Breaking-the-wheel: Netflix’s social resurrection and its virtuous cycle
Breakeven costs of production, synchronicity, and vertical social networks
Simply put, Netflix needs a social network and we need it now! Here’s why…
The half-life of Netflix content
In a recent interview with Stratechery, Eugene Wei discussed the “half-life of Netflix’s content assets”:
Netflix’s terminal value as a company is what is the half-life of their content library… [Netflix] is going for the economies of scale advantage over its competitors. But the unit economics are determined a lot by what period they can amortize that content spend over… if Netflix has to spend $20 billion a year to generate new content, but the amortization period is like a year, that’s much different than if they’re able to spread that over five years or ten years.
There’s a lot to unpack there, but let’s start with the known-knowns. First, Netflix actually has disclosed the useful life of its content assets. From a 2019 presentation about its accounting methods:
