When you ask people what they like to watch on television, most of the time they will tell you “shows that are either available on Netflix or are a Netflix original show.” Netflix has taken the world by storm, gained millions of subscribers and has no intentions of stopping. But with other networks trailing close behind, could Netflix finally come to an end?
What people might not know is that Netflix was founded in 1997, when Marc Randolph and Reed Hastings got together and started the company as the world’s first online DVD rental store. At the start of Netflix’s history, Blockbuster was the main way to rent movies, with locations all over the United States. Blockbuster had millions of customers, but was heading towards bankruptcy. The CEO of Blockbuster, John Antioco, arrived at the Sundance Film Festival in 2007, in order to try to find a solution between Hastings and himself. Hastings claimed that Netflix had better technology, could run an online service better than Blockbuster. But Blockbuster had more subscribers than Netflix at the time. Hastings offered to buy subscribers from Antioco.
Flash-forward to today: Netflix is leading the pack when it comes to television. By 2014, Netflix’s subscriber base had grown to a total of 57.4 million and now reaches more than 118 million subscribers. The reason Netflix remains on top and appears to be winning over other television networks is that when the company first started out, the DVD-by-mail service had a very quick turn around. Compared to Wal-Mart and Blockbuster, Netflix had a faster turn around time to quickly get DVDs to your house. Blockbuster had a DVD-by-mail service, which a customer could return at any of their locations, but the company was losing money on each transaction. Wal-Mart’s DVDs service failed, or had some hiccups, in part because it recommended the move Planet of the Apes to users looking for films related to Black History Month (which the company later apologized for).
In today’s market many viewers prefer to see zero advertisements but still want to watch network and cable content. In order for this to be accomplished, viewers download programs illegally or find some way to watch the show in a kind of “black market.” Netflix lands on top because of the fact they can show television programs that first debuted on cable, but now the viewer can enjoy their favorite films without any interruptions. By having Netflix’s content uploaded in one area, a consumer no longer has to record any programs from cable, or use DVRs or VOD. Also, since the programs are listed by seasons and episodes the viewer can now binge-watch all their shows/episodes in one sitting if they want to. Since today’s world always seems to be “on the move,” Netflix is usually preloaded on mobile devices such as phones, tablets and laptops, which the costumer just has to log in with their user name. Gerald Sim, author of the essay “Individual Disruptors and Economic Gamechangers: Netflix, New Media, and Neoliberalism,” claims, “Audiences today can call the shots on what they watch, when they watch it, and how. Mobile platforms and lowered price points have additionally led to rapid market penetration by devices such a tablets and smartphones. Consumers are not only able to time-shift; they are also unbound to living rooms or desktops.”
Although Netflix is current at the top, several networks are closing in behind it. Netflix’s rivals are Amazon Prime, Hulu and HBO Now. While Amazon Prime has a lower monthly rate for customers, customers still have to pay additionally to watch certain programs. HBO however, just lunched a subscription where consumers don’t have to have cable and can just pay for the month-to-month HBO app. HBO lunched their “HBO Now” & “HBO GO” that allows viewers to watch cable programming, documentaries, and live streaming. The downside of HBO’s new apps is that they only have certain shows and those aren’t preloaded to different devices. Netflix also devotes 70% of their total funds to buying new content. The company spent $1.3 million dollars per episode on The Walking Dead because the company doesn’t own the rights. If the prices keep going up for programs, Netflix could be left with only its original Netflix content.