Media: Did Netflix Come Up To The Expectations?

(Drivebycuriosity) - The rise of Netflix was greeted with much enthusiasm. Economists tried to explain the business model of Netflix and other online companies. They believed that Netflix, Amazon & Co. will make a lot of money by selling a huge variety of movies, books and other items. Theoretically e-commerce companies can offer their products & services worldwide which gives them a huge advantage. If for instance there are worldwide just 1,000 potential buyers for a specific DVD, book or other item than it doesn`t make sense for a traditional shop to store this item. But Netflix and other global operating companies can reach the full demand. Therefore online companies can make a lot money by selling rarities which have just a few potential buyers. This phenomena is described by the Long-Tail chart below.

 

 (  source)

 

On the left side of the chart are the bestseller & blockbuster items, moving farther to the right side are items which have a much lesser demand. Traditional shops focus on the items on the left side which have a high chance to be sold. Netflix & Co. can sell items on the far right side, the Long Tail. These items can add up to a huge revenue & profit (the space below the curve) even each item has a very low demand. Customers (consumers) also benefit from Netflix & Co. because the online companies give them a huge variety and they cater for almost any taste.

Did Netflix come up to the expectations? Nope!

Today Netflix´s catalog is disappointingly small, there are not many movies from the Long Tail. Many important films are not available. I miss cult classics like Bertolucci´s "The Dreamers" (starring Eva Green) and the British new wave film "Long Good Friday" (with Helen Mirren). There is a very long list of not available films on my Netflix queue ( a kind of Long Tail) including "The Man who fell to Earth" (with David Bowie), "Bad Lieutenant: Port of Call New Orleans" (directed by Werner Herzog), "The Tenant" (directed by Roman Polanski), "Copycat" (Sigorney Weaver & Holly Hunter), "Ran" (directed by Akira Kurosawa), "The Lady from Shanghai" (directed by Orson Wells), "We own the night" (with Joaquin Phoenix, Mark Wahlberg & Robert Duvall) and many more. The expected Long Tail effect did not realize on Netflix.

Apparently the management lost the interest in movies which are not blockbusters. Netflix spends $ millions on deals with "The Obamas" and "Harry & Meghan", but less on rare movies. I think this is caused by the attention effect. Those who worship the Obamas or Harry & Megan don´t care about rare movies and they might never have heard of Orson Wells, Kurosawa or Roman Polanski. What a shame!

PS On the top you can see Helen Mirren in "The Long Good Friday"