Netflix and YouTube Believe: Bill Gates Was Only Partially Right

16 years ago Microsoft CEO Bill Gates wrote a long article about the future on the Internet. He titled it: Content is King. This was 1996 and the digital world was in its infancy: only 20 million Americans went online regularly (compared to 245 million today) and the most popular websites were AOL (41%), (33%) and Netscape (31%). And so said Gates:

“The television revolution that began half a century ago spawned a number of industries, including the manufacturing of TV sets, but the long-term winners were those who used the medium to deliver information and entertainment.

When it comes to an interactive network such as the Internet, the definition of “content” becomes very wide. For example, computer software is a form of content-an extremely important one, and the one that for Microsoft will remain by far the most important.

But the broad opportunities for most companies involve supplying information or entertainment. No company is too small to participate.”

Fast forward to 2012. Starting this month, YouTube, Netflix, Hulu and Amazon will be rolling out a steady stream of original programming. Netflix will have five original shows by mid-2013, including the highly anticipated “House of Cards” (Producer: David Fincher, Starring: Kevin Spacey) and the new season of “Arrested Development”; Hulu has launched one series and has at least one more in the works; Amazon will follow closely in its steps with content from the Amazon Studios project; By then, YouTube will invest $100 million in launching tens of exclusive channels.

What should we make of this? That Gates was only partially right. Yes, content is important but user-generated-content and TV reruns can only get you so far. The real king is originalcontent. This is true across the board: media companies, educational institutes and enterprises.

Gates was completely right about another statement: “no company is too small to participate.” Take Netflix for example. With exclusive hits like “House of Cards” and “Arrested Development”, the streaming service can expect to grow its customer base beyond the current 23 million subscribers and may even edge out HBO, which has about 28 million subscribers. Who would have thought that was possible only a few years ago?

(Originally publish on Kaltura’s community blog. Photo by: World Economic Forum)

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