Netflix, voting systems, eCommerce in Sri Lanka & food – Friday Note

Netflix

A week of interesting numbers:

The drive for original content is likely to weigh further on Netflix’s cash flow, the company wrote in the July document outlining its content accounting. The main reason for that is that it recognizes the production expenses of making a show, while it’s being produced. That could mean Netflix will incur costs years before it can make any money on the content.

  • and speaking of numbers, Netflix is notoriously secretive about audience figures. A Nielsen claim to be able to track viewers was met with a stiff response:

a Netflix spokesman said the streaming-video company was not participating in the effort. “The data that Nielsen is reporting is not accurate, not even close, and does not reflect the viewing of these shows on Netflix,” the company said in a statement.


Mixed-member proportional representation (MMP)

Quite a mouthful! Even from my Sri Lankan perspective, New Zealand’s recent election and its aftermath were drama filled; and from that perspective, the formation of a government by the Labour Party in NZ was very relevant.

Context

Sri Lanka elects a President as head of state and a legislature (Parliament). The current government is an uneasy coalition between the two historically dominant parties, with a Prime Minister from one party and a President from the other. Despite the considerable governance issues this has caused, my understanding is that many of those involved feel that the sheer scale of issues that have to be dealt with (including a foreign debt crisis and constitutional reforms) makes a cross-party consensus vital. An MMP system, which can lead to coalitions and minority governments, could be a means to build this into the electoral system.

This article by Sri Lanka’s Minister of Provincial Councils and Local Government is worth quoting:

However, the Proportional Representation system also came with shortfalls. It required greater campaign budgets, and violence escalated between political rivals. There is also a racial stigma attached to it. As we have seen in the recent past, racial tendencies tend to rise under this system. The election expenditure is also significantly greater than under the First Past the Post system.

Therefore, the Mixed Member Proportional system was born combining the best of both Worlds. Most people are in favour of this system, and it is truly in the interests of justice and democracy that I believe this is the way forward.


Sri Lanka e-commerce legislation

A quick note on this important development:

This is a crucial part of ongoing reform program to improve the global competitiveness of Sri Lanka. In the 2017 edition of the World Bank’s Ease of Doing Business rankings, Sri Lanka slipped one spot to 110. However, a crucial issue remains with the inability to receive payments through services such as PayPal.


Food

A quick run through a hot sector:

  • I started watching this with the sound off and immediately thought of porn…but that’s not what’s important.

As I’ve mentioned before, logistics and last mile delivery is a key battleground between Walmart and Amazon and this is the latest weapon to be deployed.

One reason food sector is so hot is that there are many points of entry and room for innovation.

figures cited by The Financial Times suggest that the two-year-old UberEats service — a standalone app separate from the main Uber taxi service — will record over $3 billion (£2 billion) in gross sales this year.

  • Facebook has launched a food order and delivery service in the US.

Facebook combines options from a number of food ordering services like EatStreet, Delivery.com, DoorDash, ChowNow and Olo, as well as restaurants like Jack in the Box, Five Guys, Papa John’s, and Panera, so you don’t have to search through multiple places to find what you’re looking fo

  • Amazon has been running a partnership with Olo since September.

Monday note – everyone is woke & against BigTech

A quiet weekend both professionally and personally.

Big Tech

I was amused by a number of articles that showed how the zeitgeist is shifting against big tech, on both social and economic grounds. Among the more notable ones were:

I’m all for this scepticism and this story – Airbnb’s home-hotel hybrid will open in Florida next year – did nothing to dissuade me.

I think this tweet captured my feelings best:


There is a long-running debate within a group of my friends on how to best to market vegan products and veganism. We have one vegan who I regard as quite militant, and a couple of others (including myself) who aspire to eat more vegan meals. My personal advice (based on my professional experience) is to focus less on the animal cruelty aspect and to incorporate more health and taste issues.

With all that in mind, and with the Silicon Valley scepticism I discussed earlier, this article was especially interesting – What Exactly Is Vegan-Mayonnaise Company Hampton Creek Selling?

It has a little bit of everything, from insights into marketing

to the cult of the disruptive entrepreneur

and the inevitable backlash

Friday Notes – no chill with Netflix & Walmart

Two stories have dominated my week, both linked by the common idea of fighting back.

Netflix

Disney CEO Bob Iger on Thursday delivered a blow to Netflix, saying the company had decided to move Marvel and “Star Wars” films to its forthcoming streaming service, set to launch in 2019. >>

There’s ongoing drama with Netflix and various content creators, who were ostensibly its partners.

Backed by Hollywood’s deepest pockets, Hulu has a chance to reshape the burgeoning business of online TV. After years of licensing films and shows to Netflix to replace their own sagging DVD sales, owners Walt Disney Co., Comcast Corp., 21st Century Fox Inc. and Time Warner Inc. are giving Hulu the support it needs to be a vigorous competitor. They also stand to gain more control over their own futures as viewing moves to the internet, where streaming movies and TV shows are projected to generate $46 billion this year globally. >>

What’s going on?

Studios concerned with Netflix’s dominant and lucrative position in the video streaming market are trying to redress the balance. They are doing so by backing Netflix’s rival Hulu, and by creating their own streaming services, either individually or through consolidation.

Movies Anywhere is an especially interesting example, both because of the number of studios participating and for licensing reasons.

a host of other industry heavyweights have now jumped on board to launch an expanded version of the service called Movies Anywhere. It’s both a cloud-based digital locker and a one-stop-shop app: customers connect Movies Anywhere to their iTunes, Amazon Video, Google Play, or Vudu accounts, and all of the eligible movies they’ve purchased through those retailers appear as part of their Movies Anywhere library. Given that the Movies Anywhere app works across a number of platforms, it basically allows them to take their digital film library with them no matter what device or operating system they’re using. >>

But remember…

Netflix is very aware of this and has ramped up spending on original programming.

Source: Bloomberg

Netflix also has an advantage overseas, with its international share of streaming rising to 41% in the past year and the company’s base of subscribers being greater abroad than in the U.S.


Amazon vs. Walmart

With a projected annual growth rate for e-commerce of 40%, Walmart is growing faster than Amazon, which is around 22% – though admittedly Walmart is moving from a much lower base. >>

As I tweeted:

Here’s what’s happening

Walmart is making a surprisingly good show of taking on Amazon in the online shopping space. They are doing so through acquisitions and innovation.

CNBC

And they aren’t fighting alone.

On Thursday, Target and Google announced that they are expanding what was a years-old delivery partnership from a small experiment in a handful of cities to the entire continental U.S.

The expansion will allow Target to become a retail partner in Google’s voice-shopping initiative, which lets owners of the Google Home “smart” speaker order items through voice commands like owners of the Echo can do from Amazon.

The announcement comes seven weeks after Walmart inked a similar deal with Google to offer hundreds of thousands of products through the service. Other big-box retailers like Home Depot are also on board. >>

What to look out for

As the Whole Foods acquisition showed, this arms race is only going to escalate. Expect more acquisitions and innovations!

Monday Notes – politics, policy & media

Over the weekend

  • He is both polarising and popular, and the adaption of The White Stripes’ Seven Nation Army as a Jeremy Corbyn political anthem is one of the more unusual and amusing stories from 2017.
  • How to Recognize Propaganda | Cold War Era Educational Film | ca. 1957

I was amused by this video that showed up on my YouTube feed. The more things changed…etc.


Sri Lanka

With a new budget due from the Government, this is a reminder that Sri Lanka’s economic development plans remain complex and perilous.

While I share many of their concerns about the employability of Sri Lanka’s workforce, I would urge caution in terms of the employment law. The situation is far more complex than a simple hire-fire paradigm.


Online Marketing & E-commerce

It’s becoming very obvious that a key issue in e-commerce is to own your own delivery and logistics network. Two articles caught my attention last week:

  • Walmart is still playing catch-up to Amazon.com on same-day delivery, though it is worth noting that their Jet.com purchase appears more successful than the market predicted.
  • Meanwhile, Amazon’s focus appears to be on final-mile delivery that is still outsourced to UPS and FedEx

Monopolies, Uber and Information

The dominance of Facebook and Google as information gatekeepers strips us of power and leaves us helpless. This is what they, and those that aspire to join them, are designed to do.

In the crucial early hours after the Las Vegas mass shooting, it happened again: Hoaxes, completely unverified rumors, failed witch hunts, and blatant falsehoods spread across the internet.

But they did not do so by themselves: They used the infrastructure that Google and Facebook and YouTube have built to achieve wide distribution. These companies are the most powerful information gatekeepers that the world has ever known, and yet they refuse to take responsibility for their active role in damaging the quality of information reaching the public

There were parallels for me when reading about the misidentification of the Las Vegas shooter (and the role big tech had in this) with this article about Uber. Specifically:

This is the way these companies are supposed to work – they run at a loss until they become a virtual monopoly, and hopefully by the time they dominate the market entirely they will have found a way to repay their investors. It’s what Facebook and Amazon did. And Uber has a plan too, a particularly unpleasant one. It was never meant to be a taxi firm; this is only its chrysalis.

Uber isn’t just a company; it’s a fully-fleshed model for the economic structures emerging throughout the developed world. It breaks the laws of old-fashioned national and local governments with impunity (just watch; London will roll over eventually). Just about every new tech firm has to announce itself in relation to Uber: an Uber for dogs, an Uber for education, an Uber for sadness. It’s a machine for processing human relations. We wander blind in the darkness, until an algorithm puts one person in another’s car.

The connection here is the effect of these increasingly monopolistic companies on us:

From then on, all our relations are transactional, and all of them are processed – from tipping to conversation – through Uber’s platforms. It’s not just a piece of computer technology; it’s a social technology, designed to individuate us, to turn us into consumers and entrepreneurs and nothing more, to leave us utterly alone and utterly powerless.

This is why steps to improve the quality of content (for example, human moderators) do not address the real reason we should be concerned— the by-design monopolistic nature of a handful of companies that dominate our digital lives.