Step 1: groundbreaking service comes in that fills a market hole
Step 2: people flock to service
Step 3: service gets VC funding to continue operations, subsidising the users
Step 4: service gets “copied”, competitors crop up, use VC funding to eke out their own marketshare while making things worse for everyone but themselves
Step 5: expansion plateaus as interest in service generalises (basically, everyone who could be interested, is already using it)
Step 6: VC funding depletes, company has to start making a profit - leading to price hikes, which is followed by other players in the market as that’s how capitalism works
Step 7: price hikes not being enough, service tries to capitalise on their userbase (think restricting features to a higher paid tier, introducing new tiers that strip away features, introducing ads, etc.)
Step 8: market is saturated with plateaud services, user movement is minimal, and everybody hates it because it’s expensive, and reintroduced the same problem the initial innovative service meant to fix.
Sure, but Netflix was not venture capital as far as I know. It started with mailing subscriptions then grew into greatness and now, it’s shittier than ever.
Even in the early days (97-01), they’ve used venture funding (approx $80mil) for the DVD mailing business.
And the reason they didn’t really go the VC funding way later is because they had an IPO in 2002, which meant instead of relying on VC funds, they took on massive amounts of debt to allow the takeoff of streaming.
No, that’s the evolution of venture capitalism.
Step 1: groundbreaking service comes in that fills a market hole
Step 2: people flock to service
Step 3: service gets VC funding to continue operations, subsidising the users
Step 4: service gets “copied”, competitors crop up, use VC funding to eke out their own marketshare while making things worse for everyone but themselves
Step 5: expansion plateaus as interest in service generalises (basically, everyone who could be interested, is already using it)
Step 6: VC funding depletes, company has to start making a profit - leading to price hikes, which is followed by other players in the market as that’s how capitalism works
Step 7: price hikes not being enough, service tries to capitalise on their userbase (think restricting features to a higher paid tier, introducing new tiers that strip away features, introducing ads, etc.)
Step 8: market is saturated with plateaud services, user movement is minimal, and everybody hates it because it’s expensive, and reintroduced the same problem the initial innovative service meant to fix.
Which is why i call it vulture capitalism: born to feed the vultures.
It replaced linear tv with video on demand
VOD was a thing before streaming tho
And it was terrible, expensive, and did t work half the time.
Blank tapes were more convenient IMO.
Nah, it worked pretty well. Streaming was just more convenient, and came too soon after VOD became widely available.
Sure, but Netflix was not venture capital as far as I know. It started with mailing subscriptions then grew into greatness and now, it’s shittier than ever.
You know wrong.
Even in the early days (97-01), they’ve used venture funding (approx $80mil) for the DVD mailing business.
And the reason they didn’t really go the VC funding way later is because they had an IPO in 2002, which meant instead of relying on VC funds, they took on massive amounts of debt to allow the takeoff of streaming.