Welcome back to Forests Over Trees, your weekly tech strategy newsletter. It’s time to zoom-out, connect dots, and (try to) predict the future.
Netflix wants to be Disney... but better
I grew up on Disney.
All I knew were Disney cartoons and DCOMs.
And my first time at Disney World, I’m told that I made my grandfather ride “Goofy’s Barnstormer” at least a dozen times in a row.
So it’s hard to hate on Netflix for being a Disney fanboy too.
But with their most recent announcement, I thought they were taking the fandom a little too far…
What Netflix Announced
According to The Verge, they’re opening new in-person experiences (Netflix Houses) in Dallas and Pennsylvania in 2025, which will have “regularly updated immersive experiences” and “unique food and drink offerings”.
I’m sorry – what!?
You’re winning the streaming wars. Why are you trying to be Disney?
But after some deeper thinking, it’s finally starting to make some sense.
So let me run it past you.
Why Netflix Houses Are A Good Idea
A virtuous cycle
Netflix Houses will reinforce “the main thing” aka the streaming business.
Just as selling rollercoaster rides, Mickey Mouse ears, and expensive pretzels at Disney World makes us more likely to foam at the mouth for the next Moana movie, Netflix can enjoy the same streaming boost by bringing characters to life.
Plus, we’ve all heard ad nauseam about out-of-control content costs for Netflix and the other streamers… maybe if they invest more in nurturing communities and expanding audiences for their existing IP, they can spend less time and money churning out new content!
So Netflix still wants to drive the same flywheel, but with more emphasis on the nurturing and expanding.
Nurturing community will mean giving the nerdiest superfans a place to belong. And equipping them with shirts and mugs and secret handshakes to help spread the word when they get back home.
When those superfans talk about visiting the Netflix House, or where they got that cool shirt, the word of mouth starts to help with audience expansion.
Scale baby, scale!
This is where Netflix starts to separate itself from Disney.
Think about the size of these experiences. Disney World in Orlando takes up a ridiculously large 27,000 acres. The big, bold new Netflix House will be 2 acres.
Think about the speed to build. Shanghai’s Disneyland took 5 years to build. For Netflix, it’s less than 2 years.
Because Netflix can move quicker and build smaller, they’ll be able to scale in-person experiences much more quickly than Disney.
Also, let me call your attention to a few of the most popular rides at Shanghai’s Disneyland – Pirates of the Caribbean and Peter Pan…
So while Disney is exporting a single, homogenized set of IP globally, Netflix can do quite the opposite.
I expect them to quickly spring-up houses all over the place, lean into the most popular shows in each local market, and nurture communities to grow those audiences.
This is a Test
As a final reason this is a good idea… this whole plan is just a test!
At first, I saw the two-store nature of the plan as an issue – too small to have any real impact. With that lens on, I couldn’t shake the feeling that it was a distraction. That they were wasting their time.
But given everything we just talked about… driving the flywheel, scaling quickly, and creating locally relevant experiences… iterating a smaller experiment first makes a ton of sense.
Wrapping Up
In summary, I’m quickly becoming a fanboy of Netflix.
Sure, I’ve written passionately before about how they should embrace live sports, and they listened (were way ahead of me)…
But this feels riskier and bolder than that. Building IRL is very different from building software.
So I’m excited to keep watching here and see how the in-person experiment plays out.
Bonus Bullets
Quote of the Week
“Never be limited by other people's limited imaginations.”
— Mae Jemison, NASA Astronaut
Quick News Reactions
Figma is launching new stuff – I’m interested to see how folks react to these features (new UI, presentation tool, etc), and whether Figma has picked the right moment to expand their product line. The trade-off is that they start to lose their primary superpower – focus. It’s the reason Adobe wanted to buy them back in 2022, so I’d argue that staying focused and preventing “product creep” might be the better path here.
Vision (Semi) Pro – Apple will apparently be down-leveling the capabilities and improving pricing/access for the next versions of their VR products. Maybe this is a reaction to Meta’s Ray Bans (very simple/affordable in comparison) doing so well, or a reaction to weak Vision Pro sales, or a combination… But I’m still excited about this space (and glad to have Apple’s product quality raising the bar for everyone else).
Upwork jobs are down — I’m not surprised to see this data that freelance jobs are down for things that AI and LLMs can now do pretty well (coding, writing, customer service). It’s consistent with the dynamic happening in tech more broadly… As anyone looking for tech jobs will tell you, it’s a tough time for job-hunting.