Posted on May 04, 2022Read on

How Web 3.0 Could Save Netflix

Netflix could gain the long term battle in the entertainment industry if it adopts a web 3.0 decentralised production house logic. @luismcsoul


I just saw an ingenious meme in which someone used the logo of Blockbuster and changed the title (while keeping the typography) to Netflix.

It is obvious to everyone that the current business model of Netflix is unsustainable. The last financial report for the first quarter of 2022, confirms that the company lost 200,000 subscribers.

The business model worked until the point where we were all in a lockdown and the company was still growing its audience overseas at a relatively fast pace. Unfortunately the expansion has slowed down and the company got squeezed by competitors. Two big companies have a competitive advantage in two complementary areas: Disney, offering movies from already acquired production houses, and Amazon, being a cloud provider itself. They could leverage those expenses significantly while Netflix, on the other hand, needs to shoulder them.

Three steps to redirect the company towards a solution:

  1. To progressively reduce the renting from other production houses until reaching zero rental expenses.
  2. To copy YouTube's technique: run advertisements and get paid (also) to remove them.
  3. Amplify exponentially the original content.


This third step can be done in a traditional way but it could also be done embracing a decentralised (Web3.0) production house logic: transforming Netflix into a platform ‘antithesis’ of Disney:

a. Pay in royalties to everyone in the production line of a movie/series/video game. Nobody would be able to waive this right.

  • Standardise percentage retributions for developing every step of the process, from writing a clear logline, a compelling first page, to reviewing it, to approving it, to setting up the story boards… the posters, online ads, etc.
  • Pay revenue commission to people traditionally marginally objectivized in the industry: guards, cleaning personnel, background extras, etc. Up until this point some actors still get paid millions in residuals while others just received a one time payment, once in their lives, a long time ago.

b. Streamline production by sequencing steps, something that today is done in separated platforms like, Open ScreenPlay and Webtoons.

  • Embrace public ledgers (blockchain) to track the contributions of every professional to the different projects under development. Expedite the completion of tasks and ensure quality control. Something similar to the additions of programmers in GitHub.
  • Incorporate a system of litigations and fast settlements when editing, something normal in audiovisual productions, is needed.

c. Take advantage of professional remote online workers. Create value for people during the production process itself while turning towards independent creators.

  • Create a payroll platform in which any professional suitable for the job in any part of the world would be able to contribute and get paid.
  • Adopt cryptocurrency for global payments.
  • Be completely transparent regarding the number of views and revenue originated by each film or series released and its consequent royalties to the contributors.

d. Embrace a holistic approach: gamification and merchandising.

  • The emphasis of Netflix should be franchise development. Netflix should study formulas like Pokemon and take further advantage of the growing trend of gamification: characters to be incorporated into multiverses.
  • Merchandise. One example: The series Demon Slayer, it captures the attention of young teenagers, like my own daughter. She watches the show in Netflix, checks what other GachaTubers (YouTube) have been saying as “reactions” to the series, plays a related Roblox game and buys merchandising/toys via Lazada (a local subsidiary of Alibaba) and printed t-shirts in Uniqlo. Therefore Netflix should be aware of this holistic process and look forward to the integration of these income streams into a platform.


This model would transform the company ‘inside-out’, engaging people in a public/transparent production process, totally the opposite of the secrecy and bureaucracy of traditional studios. It would also allow Netflix to reduce the amount of money put upfront to develop content and help to focus instead on content curatorship and quality assurance. Most importantly, this vision will set a plan for the company towards leading the future of entertainment management.

The deal with creators is like this: if you have the talent, the time and the equipment, you should invest in one project that you find meaningful to you. Once your contribution is approved, your payment will be determined by the success of the final product, with the advantage of potential endless passive income as long as the movie, game, toy, etc. continues to generate revenue. In the worst case scenario you will have grown your personal portfolio and your contributions will be displayed as evidence of your career path.



(Directing Creative Teams Towards Multiverses)