When it comes to traditional television we have networks such as ABC’s and NBS that rely on the “live” audience when it comes to having some of their shows viewed. Late night talk shows rely on this as well as the obvious, Saturday Night Live. Traditional television also has the challenge of keeping their audience with them as a one hour show will have twenty minutes work of commercials. With Netflix it doesn’t have to deal with these hassles. There are no commercials, Netflix is able to get their revenue off of subscriptions to their streaming services. Since there is no live audience to keep engaged week after week, Netflix can give out the entire season instantly and “binge-watching” takes place. It allows the audience to not have to wait for new content week after week and they do not have to sit through endless advertisements. They do not need to worry about advertising revenue since they get it from subscriptions and placed ad’s in the content. This makes Netflix a powerhouse when it comes to media companies because there is an understanding that today’s modern audience does not have time or patience to sit around waiting for more content. They have options to skip the ad’s with technologies such as TiVo or they can save it and watch it later which is known as time-shifting, and Netflix is a key source for this time shifting because they can go back to the show and watch it at their own pace.
Some of the competitors that have fought with Netflix for audiences and subscriptions are big names such as Blockbuster and HBO. Blockbuster was always following Netflix from moving on from walk-in stores to going online. However, they were just copycats and did not have the support to compete with Netflix in a meaningful way. HBO was a competitor as well. From Cameron Lindsey’s article, Reed Hastings, one of the creators of Netflix called the rivalry between HBO and Netflix to be “like the Yankees and the Red Sox” (Lindsey, 176). Netflix streams multiple shows and movies from other companies, however they do not have any from HBO because they have their own streaming service of their own original content as well as shows and movies from other companies. What makes Netflix stand out in the end however is the accessibility that Netflix has. It can be streamed from almost any technological device, and when you even buy new computers, sometimes Netflix already has a shortcut on their desktop.
Some advantages that Netflix has over it’s competitors have been listed already such as no advertisements, easy access, a “no wait” availability for the audience, however there could be some reasons as to why Netflix could come crashing down. One example is the idea that Netflix will be co-opted by it’s competitors and they can use their own power to beat Netflix “at it’s own game” (Lindsey, 178). Another problem that can lay ahead is the expansion of the company means that the expenses are also going to be larger, and the subscriptions might not be able to be one of the main sources of revenue for Netflix. They could go for the option of raising the subscription price, however it will come to a point where the price will be too much and consumers will look to other media distribution sites.
One of the biggest eye openers is the idea that Netflix claims that it allows democracy when it comes to creating content because there is less stress than being on a live programming station where certain values have to be adhered and certain ideas and words cannot be said or mentioned. So while there is more freedom in that aspect for Netflix, it is not as democratic or autonomous as it appears to be and I will use the example that Gerald Sim highlights in his own article. House of Cards was based off of a BBC drama that featured Kevin Spacey. Netflix analysts looked at the subscriber behavior and the connections between different shows and genres to come up with what would be a big hit show. House of Cards is then based off of the BBC drama with the use of the actor Kevin Spacey because of consumer habits on Netflix. Nothing that is recommended to you was recommended by accident because there is an algorithm that tracks what you like and what you will likely enjoy next. This keeps you grounded in the site as well because you are continuously offered content that you enjoy.