Don’t Believe the (Financial) Hype

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The tides of venture capital in the streaming sector have ebbed and flowed for the entire 25-plus years that I have been in this space. Bursts have occurred around 2000, 2004, 2010, and 2019, often coinciding with consolidation in the telecom and broadcast industries, along with significant increases in global internet services capacity.

During the pandemic, our streaming industry became the “darling” of investors. Streaming came of age. Every startup in the streaming space was going to be “the Netflix of … ” (insert “Sport” or “Porn” or “Accountancy Training”). And yet here we are, 2 years later, and Netflix is the Netflix of Netflix, and all those investors in other projects are now talking Netflix down (“Oh my goodness, they lost a rounding error in terms of growth, so let’s slam them”) to position their own investments as the market leader, when, in fact, the consumer is happy watching Netflix. As the cost of living has risen, saturation has proven as much of a financial limitation as the Netflix proposition.

Reaching “peak” market saturation should be a sign of success: it should provide a moment to pause and enjoy being the market leader. But instead, the pressing need to show quarterly growth and deliver value to shareholders remains the tail that wags the dog. Financial critics are unable to see anything of value other than short-term ROI.

Price increases win shareholders but lose customers. The desperate shift to advertising-supported models destroys perfectly good services and excellent content like hideous video-graffiti sprayed all over an art gallery because the share price, not the value proposition of the service to its consumers, must always come first. It makes investors happy while leaving the rest of us to pay through the nose for advertisers to advertise to us so we barely see what we want to stream. It’s entirely bonkers.

Meanwhile, the social media universe, with Facebook at the helm, has lost all its driving momentum without decreasing its staggering energy demand. It has freewheeled itself into a metaverse cul-de-sac while pretending that 5 million or so Oculus users are “da future dontcha know.” Facebook has rebranded itself into a pointless hole that is already looking less interesting than 3D TV. And it’s not just a generational thing—my kids aren’t living in the meta­verse either. Social media long ago reached its peak, and it’s only staying alive by massaging statistics that are read only by financiers.

Don’t be fooled by the “Teens live in social media” myth. Look around and use your own senses to explore the reality, rather than swallowing the hype from the social media platforms themselves, which re-enforce their own self-importance in our lives much as tobacco companies do by repeatedly telling you it’s impossible to quit their product—even if it will kill you. Try talking to the kids face-to-face, and you’ll find they jump at the chance for real-world engagement and readily drop their phones to chat. In contrast, try talking to their parents, and see if you can get a word in edgewise around their constant social messaging to check that the kids are not on social media. It’s a ridiculous irony, and we live in a world of warped perception that is difficult to untangle or even challenge without fear of ridicule.

Contrary to “engagement” statistics that would have us represented as using these tools more than ever, in practice, this is really just #social-washing: it’s a process of hiding the information you are looking for in a way that you have to scroll through a million adverts and political mind-games, making your “engagement” much longer than it really needs to be when all you want to do is look up the name of your friend’s cat. Fifteen minutes of being distracted from the thing you wanted to do is not “engagement” from the consumer point of view. It is not “social networking.” It is just a waste of your time. And yet, the more time you waste, the more “value” the social network service provider gains.

If I had written this in 1994, you would have laughed at the state of this “sci-fi” future: people staring at their hands for hours and hours with no idea about what is going on around them in real life. Kids not knowing how to shake hands because they have barely met any real people since 2019. We have sacrificed social norms for scrolling thumbs. And that’s just the way these investors and financial pundits want it. They drive businesses away from providing the consumer a value proposition and into the realms of “consumer exploitation.”

I am reminded of a webcast I did in October 2001—a month after 9/11—from the HSBC HQ in London. HSBC announced its acquisition of “Household,” which you and I knew as the largest US “lender” (one of the “toxics” that helped cause the crash in 2008). Curiously the chairman of HSBC described it to his banking investor audience as “the purchase of the largest US asset gatherer.”

If you stop and think about that for a moment, it says everything: the asset gatherer lends you a few quid in the quiet hope that you never pay it back. It is secured against your assets (property, etc.), which are then considered the asset gatherer’s asset until the day you pay back the increasingly expensive loan. In fact, it would be really bad if you did pay off the loan, since then the asset gatherer’s value (your asset) on its books would go down.

So, when I hear the endless diatribe on the financial side of the streaming industry, I take it all with a pinch of salt. If the financial markets think that Netflix is a dud, then brilliant— maybe the financial investors will leave all of us in the streaming industry alone to get on
with enjoying those profitable and excellent quality services and stop breaking good things in the name of “ROI.”

At least Netflix has managed a good dec­ade of remaining consumer-focused. If they are having a hard time from the idiots in the financial market about meeting their quarterly earnings targets, they need only to wait: those financial pundits will soon lose interest and head off to another corner of the playground to pretend they are experts in a new emerging industry elsewhere and let us get back to building some excellent customer streaming propositions.

It’s about time we dogs started wagging our own tails. It’s time to focus on customers first: they are, after all, the best investors, since they pay money for good service and don’t expect a share in the business.

Dom Robinson ( is co-founder, director, and creative firestarter at id3as.


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