video. We actually have already had Stranger Things mobile games for some time. Are they huge hits? I might be wrong, but I don’t think so. House of Cards? Good luck making a compelling game there, Kevin Spacey situation or not. Bridgerton? I mean, maybe? An erotica game? Any number of the movies they make that get watched a ton but I honestly can’t even remember the names of as they’re entirely forgettable? Good luck.
Now, to their credit, it does sound like Netflix may have hired a great executive to lead this charge. But my suspicion would be that he quickly realizes their IP leveraging path isn’t going to work and instead takes them down the path of original games. Of course, that is much easier said than done — just ask… Amazon. But if they are able to do that, then they should leverage Netflix, the streaming service, to create cinematic content based off of those games. In other words, the opposite of the current gameplan. See also: The Witcher. Netflix should already know this!
I also suspect that if Netflix wants to continue down this path, they end up buying successful gaming studios. Creating games is hard. Creating hit games is harder. And creating hit games over and over again, as you would need to for a subscription service is boss level hard. You’re not going to build that overnight. And presumably Netflix wants this offering humming soon.
So, we’ll see. Again, I wouldn’t be surprised if this is a bit of a quagmire for Netflix. Perhaps not a Qwikster, but still perhaps one that ends up just as deadster. Instead, to me, it would make a lot more sense to break into other obvious streaming subscription plays — ones more directly compatible and easier to execute. Perhaps podcasts or audiobooks.¹ Again, go after Amazon! I mean, they’re sort of doing it with apparel (and teaming up with Shopify, no less).
These are less sexy and more importantly from Netflix’s perspective, eat up less time than, say, gaming.² So we get why they’re going down that path. I still think they end up heading over to the sports arena eventually, but they’re going to need to break their mindset around on-demand to make that happen. I think this happens, but it will take years, once other streamers offer live sports as exclusive parts of their bundle.³
One more thing: the Netflix name strikes me as slightly problematic for building this streaming kingdom. I mean, Facebook has kind of made it work (albeit, mostly through acquisitions — and I still think the ‘Facebook’ name should be reserved for the ‘Blue App’ and everything else should be under a different, Alphabet-like umbrella). And others like Apple made it work by dropping “Computer” from their name. It will be harder for Netflix to drop the ‘flix’ of course. And, damnit, I already made my Qwikster joke.
It is worth considering just how smart Amazon was to go with such a generic name instead of ‘Bookster’ or whatnot. For the first 20+ years of their life, Netflix proved to be the perfect name. They were taking on a world where people would have to take time to drive to a video store, make a selection, drive home, watch the movie, drive back and return the movie. Netflix made this significantly easier and less time-intensive at first by utilizing the internet and the good old U.S. Postal Service. Then, they were able to double down on the “net” when internet speeds got fast enough for streaming. And now we have a $200B+ company. But it’s not clear what the next evolution of the core service is here, or that there is one. Hence, the branching out. But again, the branding isn’t really set up for that. I think it’s fine, but they didn’t nail this as Amazon did. It’s the old ‘iTunes’ problem, but as an entire company.
Published on July 28, 2021 📆Written from San Francisco, CA 🗺Written on my hot-as-hell 2020 13-inch Quad-Core i5 MacBook Pro 💻
¹ I have to believe they won’t do music as it remains a money sinkhole, but it’s also sort of table stakes now for Apple, Amazon, Spotify, etc…
² If sleep really is the competition, maybe they buy Calm or the like? That certainly eats up a lot of hours!
³ One other thought: just as Spotify is trying to becoming synonymous with audio, what if Netflix does the same for video? What if, say, they bought Masterclass?
