Netflix Criticizes EU Quota Plans

AlphaAtlas

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Netflix's stock price surged after they released a strong quarterly earnings report this week. However, KitGuru spotted another interesting bit in that report: the EU has plans to institute content quotas, and Netflix isn't particularly happy about it. According to the company, being forced to produce some arbitrary amount of European media would limit the creativity of their producers, even if they can meet the quotas in the short term. It's possible, if unlikely, that similar legal requirements could spread overseas.

The European Union is currently rewriting its audio visual rules, which will eventually require subscription streaming services to devote a minimum of 30% of their catalog to European works. In addition, some member states are looking to require services like ours to invest some portion of local revenues into European works. We anticipate being able to meet these requirements by evolving our content offering. We are heavily investing around the world to share stories broadly and to strengthen local production capacity and opportunity. We'd prefer to focus on making our service great for our members, which would include producing local content, rather than on satisfying quotas, but we anticipate that a regional content quota which approximates the region's share of our global membership will only marginally reduce member satisfaction. Nonetheless, quotas, regardless of market size, can negatively impact both the customer experience and creativity. We believe a more effective way for a country to support strong local content is to directly incentivize local content creators, independent of distribution channel.
 

Cyraxx

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Wow, and people complain about Trump and his tariffs.

Shit like this is ridiculous, it's the equivalent of mandating that a US news company devote 30% of its content to European news. Absolutely fucking atrocious overreach of government.

If Europeans want to watch American content then so be it. You can't cram shit content down people's throats and expect them to like it.
 

Oldmodder

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Netflix, and others too i recon, should tell us Euro boys to go f... ourself.
There must be more sane places in the world to sell your product, and EU have lost sanity a long time ago.

I should perhaps say Netflix,,, and others i assume, have absolutely 0 of the TV i want to watch, or so little of it i would be stupid to pay their price to watch it.
 

kju1

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Well nobody said it had to be GOOD content. Just setup a camera to record random nature scenes in the EU and publish that ;). (thats a joke folks...)

SJW comes to Netflix shows....how awesome.
 

arnemetis

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I wonder if it will turn out like baseball games here in the states where if too few tickets are sold, they can't broadcast the game. Would it end up that it requires x number of Netflix subs in EU (or wherever) have to watch the regional content? It's not exactly the same, but I could see this somehow developing such that well if I'm forced to produce specific content for you, you better have enough subs or we're blacking out EU to ONLY have that content?

I'm not sure I made my point clearly, but I have to get back to work.
 

JackNSally

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Yet another reason for business to bug out of the European market. It's just not profitable there.

Must be why all those European companies are going bankrupt and all the U.S. companies are pulling out of that market? /s
 

Dalexx

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Everyone calm down. We all know Govt know best. They are doing this for you....the people!
 

singe_101

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Well nobody said it had to be GOOD content. Just setup a camera to record random nature scenes in the EU and publish that ;). (thats a joke folks...)

SJW comes to Netflix shows....how awesome.

Let all the bad playwrights record plays using their own cameras, actors, etc. and stream them. Will anybody watch? Not really. But they're European. Theater looks classy in the thumbnails/menu. Or cooking shows of traditional recipes, which might actually get more views.
 

mope54

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Seems pretty hypocritical with their decisions regarding protectionism and marketing of products. They're absolutely opposed to Microsoft or Google requiring usage of their browsers, but perfectly fine in dictating the percentage of a streaming catalog that has to pay into EU pockets.
The corollary to that is that it's the EU citizens pouring money into Netflix' pockets that eventually damages their local economy.
In a perfectly theoretical world, we'd be able to allow the market to resolve itself. In the practical world we live in, however, the global market space is such where we can't simply rely on local competition to be viable again global players.

Just one basic example, we're at such a state in our market economy where it's totally conceivable and likely that a local content creator would only be able to reach local eyeballs by licensing that local content to Netflix. Think about the implications: my next door neighbor in small-town, Greece can only show original Greek content to all of us in the neighborhood by licensing that content to Netflix, then we pay Netflix to access it, but the money never comes back to our local small-town, Greece economy.

That's a fundamental shift in how market economies have operated for the entire duration of human history. This is not a SJW issue, but rather one where anyone paying attention to market economies has to address. This may or may not be the best way to address it, but it can't be ignored. Governments may or may not know what's best for us, but the alternative is to leave it up to the corps, which a is bizarre entity to put any kind of trust into unless you are a shareholder and only interested in returns--because that's all a corp is required to pay attention to.
 

SixFootDuo

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This is a good law. America is the not center of the universe.

It's very important moving forward that companies take into considerations local customs, the culture, etc if they are going to move into oversea markets.

if I lived in the UK, I would not want all American programing on my set. 30% sounds great.
 

mope54

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This is a good law. America is the not center of the universe.

It's very important moving forward that companies take into considerations local customs, the culture, etc if they are going to move into oversea markets.

if I lived in the UK, I would not want all American programing on my set. 30% sounds great.
The way I interpreted the press release is slightly different from the discussion thread: it looks like Netflix is being required to re-invest 30% of the revenue back into local production rather than required to deliver 30% of the content.

That is, if they make 60m from UK customers, they need to re-invest 20m into the UK economy and not that 30% of their shows be UK in origin. I haven't looked into it any deeper, this is just my interpretation of the Netflix public statement.

***actually, it looks like both content delivery *and* re-investment:
In addition, some member states are looking to require services like ours to invest some portion of local revenues into European works.
 
D

Deleted member 133315

Guest
Netflix uk is fucking shite, it started shite, it got even shite’er, I bought new TV and got a free 4k year of netdix, 2 years later it’s still shite and filled with weird shite from abroad, pointing at you usa n mexico and france and italy.

No I don’t want to find el chapo.

Free UK tv > netdix

I would rather listen to Whitey Houston drowning in a bath full of avocado’s and nuts, with some John tweeting “wtf bitch, get them nuts out of your mouth, I told you not eat the avocados”.
 

J3RK

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Any rule/law that forces someone to create content is asinine.

Sorry, you can't open an art gallery here unless 30% of our local population approve of your artwork, or 30% of your imagery in your works of art have something to do with our locale.

I agree with the idea of incentives rather than quotas. Quotas are the quickest route to crap. (in just about any situation)
 

Paladin21

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The corollary to that is that it's the EU citizens pouring money into Netflix' pockets that eventually damages their local economy.
In a perfectly theoretical world, we'd be able to allow the market to resolve itself. In the practical world we live in, however, the global market space is such where we can't simply rely on local competition to be viable again global players.

Just one basic example, we're at such a state in our market economy where it's totally conceivable and likely that a local content creator would only be able to reach local eyeballs by licensing that local content to Netflix. Think about the implications: my next door neighbor in small-town, Greece can only show original Greek content to all of us in the neighborhood by licensing that content to Netflix, then we pay Netflix to access it, but the money never comes back to our local small-town, Greece economy.

That's a fundamental shift in how market economies have operated for the entire duration of human history. This is not a SJW issue, but rather one where anyone paying attention to market economies has to address. This may or may not be the best way to address it, but it can't be ignored. Governments may or may not know what's best for us, but the alternative is to leave it up to the corps, which a is bizarre entity to put any kind of trust into unless you are a shareholder and only interested in returns--because that's all a corp is required to pay attention to.

In your example, the content is licensed by Netflix; that money goes to the content creator and is reinvested however they like. They could also post it up on YouTube or any other content site and ask for donations/subscriptions or just rely on content monetization from the platform. If you want to talk about traditional markets within the context of your small town, they could even set up a projector in their house/yard/whatever and charge admission. There has never been a more free market solution to move into for content creation. It doesn't take a major contract with a studio to do a series; the technology is available to small producers and there's a plethora of distribution channels to choose from. The fact that something is or isn't available from any particular distribution vendor is irrelevant to the overall situation.

This is a good law. America is the not center of the universe.

It's very important moving forward that companies take into considerations local customs, the culture, etc if they are going to move into oversea markets.

if I lived in the UK, I would not want all American programing on my set. 30% sounds great.

If respect for local customs and norms was of interest to international customers, they wouldn't get a Netflix subscription, and Netflix wouldn't make money from the venture. If they do rate this highly enough to effect profit margins, then Netflix would respond by addressing these concerns. That's sort of the essence of capitalism: what are your customers willing to pay for? This sort of bullshit we-deserve-respect laws are perfectly in keeping with the socialist leanings of the majority of the EU states.
 

Joust

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Wow, and people complain about Trump and his tariffs.

Shit like this is ridiculous, it's the equivalent of mandating that a US news company devote 30% of its content to European news. Absolutely fucking atrocious overreach of government.

If Europeans want to watch American content then so be it. You can't cram shit content down people's throats and expect them to like it.
Pretty much this.
 

twonunpackmule

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This is a good law. America is the not center of the universe.

It's very important moving forward that companies take into considerations local customs, the culture, etc if they are going to move into oversea markets.

if I lived in the UK, I would not want all American programing on my set. 30% sounds great.

So, instead of subscribing to said content you wish to have, you think they should mandate other providers to have what you want? That's dumb. If you want "30%" more EU content, then subscribe to that content. Streaming is A La Carte. It's a pretty vast house to begin with as I have no trouble finding content from outside my "Center of the Universe." If more EU content wants a place on the streaming table, then perhaps they should set up their own service for people to subscribe to?
 

mope54

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In your example, the content is licensed by Netflix; that money goes to the content creator and is reinvested however they like. They could also post it up on YouTube or any other content site and ask for donations/subscriptions or just rely on content monetization from the platform. If you want to talk about traditional markets within the context of your small town, they could even set up a projector in their house/yard/whatever and charge admission. There has never been a more free market solution to move into for content creation. It doesn't take a major contract with a studio to do a series; the technology is available to small producers and there's a plethora of distribution channels to choose from. The fact that something is or isn't available from any particular distribution vendor is irrelevant to the overall situation.



If respect for local customs and norms was of interest to international customers, they wouldn't get a Netflix subscription, and Netflix wouldn't make money from the venture. If they do rate this highly enough to effect profit margins, then Netflix would respond by addressing these concerns. That's sort of the essence of capitalism: what are your customers willing to pay for? This sort of bullshit we-deserve-respect laws are perfectly in keeping with the socialist leanings of the majority of the EU states.
Your suggestions don't make any sense beyond armchair theorizing. In our current world, there is no real opportunity for someone to create a series and self-publish it via youtube or a backyard projector. That's ridiculous to even suggest that as an alternative to publishing on Netflix and it ignores the enormous amount of damage global entities can inflict on local market spaces.

Netflix, as just one example, completely decimated the streaming market and *eliminated* two entire industries. They didn't reduce an industry, they completely eradicated it. And not just one single company, an entire freaking industry. That's real damage and you can think that it was good progress or bad progress but you can't simply ignore it and "let the market correct" this problem because our economy has moved into digital space that does not have the same limitations that physical space had on market movement until and through the 20th century.

Blockbuster, for example, never recovered from streaming's intrusion into their market space. There exists a number of reasons for why they ultimately failed, but it can't be ignored that digital intrusions take a lot less capital to move than physical intrusions. They faltered in delivering streaming services for about a short time, but ultimately the changes were too quick for them to adjust and they folded--and that was a major corp in a major market in one of the most robust economies in the world. There's no way an underdeveloped market in an underdeveloped economy has a remote chance of sustaining that kind of onslaught.

Consider that we have a few historical, major creative "spaces" in the US: Hollywood, Nashville, and Motown come to mind. The two former physical locations whereas the latter was a group label primarily identified in Detroit.

If Apple Music wanted to move the heart of country from Nashville to Dublin, for example, they have the infrastructure and economic resources to do that. They could infuse billions of dollars spotlighting local artists and refuse to promote our US artists--just choke them right off the vine. Again, this is a multibillion dollar industry and it can still happen just like it happened to other industries and even music itself. In the 22nd century we'd be reminiscing about that Nashville era just like we had a Motown era back when it was still a local label producing local talent that has now been purchased, homogenized, and globalized. Again, these are examples of the kinds of damages this can wreak on a robust economy, so you can imagine what it might do to an underdeveloped economy like Jamaica or China. China is interesting in that a significant portion of the population is wealthy and digitized but a huge swath of the rest of the population is still essentially going to sleep via candlelight and tilling fields with ox.

To think that someone can reliably produce something under those conditions, say like the next Walking Dead, and compete against AMC with backyard viewings is ridiculous. But to suggest that the few who actually do make it under those circumstances would be able to replenish the lost capital through licensing/royalty negotiations is bizarre in that you must not have any clue the kinds of money that does (or doesn't, rather) change hands under those kinds of agreements.

For every ten dollar sub, some local economy gets a penny to share? That's a healthy economy to you? No, this is a problem and it needs to be addressed. These policies may not be the best way but ignoring the problem is foolish. What we do now is going to set the rules for the economy in the 22nd century.
 

SmokeRngs

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Maybe the EU should tell their own content creators to create shows and movies their own people want to watch. If EU citizens are enjoying the content on Netflix more than local content the problem isn't with Netflix.

What a bunch of fucking morons.
 

twonunpackmule

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Your suggestions don't make any sense beyond armchair theorizing. In our current world, there is no real opportunity for someone to create a series and self-publish it via youtube or a backyard projector. That's ridiculous to even suggest that as an alternative to publishing on Netflix and it ignores the enormous amount of damage global entities can inflict on local market spaces.

Is it ridiculous? Re-read exactly what you just wrote right here.

*Looks at content providers on Youtube who are doing exactly what you're saying they can't be possibly doing*

Yea, I don't think you've been paying attention to actual advancements in media delivery. The problem is not that people can't do it, or it being viable. It clearly is. The issue is the limited areas of distribution that are currently out there. Right now it's a Google owned Monopoly of content distribution for Content Providers. You play by their rules or you don't get paid. There isn't much in the way of "different distro."

The increased popularity of podcasts are also putting a dent in your seemingly misthought opening sentence. There's plenty of untapped market resources and means to get your content to people who want it. The biggest issue is having the structural support of something like Youtube to make that possible for people. Personally, I think Youtube is on a downswing and content creators are looking for new avenues on which to release their content. Twitch has absorbed a lot of Video Game people because of the practices of Youtube. There's definitely an opening for someone to swoop in and give Youtube a run.
 
Last edited:

Paladin21

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Your suggestions don't make any sense beyond armchair theorizing. In our current world, there is no real opportunity for someone to create a series and self-publish it via youtube or a backyard projector. That's ridiculous to even suggest that as an alternative to publishing on Netflix and it ignores the enormous amount of damage global entities can inflict on local market spaces.

Netflix, as just one example, completely decimated the streaming market and *eliminated* two entire industries. They didn't reduce an industry, they completely eradicated it. And not just one single company, an entire freaking industry. That's real damage and you can think that it was good progress or bad progress but you can't simply ignore it and "let the market correct" this problem because our economy has moved into digital space that does not have the same limitations that physical space had on market movement until and through the 20th century.

Blockbuster, for example, never recovered from streaming's intrusion into their market space. There exists a number of reasons for why they ultimately failed, but it can't be ignored that digital intrusions take a lot less capital to move than physical intrusions. They faltered in delivering streaming services for about a short time, but ultimately the changes were too quick for them to adjust and they folded--and that was a major corp in a major market in one of the most robust economies in the world. There's no way an underdeveloped market in an underdeveloped economy has a remote chance of sustaining that kind of onslaught.

Consider that we have a few historical, major creative "spaces" in the US: Hollywood, Nashville, and Motown come to mind. The two former physical locations whereas the latter was a group label primarily identified in Detroit.

If Apple Music wanted to move the heart of country from Nashville to Dublin, for example, they have the infrastructure and economic resources to do that. They could infuse billions of dollars spotlighting local artists and refuse to promote our US artists--just choke them right off the vine. Again, this is a multibillion dollar industry and it can still happen just like it happened to other industries and even music itself. In the 22nd century we'd be reminiscing about that Nashville era just like we had a Motown era back when it was still a local label producing local talent that has now been purchased, homogenized, and globalized. Again, these are examples of the kinds of damages this can wreak on a robust economy, so you can imagine what it might do to an underdeveloped economy like Jamaica or China. China is interesting in that a significant portion of the population is wealthy and digitized but a huge swath of the rest of the population is still essentially going to sleep via candlelight and tilling fields with ox.

To think that someone can reliably produce something under those conditions, say like the next Walking Dead, and compete against AMC with backyard viewings is ridiculous. But to suggest that the few who actually do make it under those circumstances would be able to replenish the lost capital through licensing/royalty negotiations is bizarre in that you must not have any clue the kinds of money that does (or doesn't, rather) change hands under those kinds of agreements.

For every ten dollar sub, some local economy gets a penny to share? That's a healthy economy to you? No, this is a problem and it needs to be addressed. These policies may not be the best way but ignoring the problem is foolish. What we do now is going to set the rules for the economy in the 22nd century.

Your statement starts off lamenting the all-powerful Netflix juggernaut that demolishes entire industries (except it didn't, at least not directly), and ends with stating that they don't pay out enough to worry about anyway. In between you have some extremely specious reasoning about what industry changes may or may not occur based solely on advertising and some really poor information about Blockbuster. Your conclusions are, historically and currently, wrong. If companies could control consumer behavior to the degree you posit then New Coke would be the drink of choice today and we'd all drive a GM car (biggest advertiser in the world). Instead one of these products is dead and the other is a competitor in a crowded market. In your world, no new restaurant chains would ever rise to prominence, because they can't compete with McDonalds. In the future all restaurants are Taco Bell....oh wait, that's not true either.

What the original poster said is that someone in his small town couldn't produce content without having the ability to distribute it on Netflix. This is wrong, on multiple levels. If you want to talk about specifically producing big-budget content like The Walking Dead, and distributing it to a global market, that's a different discussion.
 

J3RK

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You know, there are other streaming networks that provide really good localized content. MHz is one of them. There are others. My wife and I got into all kinds of good shows on MHz. Lots of dark messed up Scandinavian mysteries, fun Italian cop shows, good French mysteries, etc. etc. I don't think there is a shortage of content providers. There's a shortage of output. If there was more output, there would be the need for MHz2 or something like that. Or Netflix Francais, or whatever. These European countries are not helpless. They're full of creative and intelligent people that will produce as much content as they're able to. We seem to be sitting right around that level right now, or we'd see more services, channels, etc. start popping up. These countries are not the size of the US. Even I forget this all the time. We watch a ton of British shows in my house. You start seeing the same actors over and over, and then it hits you. Their country is the size of my state give or take. There's not a good way to assign a percentage of ANYTHING content related to a global market. Put up what's available, and that should be good enough. Forcing the creation of more local content just so non-local content can be made available is beyond stupid. Do these countries really want local content driven by non-local companies? Just set up a new local company to deliver that content.
 

Crackinjahcs

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There are a few ways to meet the 30% mark from the EU: get licensing for more existing programs from the EU, create more EU based programming, or reduce the amount of non-EU programs in the library available to customers in the EU.

Netflix has been adding more and more international programming and I probably watch more of that than U.S. domestic shows. They have shows produced around the world. Norway, France, Japan, Australia, U.K., South Korea, and more. They also have partner agreements to air shows outside their original regions from countries around the world. --- all without being forced, but instead developing markets and market share in areas they want to expand into.

Coming soon to Netflix.EU - free VPN service
 

dgz

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It's kind of horrible on the surface but what's so bad about pushing companies to give something back to the community?

This is a move of desperation imho. There are 28 different countries in the EU and most of us speak completely different languages. We're kind of like a single entity but not really the same. In oh so many ways. We're not one and it's a problem. Having a handful of US companies exercise control over a significant portion of what most people under 50 watch, listen or read is producing some funny result where people I talk to are concerned and complaining about stupid US events as if they are happening to us.

Having a single entity control most of the media is really bad idea. If I can see it, so can these asshole bureaucrats in Brussels
 

toast0

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I don't necessarily mind some quota, but the 30% local quota (or whatever it was) is pretty dumb, because it makes it impossible for Netflix to have a mostly unified catalog across the EU market, and the EU is supposed to be about unifying markets.
 

Dk975

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I'm in the US, and watch a few European shows on Netflix and they are good, as long as they are dubbed in English. I don't mind watching subs on a 1.5 hour movie. I watch La Casa de Papel, Elite, Babylon Berlin, Rain, and watched a couple of movies out of Spain on Netflix. They get the good shows anyway, and the US gets garbage, SJW junk.
 

dgingeri

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Must be why all those European companies are going bankrupt and all the U.S. companies are pulling out of that market? /s
I sense a little sarcasm from you with this statement, but this is closer to truth than most people think. Every single country in Europe has a shrinking economy, with the most leftist ones sinking the fastest. The only thing that is keeping Europe above water is the stranglehold their richest aristocrats have on the banking systems around the world. That will fall soon.
 

mope54

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Your statement starts off lamenting the all-powerful Netflix juggernaut that demolishes entire industries (except it didn't, at least not directly), and ends with stating that they don't pay out enough to worry about anyway. In between you have some extremely specious reasoning about what industry changes may or may not occur based solely on advertising and some really poor information about Blockbuster. Your conclusions are, historically and currently, wrong. If companies could control consumer behavior to the degree you posit then New Coke would be the drink of choice today and we'd all drive a GM car (biggest advertiser in the world). Instead one of these products is dead and the other is a competitor in a crowded market. In your world, no new restaurant chains would ever rise to prominence, because they can't compete with McDonalds. In the future all restaurants are Taco Bell....oh wait, that's not true either.

What the original poster said is that someone in his small town couldn't produce content without having the ability to distribute it on Netflix. This is wrong, on multiple levels. If you want to talk about specifically producing big-budget content like The Walking Dead, and distributing it to a global market, that's a different discussion.
That's an interesting false dilemma you are constructing to try and bolster your point. There is so much mis-statement posed as fact it's difficult to begin unravelling your misinformation.

You incorrectly assert that Netflix can both demolish industries (disruption of markets is a key component of .coms even though it's not entirely clear that their explosion, contraction, and now run out is/was healthy for the markets they emerge(ed) within) and also imply that pittance licensing terms is somehow related to that reality. Why are you constructing the straw man argument that licensing terms dictate whether a content distributor

Netflix (among other large, global corps) can both demolish local markets while *simultaneously* removing capital from that same local market. That's precisely the dilemma. Royalties into a market do not replace the revenues out from a market or the business model would be unsound.

I don't know your travel experience, but once you dig into developing markets you will find exactly what you think doesn't happen (and it's well-documented since this has been going on since the 70s): McDonald's, Coke, and Nike everywhere. Even in the US, we don't all drink New Coke but roughly half of us drink some Coke *product* (which is the correct way to construct that analogy, btw) and the other half drinks some Pepsi product. Taco Bell, KFC, and Pizza Hut are in every major city I've seen--and they're all owned by Pepsi, Co. (among other corps.). The "local" chains you see rising up are often corporate franchises. There are few rising stars in this economy...name them and you'll run out very quickly and the ones you come up will be disruptors.

As you roam around the world you'll find that a significant portion of the globe drinks a Coke or Pepsi branded water product as their main water consumption. Can you cram an Arrowhead bottle into someone's hand in this scenario? Yeah, sure, nothing I said precludes that from happening. But you're the likelihood of you starting your *own* bottling company, and going anywhere beyond your neighborhood with it, is slim to none regardless of how many streamers you point to on Twitch or Youtube. There is not one single production that even attempts to compete with a major distributor, which is why the examples are, "look at Youtube, they have stuff" rather than, "go to this link and watch this highly rated, self-produced, self-distributed series." The latter doesn't exist. It nearly can't exist given the current market conditions (which people in this thread recognize and argued essentially, oddly, along identical lines that Google is too big for content to get beyond it's shadow...of course, this argument is being deployed against the argument that Netflix is too big for content to get beyond it's shadow so it's thrust is watered down considerably).
 
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