Is There A Qualitative Moat?

Arguably Netflix has a few moats, with innovation being their biggest, but the fight to maintain them is happening in real-time, so how long will they last?

Brand moat
- They are known as the company that turned Blockbuster into a museum (there is only 1 Blockbuster B&M still open in Bend, Oregon)
- 'Netflix and Chill' has various meanings and not as widely used as 10 years ago
Switching moat
- Netflix makes original content and has one of the largest and most diverse catalogs to choose from. Switch and you lose access. Harder to do if you are already invested in a new show or one of your favorites to rewatch is only on their platform.
Networking moat
- There is an inherently social aspect to entertainment, so watching the top show in the US today makes you part of the club and gives you another thing to talk about with the people around you
Barrier to Entry
- There is licensing as well as network and infrastructure requirements (there is a reason the only ones to join the TV/film streaming service industry have been billion-dollar companies)
Innovation moat
- Since their original innovative debut with mail-in DVD rentals, Netflix has led the way with ad-free online streaming, multiple device streaming, custom profiles with tailored recommendations, original content (House of Cards in 2013), and single-household use. The only streaming service innovation they didn't implement first was off-line downloads, credited to Amazon.
- Netflix has over 1800 patents worldwide, covering a wide range of technologies used in their streaming service, including content delivery, recommendations, and user interface. 1568 have been granted. Of these 1106 patents, more than 88% patents are active. A large portion of Netflix's patents relate to how they store, retrieve, and deliver content, which includes technologies for content delivery networks and streaming infrastructure. Another significant area is content recommendations, where Netflix holds patents for various algorithms.