The textbook that I’ve assigned for my online Evaluating Contemporary Television course, The Netflix Effect: Technology and Entertainment in the 21st Century, features fifteen chapters written by media experts, historians, and cultural practitioners. The first two chapters that I’ve asked my students to read are: Cameron Lindsey’s “Questioning Netflix’s Revolutionary Impact: Changes in the Business and Consumption of Television” and Gerald Sim’s “Individual Disruptors and Economic Gamechangers: Netflix, New Media, and Neoliberalism.”

Netflix Netflix Effect

Additionally, I’ve encouraged my students to listen to the first episode of the Podcast Business Wars, which concerns the battle between Netflix and Blockbuster. That 30-minute podcast episode — the first of eight in the “Netflix vs. Blockbuster” series — is entitled “Sudden Death,” and introduces us to some of the main players (including John Antioco and Reed Hastings) in the much-publicized wrangling between two media companies struggling for dominance in the competitive field of online entertainment.

Netflix Business Wars

Here is a link to that episode:

https://art19.com/shows/business-wars?page=4

Together, those readings and the podcast address some of the reasons why Netflix has succeeded while many of its competitors, most notably Blockbuster, have failed.

I’ve asked my students to think about the advantages that this online streaming service has over its competitors (and vice-versa), as well as some of the problems that lay ahead.

SOME QUESTIONS TO CONSIDER:

  • Is Netflix’s business model sustainable for the foreseeable future?
  • What kinds of suggestions does Cameron Lindsey make if the company is to fully embrace or exploit the “democratizing” and “monetizing” potential of new media?
  • Why, according to Gerald Sim, might words like “democratizing” actually obscure our understanding of the transactional relationship between Netflix and its customers/subscribers?
  • Which other expressions, appearing in many reports about Netflix’s disruption of existing production and distribution structures, does Sim single out as being problematic?
  • In what ways has the streaming service — far from bringing about the “demise” of the television industry — developed a symbiotic, mutually beneficial relationship with older networks and cable channels?
  • Do you believe that Netflix liberates digitally enabled audiences from older/restrictive/linear types of cultural consumption? Or do you think that such liberationist discourse is premature and short-sighted, failing to acknowledge how an abundance of “consumer niche choices” ironically contributes to the creation of neoliberal subjects for whom “democracy” is simply synonymous with the free market?

As you can see, these two chapters give us much to mull over. I look forward to reading your responses!

 

2 thoughts on “Disruptor? Gamechanger? Some Initial Questions about the “Netflix Effect”

  1. After reading the pieces by Lindsey and Sim, as well as listening to the podcast Business Wars, the success of Netflix, as well as the potential stumbling blocks, has become much clearer. Netflix’s willingness to listen to its customers and adapt based on their feedback seems to have aided in their success. Where other businesses, especially Blockbuster – as seen in the podcast – seemed to take a cockier approach – thinking they were too big to fail and knowing what their customer base wanted – Netflix took a more interactive approach, changing their business model based on what their customers wanted. With this being said, Netflix’s model is being adapted by competitors, many of whom are doing things that Netflix is not, such as promoting a more interactive model, trading the occasional advertisement for more up-to-date programming, or even providing free streaming services (with varying levels of legality). Lindsey discusses the necessity of adaptation and growth for Netflix if the company wishes to stay relevant. Even though Netflix is devoting a substantial amount of resources to new, critically-acclaimed programming, Lindsey and Sim show the ways in which this may not be enough. Netflix promoted a new model for watching shows, and while, originally, this was groundbreaking, it must continue to be innovative if it wishes to remain on the forefront of the digital wave of viewing.
    In terms of Netflix remaining relevant, Lindsey proposes some changes. One, though potentially risky, is to be more active in the production of its original series’. Shows like House of Cards were massively successful and well-received, but the rights do not belong to Netflix. This not only forces them to pay to stream the show, but also removes the option of letting other streaming services pay the company for streaming rights. The risk here, though, is that if a show fails to produce a substantial viewership, Netflix would lose much more money. Another – mentioned briefly above – is to create a more interactive website, one where viewers can create a discussion with other viewers, thus increasing interest and promoting a more active viewing experience. Lindsey discusses a positive experience with viewing Breaking Bad on a website that cultivated a more interactive environment for the viewers, allowing himself and others to be more active in the way one may be with a reading group as opposed to reading a book by oneself. Lindsey also stresses the importance of Netflix continuing to create new, quality content. Lindsey shows that if Netflix becomes complacent in their production of new shows, other sites that have followed a similar model could easily overtake them by producing original, quality content of their own.
    Netflix, while on one hand being a competitor to traditional networks and cable channels, also has a symbiotic relationship with some of them. Netflix must pay the networks to play shows on the website, which creates revenue for the networks. Aside from this more obvious method of symbiosis, Sim shows that Netflix can also help to hype shows currently on networks or cable channels. Sim relates a prominent example with Breaking Bad, explainging how the show both benefitted Netflix by helping the company obtain more subscribers, but also helped AMC, the cable channel that aired Breaking Bad. By allowing subscribers to watch previous seasons of the show, Netflix increased the viewership of the show, leading to 10.3 million viewers of the finale – a 56 percent increase of the show’s previous viewer record, according to Sim. This is one example – likely of many – that proves while Netflix is a competitor of networks and cable channels, it also has the ability to bolster the viewership of shows still on the air, leading to increased interest in a show, and therefore, increasing interest of programs on traditional television.
    Netflix, while something of a norm now, was clearly a groundbreaking business, changing the way in which people watched television. While the business could easily fall prey to the pitfalls of similar businesses before them, the constant innovation and progression shows the company’s willingness to adapt, and if Netflix continues to be on the forefront of the industry, it will no doubt be around for a long time to come.

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  2. Why did Netflix become so successful in the wake of other movie businesses like Blockbuster? Because they were prepared and ahead of the game. One advantage that Blockbuster had over Netflix was it had stores that were filled with movies for its customers to pick up themselves, whereas Netflix customers could only wait for their DVDs to show up in the mail. However, even with this perceived advantage, Blockbuster failed. The most likely reason for Blockbuster’s failure was its business model to begin with, where most of its profits came from late fees. Netflix likely had a greater appeal because it never charged late fees because of its subscription model, which is very convenient for users.

    Another reason why Netflix is so successful is because it doesn’t have advertisements. In a culture where advertisements are seen as an annoyance, a subscription to a business that has a plethora of legal, ad-free movies and television shows would be appealing. Another advantage that Netflix has over cable is the amount of control users are given when it comes to choosing what to watch. Gerald Sim discusses how with cable, people had to wait for it to come on TV, wait through ads, and then wait for the next episode to come out a week later. Netflix got rid of the waiting (especially through ads) aspect that cable and other movie streaming companies, like Hulu still have.

    Netflix may face challenges regarding net neutrality changes and increasing costs for licensing, both of which may result in an increase of subscription charges to customers, but this will likely not be well received by the subscribers. Also, Netflix doesn’t offer some of the perks that cable TV has, like sports programs or the most recent episodes of many popular shows. Netflix has definitely paved the way for other television companies to provide alternative ways of viewing, but ultimately, Netflix has the potential to be out competed by companies who offer more. I think if Netflix wants to remain at the top, they are going to have to do more than create new “Netflix Originals.”

    However, even with the success of these shows, I think that Netflix will still be a popular movie streaming site and will continue to thrive. I think that the illusion of democracy of these sites is synonymous with the free-market, where all the sites are simply trying to be the most competitive and attract the most people. I think it is necessary to address that some people may have subscriptions to multiple streaming sites and that a person’s viewing isn’t restricted to just Netflix or just Amazon Prime. I personally have subscriptions to Netflix, Hulu, and Amazon Prime. Having multiple subscriptions allows for users to enjoy the shows that one site doesn’t have and still have the benefit of less ads and pay less than what it would cost for cable.

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