How Hollywood unintentionally constructed Netflix

Johnny Depp as Captain Jack Sparrow in a “Pirates of the Caribbean” movie running toward the camera and yelling. Johnny Depp starred within the Pirates of the Caribbean franchise. | Screenshot through Disney

Netflix’s beautiful rise wouldn’t have occurred with out unwitting assist from the businesses it now competes with.

When Netflix began streaming TV reveals and films again in 2007, it had the market kind of to itself. On the time, video on the web meant YouTube, the place you would see canine on skateboards or brief SNL clips.

Now, everyone seems to be racing to catch as much as Netflix and launching their very own streaming providers. However the large media corporations are far behind.

That’s their very own fault. They watched Netflix construct its streaming powerhouse proper in entrance of their noses — and even worse, with their help.

That’s one of many tales we inform on this week’s episode of Land of the Giants: The Netflix Impact, which focuses on the influence Netflix has had on Hollywood and on the individuals who run it and work in it.

It’s a narrative that kicks off with a journey down Sundown Boulevard, the place Netflix’s presence manifests bodily. Billboards that used to promote films and TV reveals from quite a lot of studios and networks are actually devoted solely to Netflix merchandise as a result of Netflix bought the billboards outright.

However the story actually begins in 2008, when Netflix broke into streaming in a giant means, by a backdoor: It bought the digital streaming rights to films from Disney and Sony — that’s, films you’ve heard of, like Pirates of the Caribbean — from Starz, the pay TV channel. Starz had ambitions for its personal streaming service, however these fizzled, which is why you’ve got most likely by no means heard of Vongo.

And that’s why Netflix received these films for a music — round $30 million a yr — whereas turning into a fairly good streaming service virtually in a single day. For context: In 2012, when Netflix wished to make a brand new streaming deal for content material from Disney, which by then had realized that streaming was an actual factor, Netflix paid an estimated $300 million a yr.

A contractual loophole let Netflix get Disney’s and Sony’s stuff with out chopping offers with Disney and Sony. However quickly sufficient, media corporations have been scrambling to promote their stuff on to Netflix: They noticed Netflix as a simple supply of almost free cash — if Reed Hastings and firm wished to pay them for previous reveals and films they have been already promoting different locations, then they’d be pleased to do it.

However that free cash wasn’t actually free: Netflix took the stuff Hollywood thought-about its leftovers and constructed an enormous enterprise with it — and ended up competing straight with the established media gamers, utilizing their very own content material. Which leads us to as we speak, the place the most important media corporations on this planet discover themselves years behind what was a Silicon Valley upstart.

It’s an interesting story, and you may hear it now.

Subscribe to Land of the Giants on Apple Podcasts, Google Podcasts, Spotify, Stitcher, or wherever you hearken to podcasts.

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