Anyone who has watched the series House of Cards would know that it is a compelling example of high quality content designed specifically for television (and even smaller screens).

Fewer would be aware that it was developed by and for Netflix, and that it represented part of our inexorable journey towards a Zero Marginal Cost Society.

About the same time that House of Cards was being produced, a number of Industry Super Funds were undertaking a similar journey, but unfortunately for their millions of members, the quality of execution (and subsequent outcome) could not have been more different.


Netflix produced House of Cards (and has continued to develop other series such as Marco Polo) for the simple reason that the deployment of the capital was an integral part of their strategy to disintermediate incumbent vendors and consequently drive down the marginal cost of streaming video content to a global audience.

By producing their own shows (even at considerable expense), they drove the marginal cost of streaming House of Cards down to zero, which in turns supports their pricing structure, where customers can consume unlimited amounts of content for just $10.00 per month.

The alternative (and previous model) was to rely on the balance sheet / P&L of incumbent Hollywood studios, who – because of their attachment to historical cost – were inherently less efficient.

As a consequence of the quality of their execution Netflix is redefining the cost structure of the video content industry.


Superpartners was a similar (but ill-fated) attempt by a number of Industry Super Funds to disintermediate incumbent administration platforms by developing their own solution. If successful it would have permitted the Funds to drive down the cost of member administration (I doubt they would ever have been able to envision Zero Marginal Cost).

After spending hundreds of million of dollars of members’ retirement savings on development, they eventually threw in the towel and the business and technology was handed over to incumbent vendor Link Group.


As an example of IT governance (and governance more generally), Superpartners is simply woeful, and the Funds involved (while not yet realising it) have effectively abdicated their future role in the management of Australia’s superannuation assets.

That role will now be taken over by market entrants whose execution will be far more comparable to Netflix, and as a consequence the cost structure of the asset management industry will fall by 70-90% over the coming years, which is exactly the same deflation as between Foxtel’s (old) pricing structure and that now offered by Netflix in Australia.