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I love your list of desired attributes for a D2C disney platform. Keeping it simple, and focused on the end consumers experience is going to be critical to compete digitally. I think those simple fixes you mentioned, even just having something playing before you browse, shows why there are still billions of dollars wrapped up in linear cable TV and why it has not fallen and disappeared as fast as everyone has been predicting. The browsing experience leaves much to be desired on Netflix, if disney can build into their digital iteration feedback loop a focus on customizing individual’s browsing experience to decrease decision making time and quickly get content infront of your eyes, I think they stand to build a very strong moat (along with their content, of course) against the likes of amazon or netflix.

Thanks for the thoughtful insights. I agree NCBU has been fairly ‘dip-toe-into-the-water’ by making strategic investments instead of a large product investment and launch that would, as you say, require an organizational and structural reorientation. I think these investments could be seen as letting others experiment for you. The truth is, those are three entities (buzzfeed, vox, snapchat) are all approaching the dissemination of news and general entertainment content in three very different ways. It would be risky for NBCU to go all in on one method (say even a propriety streaming platform, which could ultimately be the most competitive move) but they have gathered an incredible amount of learnings from the actions of those three companies.

I think the next phase of NBCU will look very different than the current, and I agree they are going to make some bigger bets in the future to stay relevant. But I think if any company correctly figures out how to create the feedback loop you mentioned using their own propriety data, they stand a chance in changing their processes efficiently and intelligently enough to stay competitive.

Great post man, thanks for sharing something that is interesting and in your wheelhouse of expertise. I love the focus on education and I think Fender could continue to be the leader for new musicians on learning. I used to pay $20 for a half hour lesson at my local music shop that offered lessons. I definitely felt a community in my little music shop but as there are far fewer of those, Fender should take the opportunity to establish a strong online community for new learners especially ones in rural areas. I could even see them taking it a step further, and inputting data sensors on new guitars (similar to the tuning tool) but that can transfer things like practice hours, accuracy %, and complexity to the learning software that the student is synchronized learning with. Their app can determine if they have been practicing enough hours just based on the sensory data input into Fender’s cloud. Excited to see what they keep doing as I know I will want access to musical instruments for my whole life, digital or otherwise.

Reddit is the master of having a large platform benefit from tons of niche categories. While the front page of Reddit is definitely heavily visited by users, the real engagement and stickiness happens in the subreddits. When I was learning after effects and flash at the beginning of my career I relied heavily on asking the animation and adobe community about features, quick tips, and tutorials; one time my program crashed and someone helped me recover my project files. There are subreddits to help people lose weight and to get over a lost loved one, I think there is tremendous value in developing value add services to these niche communities in exchange for possible monetization efforts or a donation approach. May be tough because of how sensitive the community is to corporations, but I think as someone mentioned a crowd sourced mentality to raising capital stands a better chance then diluting the site with more ads. Nice post!

Ha that’s super funny. I wonder where the benefit comes from this compared to taking that money and having something custom made on freelancer or fiverr or 99designs? I’ve seen folks get names and logos for around that price or less from outsourcing to designers but they are always true designers. While the volume of options may seem helpful I feel like option fatigue makes only a small handful of options worthwhile. Additionally, there’s a psychological satisfaction to being involved with the thinking behind the creative process the whole time. I have done a lot of freelance custom design for clients and often times working directly with them early to iterate once or twice on a name or logo helps with buyers remorse and often helps them feel more confident and excited about their name and logo, an inherently subjective topic.

This is an interesting take on the role of reviews. I would say one thing that a platform like Rotten Tomatoes fails to offer is the different utilities of a film. RT aggregates reviews in a fairly standardized process, hoping that the wisdom of the widest crowd possible will be a proxy for taste. But this has left a lot of white space for verticals and those who curate content to a niche audience. For example, it’s easy to s*** on emoji movie because it lacks depth and everyone can be a movie critique, but the ‘job to be done’ for a family that weekend may have been to entertain a group of kids on a saturday afternoon. Only the most sophisticated reviews take this wholistic approach in separating utility of the film. Personally I trust the r/Movies subreddit on what films I should see more than RT because when I look at that subreddit I believe the taste of the aggregated crowd is more in line with my own taste. As more films and TV are made and option fatigue becomes a serious reality, I think RT will struggle to be the expert curator for niches leaving tons of room for new trusted channels.

So I’m a property-owner and have spent a LOT of time with property managers. I think OpenDoor is a super interesting prospect and I agree there are industries that are ripe for market makers. However, real estate is a strange one that has continued to be the exception to many rules. The big issue is that real estate is so fragmented. It’s going to be very difficult to standardize how you work with sellers to understand their properties better. You can send someone to inspect, but that part of the process is no different than it is now and is the most pivotal and important role. In one visit, no one is able to see inside the walls appropriately enough to properly value a home. The arbitrage in this is where people make their money in mature markets, so trying to take on these huge assets without appropriate analysis is a giant risk. I agree that the incentives of OpenDoor are to get the valuation right, but their incentives are also to keep the renovations CHEAP and fast, and I mean real cheap to the point of risking how much value are they adding into a given real estate market. If they make cheap renovations, say goodbye to consumer trust and their whole platform breaks down. Additionally, the broker fees are often to the buyer not the seller so why would a seller care about the added fee? Your buyer does, and theres your fee problem. I think calling it just a matching problem is trivializing how much variance there is in taste, WTP, different city markets…etc.

The reason the housing market is so crazy is not cause someone hasn’t been smart enough to aggregate properties (lots of websites do this) or own the properties (literally what property developers do) its that the variance in quality and renovation is so high that it nets out the economies of scale that a website offers. Additionally, with the internet of things movement coming most houses will start to self-detect maintenance issues which will completely commoditize the “valuation” industry and increase the transaction speed; so OpenDoor’s value proposition is not very future proof. If I was going to invest even a small portion of $320M into a business I’d like to know they will be around in a dozen years or two even if they do “win” in some markets.

I love the idea above someone mentioned the netflix of fitness. Create a marketplace where my favorite fitness people (maybe someone i follow on instagram or maybe a celebrity or an athlete) can offer online Live classes and I can pay to access them. Beautiful. Clear value proposition, attractive industry, dynamic pricing allows for all segments to be serviced…etc. The only issue I think is that current fitness clubs with tons of members can easily offer that as a free additive service to their already expensive membership fees (i.e. barry’s or equinox). But for celebrities and athletes, if you can attract them and solve the chicken-egg problem, sign me up to do push-ups with Tom Brady!

Great observations! Etsy is definitely the platform for artists and community. As Amazon drives prices down, Etsy sellers can drive ‘value-up’ and provide more artisanal handmade services with an authentic feeling. This value-add model is definitely at conflict with Amazon’s customer-centric (in which they really just mean ‘low price for high convenience’) model. I also think more and more people will be doing this ‘direct to consumer sales’ approach with their own products, I wonder if Etsy could get into the artist-as-a-service model in which individuals are providing consulting or artistic support services (like what Catalant wants to do) but maintain their community-centric/artisan approach.

One thing I’ve wondered is what happens when Netflix starts to get closer to the global market saturation point? They may be able to sustain their double digit subscriber growth with international expansion for another year or two, but their american market (whom most of their content is produced for) is seeing growth that a company 4x its size would see, in the 4-5% range. Will Netflix continue to charge their consumers more or try and cheapen their content spending habits to eventually return profits to their shareholders? Amazon and Hulu have built their platforms from the beginning to have different tiers and revenue opportunities. Hulu can show ads to most of their users as well as collect a subscription fee for those with a higher WTP. Amazon has prime video for prime members but still sells a la carte for everything else. Apple has their a la carte platform and can introduce a complementary streaming service to apple music. But it will be very painful for netflix to all of a sudden start showing us ads. And very painful if they reduce their content spending habits as consumers and content will always change with social zeitgeist. And very painful if they raise their subscription fees without raising their content spending even more. If they stop spending on new content, I don’t believe a strong historical or legacy library of content is commercializable enough, otherwise Viacom would still be in the $20B+ club. So obviously I completely agree and am still fairly bullish on Netflix, but I do wonder what happens at that inflection point when investors say “great, you have 400M subscribers around the world paying you $11.99 each (or $4.7B) and you’re still spending $8B a year on new shows. When do I see my money back?”. Sounds like the only lever they are really going to have left is to charge consumers more, which I imagine will only work in the US or super premium markets, which could force them to price discriminate.

Anyway, lots to think about. Excellent piece SLA!

I love this topic Eliza! This is an excellent example of how not all large incumbents are ‘destined to be disrupted’ by what a digital age entails. Fundamentally, if an organization focuses on correcting any friction to the service they are providing for their consumers there is little reason for mass number of consumers to jump ship. It also doesn’t leave ‘low hanging fruit’ on the table for startups, forcing startups to truly be differentiated and better than dominos to attract customers (unlike the Taxi industry in which any improvement in service would have stole away customers immediately). By lowering friction to Domino’s primary core competency, pizza, dominos has continued to guarantee itself a piece of the mind share of a pizza consumer when they are ready to order.