When news stories (fail to) collide

A thought on Joseph's recent thought on Netflix and on the way journalists often fail to notice the implications of one part of a story on another.

Here's a statement from a press conference earlier this week (which apparently came with enough glitches of its own to cause a two hour delay):

“We’re fundamentally in the membership happiness business as opposed to the TV business,” is the way CEO Reed Hastings described his view in Netflix’s first video conference call for analysts. CNBC’s Julia Boorstin and BTIG analyst Rich Greenfield pitched the questions, on a Google Hangout, synthesizing contributions from analysts. And Chief Content Officer Ted Sarandos didn’t flinch when Greenfield specifically asked about movies, news, and talk shows. There’s “no reason” why Netflix wouldn’t expand into those areas, he says. Hastings added that “HBO and Showtime do sports.”

And here are some excerpts from the story Joseph cites which came out Monday.

LOS GATOS, Calif. (AP) — Netflix’s Internet video subscription service works around the clock, but it’s unusual for more than two dozen of the company’s engineers and top managers to be huddled in a conference room at 10:30 on a midsummer Wednesday evening.This is a special occasion. It’s near the end of a grueling day that will culminate in the premiere of “Orange Is The New Black,” the fourth exclusive Netflix series to be released in five months. The show’s first episode is called “I Wasn’t Ready,” and everyone in the room has been logging long hours to ensure that the title doesn’t apply to the debut.

Netflix Inc. invited The Associated Press to its Los Gatos, Calif., headquarters for an unprecedented glimpse at the technical preparations that go into the release of its original programming. The shows have become the foundation of Netflix’s push to build an Internet counterpart to HBO’s premium cable channel.
...
On this night, the setting has been transformed into Netflix’s version of a war room. The engineers are flanked by seven flat-screen televisions on one side of the room and two giant screens on the other. One big screen is scrolling through Twitter to highlight tweets mentioning “Orange Is The New Black,” an offbeat drama set in a women’s prison. The other screen is listing some of Netflix’s most closely guarded information — the rankings of videos that are attracting the most viewers on an hourly basis.
...
“This will be a successful night if we are here at midnight and it turns out that we really didn’t need to be because there were no problems,” says Yury Izrailevsky, Netflix’s vice president of cloud computing and platform engineering. The mission is to ensure each installment of “Orange Is The New Black” has been properly coded so the series can be watched on any of the 800 Internet-connected devices compatible with Netflix’s service. It’s a complex task because Netflix has to account for viewers who have different Internet connection speeds, various screen sizes and different technologies running the devices. About 120 variations of code have been programmed into “Orange Is The New Black” to prepare it to be streamed on Netflix throughout the U.S and 39 other countries. Another set of engineers had to ensure foreign-language subtitles and dubbing were in place and streaming properly.

Others are still checking to make certain that the English dialogue properly syncs with the video being shown at different Internet connection speeds. Just before another Netflix series, “House of Cards,” debuted in February, engineers detected two minutes of dialogue that was out of sync with video played on iPhones at certain speeds, prompting a mad scramble to fix the problem before the series was released to subscribers.

At the risk of belaboring the obvious, news and talk are highly topical and require quick turnaround. Sports is even worse, being live and requiring your system to handle huge spikes in traffic. It certainly sounds like these genres would require major upgrades for Netlflix.

In cases like this it's always useful to think about the McDonald's breakfast example and ask "is this a product that can be sold at a profit using existing resources?" For original series and movies, the answer is probably yes. I'm not sure Hastings and Sarandos are up to it, but I'm confident that it could be done (and I would love to see Netflix do it). For these other genres, the answer is probably no, which means that, unless you have exceptionally deep pockets (perhaps even Amazonian pockets) or an open field, you should proceed with caution.