Roku, Netflix, Start Behaving More Like The Annoying Cable Giants They Once Disrupted

from the meet-the-new-boss... dept

It’s always interesting to watch one-time disruptors shift toward turf protection, apparently remembering none of the annoyances that drove their passion for disruption (and ultimate success) in the first place.

Once Netflix was as powerful as the telecom sector, it shifted its tone on issues like net neutrality. And as the now-dominant company has increasingly faced competitors, it has taken to nickel-and-diming its subscribers (see the recent rate hikes followed by fees for those who share passwords, a practice it once heralded as little more than free advertising).

Roku has also gone from pesky market disruptor to one of the biggest streaming hardware companies in the world. And their behavior has also, as you might have expected, started to resemble a lot of the cable companies that it once disrupted.

In the last year or two, Roku has been mired in contract standoffs with Google and AT&T as it tries to leverage its market share to take greater control of profitable streaming user viewing, CDN, and behavior data. That’s resulted in a growing number of instances where users have lost access to certain streaming content on certain devices (something you’re going to see a whole lot more of).

As Janko Roettgers at Protocol notes, many of Roku’s contemporaries feel like the company may be getting a bit to big for its britches as it pushes for a bigger cut and more control:

Under the new terms, Roku keeps 45% of net advertising revenues. That’s still less than the cut some competing platforms take, according to industry insiders. However, given Roku’s size, the change has significant impact on the business of these channel providers, with one of the affected publishers calling it “a bit of a money grab” in a conversation with Protocol.

As we noted last year, the future of streaming TV is looking more and more like traditional cable. Especially with the rise of free, ad-supported streaming TV channels (aka “FAST”) popping up on a lot of hardware. Roku wants to take advantage of the company’s massive fifty percent streaming hardware market share to bend other sector companies to its will.

In a book forward in 2016, Netflix CEO Reed Hastings warned about the hubris of successful disruption:

“Throughout my business career, I have often observed powerful incumbents, once lauded for their business acumen, failing to adjust to a new competitive reality,” Hastings writes. “The result is always a stunning fall from grace.”

Like most executives, Hastings hasn’t heeded his own warnings. Once you’ve achieved success and face the kind of young, hungry competitors you used to be, panic often sets in, and you forget what brought you to the top of the mountain in the first place. Especially under the thumb of Wall Street’s demand for improved quarterly returns at any cost. And the cycle continues…

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Companies: netflix, roku

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Comments on “Roku, Netflix, Start Behaving More Like The Annoying Cable Giants They Once Disrupted”

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Naughty Autie says:

Roku, Netflix, Start Behaving More Like The Annoying Cable Giants They Once Disrupted

And this is a big part of the reason I don’t trust new players on the market. I remember when Xbox was new and had really good games to play, but I’ve never bothered to purchase the Xbone because there’s an online requirement that will leave consoles unrepairable once the servers shut down, as stated by Microsoft itself. As the saying goes, “Burn me once, shame on you. Burn me twice, it’s my own damn fault for not pulling my hand out of the fire.”

Anonymous Coward says:

Re: Re:

Actually, we don’t criticize Nintendo for making boneheaded decisions because we hate them. It’s because we love them and want them to do better, just like we discipline our children because we love them and want them to thrive. Of course, only a Nintendo shill would make claims of “hatred of Nintendo” on a site that has criticized other companies just as much, if not more, so that leads me to a question: just how much are Nintendo paying you, Sabroni?

richardm0317 (profile) says:

Rock and a Hard Place

As far as Netflix goes it is probably not so much a case of Hastings forgetting but a matter of there not really being any good choices.

Netflix is hemorrhaging content as every studio is removing their content to use for their own streaming service.

Creating your own content is expensive and the money has to come from somewhere and the only place is from subscribers or borrowing and last I remember seeing is that Netflix has around $20 Billion in debt. Considering that interest rates are finally increasing and the amount of debt borrowing more money is probably not a viable choice. Now that Netflix is losing viewers I doubt it can borrow more money without paying a serious premium. If I was running a bank there is no way I would lend Netflix any money at this point.

Unless Netflix comes up with a few “must see” shows or some of the studios realize that running their own streaming service is more trouble than it is worth (and that is possible) you are going to see the company continue to lose market share until there is little left and Disney or some other studio buys the company.

I foresee a path similar to Yahoo where Netflix never really dies but just keeps becoming less and less relevant.

Stephen T. Stone (profile) says:


Netflix comes up with a few “must see” shows

Even if Netflix has a “must see” show on its hands, that show will be released in full on the same day. Disney+ had the good goddamn sense to know that weekly releases keep the show in the press/public consciousness for longer than a weekend, which can help build hype for remaining episodes. (Now if Disney would have the good sense to make something more than middling retreads of Star Wars and MCU material.)

And that doesn’t even get into how Netflix will legit cancel popular/well-reviewed shows after two seasons because…reasons. I almost want to take bets on whether Squid Game will see a third season.

JBDragon (profile) says:

Netflix with different prices for HD or 4K, etc, etc is just annoying. The prices hikes over and over. I dropped 4K, and I’m on the fence of just dropping Netflix all together. I don’t remember thelast time I watched something from them. I watch so much youtube these days as there is a lot of great content on that platform.

I have AppleTV+ which is $5 a month and it doesn’t matter what Resolution you watch in, all the way up to 4K and HDR. Netflix is playing these cable companies up charge on everything game. I think it’s going to get worse if the rumors of Ads become true. They’ll jack prices once again, but say, you can keep your current price but not you have to watch the ads.

One reason I don’t have HULU. I signed up for the free month of HULU, I watch one 30 minute TV show and it was filled with ads. Not only ads, it was the same “@ Broke Girls” ad, and they would play in like 2-3 times in a row before going back to the show. You can’t channel surf when you are streaming. I never watched anything else in that month.

I’m just so close to canceling Netflix. As for ROKU. I used to have a couple of their boxes. I’m glad I don’t these days for a few different reasons. I have my Apple TV”s I mainly use which are far, far better!!!

Anonymous Coward says:

nothing to see here

Just as I pointed out here years ago, and was met with vehement disdain.

Cutting the cord is a fallacy because you’re still paying the same ISP that you were paying before you dropped cable tv service. Now you’re also paying an additional fee to the streaming company. That’s 2 (two) separate, ever-increasing-fees for internet access and tv/movies, where you used to pay 1 ever-increasing-fee for the same thing.

Stephen T. Stone (profile) says:

Re: Re: Re:

We didn’t have a pandemic on our hands.

Netflix did have up-and-coming competition before COVID-19 was a thing, to be sure. But the same pandemic that boosted Netflix also boosted the other services, which helped the major studio-backed services gain a better foothold against Netflix. Whereas Netflix could still coast on what legacy content it still had prior to the pandemic, it can no longer do so now that the studio-backed services have yoinked almost all of the most popular legacy content from Netflix within the past couple of years.

But to be fair, this argument doesn’t counteract your point. Things were heading in this direction before the pandemic; the past two years have only made the situation worse. That said: Next time you want to say “years ago”, maybe specify (or at least approximate) how many years you mean. You could’ve meant five or ten years ago, for all I knew⁠—which is how I took your original comment. I’m willing to own my mistake if you’ll admit how I could’ve made that mistake in the first place.

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