EP 21 - Business Disruption and Transformation: Lessons from Netflix and the Insurance Industry
Disruption isn’t about innovation alone. It’s about structure, ownership, and the courage to redefine value chains.
In this Episode:
Francois Jacquemin and Neil Wirasinha explore business disruption and transformation through the lens of Netflix and the insurance industry. Lessons on ownership, platforms, and leadership in complex ecosystems.
In conversation with Neil Wirasinha, we explored how Netflix transformed the film industry not simply through technology, but through the clarity of ownership.
By controlling both creation and distribution, Netflix removed the intermediaries that had constrained studios for decades. It didn’t just digitize movies; it rewrote the business model.
The results speak for themselves. With more than 300 million subscribers worldwide, Netflix operates a direct, recurring revenue system that maximizes data, personalization, and efficiency. In contrast, traditional film studios still depend on cinema chains that retain half of the box office revenues and control much of the customer relationship.
Neil and I discussed how this structure mirrors the challenges faced in insurance and other legacy sectors.
Insurers often operate across competing channels, agents, brokers, and digital platforms, each vying for relevance and control. Inside large organizations, internal “tribes” sometimes compete with each other, testing direct models while defending traditional ones.
It’s not so different from Hollywood studios experimenting with streaming while still protecting cinema releases. The tension remains the same: balancing transformation with legacy, innovation with stability.
Our conversation returned to a central theme: ownership.
Netflix knew exactly what it owned: its data, its audience, its distribution. That alignment gave it speed and confidence. Many insurers, however, are still fragmented across systems, subsidiaries, and silos.
Transformation doesn’t begin with technology. It begins with alignment, understanding where value lives, who controls it, and who gets to evolve it.
Disruption, in any industry, is ultimately a leadership question.
It’s not about predicting the next wave, but about structuring yourself so you can ride it without losing balance.
Timecode:
00:00 Introduction: Competing with Streaming Giants
00:12 Breaking Down the Numbers: Netflix vs. Movie Studios
01:21 The Economics of Movie Production
03:12 Marketing Strategies: Netflix vs. Traditional Studios
05:30 Disney's Hybrid Model and Market Impact
07:26 New Entrants and Industry Disruption
07:53 Parallels in the Insurance Industry
09:50 The Role of Failure in Entertainment and Insurance
12:03 Conclusion: Adapting to Survive
Francois Links:
Apple Podcast
Guest:
Neil Wirasinha:https://www.linkedin.com/in/neilwirasinha
Transcript:
Neil: Oh,
Francois: wow. It's you, you said, you know, at home or going to the movies, you have Netflix, but you have zillions of those. There's Disney and you know, How do you fight with that, you know?
Neil: it's, it's, Netflix is an amazing organization, but when you look at, I'm gonna start with the numbers, right? I'll start with the numbers and try and break it down because to, to a lot of people, you're going, I'm gonna watch a movie tonight, right? So the currency is, I wanna watch a movie. So it's either pre-planned trip out to go to a cinema, or I'm gonna sell my sofa and watch a movie. And to the consumer, they're the same product, but they are far from the same product in how they're created, right? One, which is Netflix. It's a subscription model. Obviously over 300 million subscribers worldwide, lowest subscription. Pakistan, where it's like a dollar five highest subscription charges Switzerland, where it's over $30. Um, and, and, and, and so if they have 30, uh, 300 million subscribers and they own the distribution network, they, they own the platform. And then if you look at the amount of money that they generate, including advertising services, it's around about $39 billion a year. That's what Netflix earns, right? Consumers don't care about that. But when you look at how a movie studio operates and there, there's a blend of, uh, major studios, mini majors, and, uh, indies. Um, they're competing for a much smaller share. They're competing actually for about $30 billion of, of box office sales versus Netflix at 39 billion. But when you take the $30 billion and break it down. The studio doesn't earn that money because it doesn't own the distribution platform. Exactly. The cinema chain does. Right. And the cinema chains are different. You can go in the uk you can go
Francois: so the 30 billion, they covered income for the studio and for the Cinema
Neil: Correct. That's the tickets. That's the global box office. So that could be an amazing cinema with beautiful lighting, sound and screen and great beverage options, which you have to pay more for in snacks.Right. Um, or it could be, or it could be a really aging cinema, uh, in somewhere in Europe where, you know, there it is. It is only open certain hours
Francois: And no one is in the salary. You know, you just need Good.
Neil: that. And that's it. Yeah.
Francois: terrible.
Neil: so, so the so, so really when you look at that 30 billion, half of it goes to the, to to, to the platform, to the cinema and the chains, because they're typically in, they're typically in downtown locations to be part of a city center, or they're shopping malls.Yeah. As, as, as, as venues that are more of a destination.
Francois: like they do Right. in Dubai nowadays. It's
Neil: Exactly.
Francois: So it's like commodity. It becomes a commodity.
Neil: without a doubt. So now you've got all of the studios aiming for $15 billion of, of income because half of it has gone to the cinema chain groups. So now you've got very competitive situation where you are all trying your best to get to $15 billion of income.But here's the problem, right? When you think about the consumer thinks, well, it's the same product if you look at how you put that cake together, right? So to speak, Netflix, average cost of of, of making a movie is less than $30 million, $35 million. Yes, of course they have some that cost way in excess of that.And they also have some that sit
Francois: why is it cheaper than the others?
Neil: It's because they, they will already turn things around with less movie stars.They're shooting Using a lot more technology, a lot more ai.
Francois: So when they know the distribution, they own the distribution, they own
Neil: So they know the value of putting a product through the, their own internal
Francois: So they need to be less broad. They just,do something that is totally focused
Neil: it can be a, yeah, it's a numbers game. So they will create a product that fits their store, and some of those products need to have more investment behind in terms of production, because it's used to grow subscribers and other parts of that product are there to maintain subscribers.So they create a product that fits their shelf. So when you think about the marketing they need to do for something that's going into their own store where they have all of these subscribers already, their marketing costs are significantly lower. They can be as low as $2 million and stretch as high as $15
Francois: Because when you open Netflix, you can see the Exactly. I mean, The algorithm will choose. one for you, Which is different.for me or for Exactly. whoever.
Neil: I mean, they do have some hero placements of this movie's opening now, I think, which helps, which really helps. But then for a movie studio, they're still trying to create fine art already.
They're fighting for less than half of what's available on the table, but they're essentially thinking, how do we make this movie be the best movie it can? And depending on, again, a movie studio will make a, a portfolio of movies. Like any business, it has to balance the risk and make a portfolio. But some of those movies can cost, you know, 10, 15, $20 million.If it's a genre movie, like a horror movie, or if it's a really big blockbuster or complex movie, it can cost over $150 million to make
Francois: that's Disney. Right? if I, if I, if I, there is, there there are the studios and there.is Netflix, but in the middle there's Disney that is asis only little Netflix.So you can subscribe. But I personally, but they also have those super blockbuster movies that bring one to 2 billion for release. The Avengers was them,right?
Neil: The Avengers. I mean they, they created that cinematic universe to exactly help launch their own products. I think they self criticize themselves as well, which is we maybe made our films too accessible. Uh, and maybe we did too many of them because then you can't forget the fans and consumers. typically. It's not, it's the same person that's going to, like a film fan is about 20% of the population of a country.It's not a, it's not a hundred percent. There is definitely a good proportion of people that never go to the right? There are more people that you can reach at home. So I think that you've got Disney that is a hybrid, that to part of it, Disney plus definitely serves a need. Um, but the movies, the movie making, the, the movie going model, the movie making model, uh, hasn't shifted quick enough that, that those, you know, those Avengers type movies, um, cost know well in excess of a hundred million dollars to make.Um, and then you've made the film, but then you think, well, we've got a distribution platform in Disney Plus, but let's not make it available at the same time as it being in cinemas. We have to respect the window, as they call it. It's called the window for for income.
Francois: See, It's interesting, isn't it? how studios are reacting or there's the new entrant that disturb disrupts the whole industry and some of them will just react differently. Disney has a certain Way. And they're only, the only ones Huh? they,
Neil: there were more in there,
Francois: Amazon is also entering it. They, it was different. I, I I feel Amazon is different. They they were, uh, not at all in the movies, but you know, they have clients and they thought, oh, my God, let's make things available for them. And oh my God, let's buy, a studio. we have so much money. we can do that. So there's plenty of different strategies to, to, to get in there. But the bottom line is there is a lot of disruption and changes in industry. And, and it's about survival. so super, super high competition. What, what I see in insurance is uh, is, is also similar.I mean, the ecosystem is,is, quite, it's probably more diverse in a sense, right? And that is many, many different players.So more diverse, maybe every movie is different. So if we can take, every movie is different. You can also have something like that in the, in the ecosystem. So you have a lot of, uh, different, I mean, there's regulation, there is, uh, there's a lot of things that, that create borders or it's more local in terms of. of disruption, but there's big chunk of disruption. And even insurance companies, they say, okay, what do we have? I mean, there's some companies, that agencies, do we work with independent distribution or not. Then independent distribution. In some countries they're very powerful, in other countries, less powerful. Um, but, but there is, there is a lot of movement, and willingness, to drive for each of the, of the, of the segment of the distribution value chain to try to, to survive and to, to keep on growing. So we say how, how, to, how to, how to fight against that. Insurers have said, okay, we have agents now we, we work with brokers because we need to work with them. They're, they're also very powerful clients want to work with brokers. They have value as well in the whole. ecosystem. But at the same time, they, they do that. They say, oh yeah, know we're gonna work with independent distribution, but now we're also going to have our own direct distribution. not With agents And they come with new ideas and, and it's not even doing themselves. They have subsidiaries doing it. So you spoke about contradiction earlier. You know, which part of the ecosystem are we playing in? Well, We play a bit in this one a bit. In this one. And You have tribes inside big groups that say, oh, we compete against each other. And actually it, it is competition. Sometimes it's even different product or different systems. It's testing the water, see what works best. But It's about survival, isn't it? It's, it's always about, trying to get its space.
Neil: I think that, yeah, it's competition and survival. You know, the, the, the, the, the part of the same conversation always, I think for, for when, when you start to look at Netflix, they're, they're in, they're in, they're so big. They're the number one player when it comes to, comes to streaming. They're gonna have the same pressures, right. The, the shareholders and the share price denotes that they have to chase growth. Right. And the, and, and they will have to evolve to chase that growth. The, the, the more legacy movie studios that are still making very expensive movies. Okay. They've managed to balance portfolios. Uh, unfortunately they're not taking as many creative risks because it's easier to make a film that sits in the same franchise or has the same tropes as a franchise as they've done before, because they can understand the risk reward model that little or better. But, but failure's a big part of taking product out in the entertainment game. And when you fail hard, everybody sees it. And I've never known the, the podcast in the entertainment business. Probably some of the meanest podcasts I've, I've, I've ever listened to because they, they really enjoy the failure.They rarely celebrate the successes, but they celebrate some of the failures of movies. And I've worked on movies like cats, so I really understand some of that failure. Right.
Francois: What movie Yeah, exactly.
Neil: yeah. Good. Thank you. It made me repeat it. That's painful twice. Um, but it's, but it's really interesting that, because it's been always put up on the biggest screen.In the headlines and a lot, and it's cultural. You know, movies are a cultural moment and a marketing campaigns are trying to convince people that don't miss out on this cultural moment. It becomes more difficult and because people want to be part of a cultural moment because it's fresh and original or it's so well done.I mean, bond has a great legacy because it ups the stakes and ups the game each time. I, I dunno where it's gonna go to next. And as the producers have changed
Francois: I'm not James Bond. No, I'm not the, I'm not the next one. I,
Neil: there you go. There's the announcement of the day. Yeah. But it's, but it's a challenge. But when you've, and people, and you've, you've a lot of engineering bias businesses, data-driven businesses, certainly got the social media platforms.Certainly talk about this culture of failure and, and fail fast and see what you've learned.It's really difficult in the entertainment space when you've. It's taken seven years, five years to come up with the idea and another two or three years to get that idea into a product to then launch it and it fails.It's pretty hard. And it's not just the filmmakers involved, it's all the people in the marketing teams, in the agencies, and all of those, you know, uh, adjacent businesses. They fail with you. And it's hard, really hard. And I think it'd be nice for the successes to be celebrated a little bit more. So the failures just, uh, feel just that, that little bit less abrasive. But failure was failure, like in the insurance game.
Francois: Um, Well, failure is inherent to the game So, um, you can, you can have, uh, a lot of growth, success and, and the bottom line is suffering. You can have an Amazing product that would work perfectly in bottom line. But, you don't sell one single one. Um,so there, there's, there's a lot of, uh.you know,uh, there's A lot of example, but you know, in terms of fail fast, I think insurance, has the ability to test much better. What works, what doesn't work. You can see, uh, an insurance company is, is with a catalog of product. You think this maybe 10, 10, 20 products, but actually there's so many products, so many different products, uh, and some, some of products, they, they, they sold two or three times, but is a vari variety. This just like a you know, an optional. Product uh, next to another one With a different option Yeah, Than different options So you can tweak the product little bit to change them and to make them much more. um, attractive to the market. So, and that, that's something that you work, um, with distribution focus group to, to, to see, to see that. Uh, but, uh, yeah, if you look at the, at the system of insurance companies, they have um, a very few product, with, you know, enormous amount of, of, of client and a long string of product with very few very few
Neil: product right?
Francois: So the fail fast uh, is, is, is, is working, it's inherent to the business because it's, it's built in So a scenario that will be tested by, by, by, uh, by the whole value chain. Um, but usually it's the product, department, the market management and or other, you know. Do those more laboratory, uh, that, that, that can use that.