Netflix Feeling the Pangs of Content Delivery Evolution

I don’t have Netflix, but I have been enjoying the Prime video service of Amazon Prime perhaps just a little too much. Every time I get close to finishing some obscure series on Prime, Amazon restocks with something I really want to see – especially intelligently written British television shows like Touching Evil and Trial & Retribution. But Netflix is feeling the pangs of a changing market.According to Seattle PI, Netflix stock is taking a hit because of uncertainty in the ever changing market of content delivery. That’s not surprising. My impression is that content delivery, far from being mature is still in its infancy.

In some industries, especially in software – we saw much of the traditional distribution channel disappear. Sure, you can still find some utility software, MS Office and some Adobe products, and maybe a few games – in stores – but precious few compared to five years ago. You would think the natural evolution of the digital distribution channel, especially with pervasive availability of internet access, would lead more people to buy directly from creators of content. But we have Amazon selling packages and digital downloads.  Apple (and soon, Microsoft) playing on our fears that somehow vendors cannot be trusted. And generally speaking – customers who don’t really want to look very far. We’ve really replaced Channel 1.0 with a Channel 2.0.

But I believe Channel 2.0 has a much shorter lifespan than 1.0, but it will improve in incremental .1 updates until some great comes along to smash it. Channel 2.0 is built on web services, and web services constantly evolve. It doesn’t take much to lose customer loyalty – explaining the plummet of MySpace and the triumph of Facebook. But then again, many of the big market players are also hedging their bets by filing for patents on unremarkable things like bouncing the screen when you reach the bottom of a list on a digital device.

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