In the present day of “I want it now” with an economy that has made so many things available on demand or at our fingertips, Netflix, the online steaming service, is winning the game. If you don’t have a subscription to Netflix by now, you may be living under a rock. According to the textbook reading, “Questioning Netflix’s Revolutionary Impact: Changes in the Business and Consumption of Television” by Cameron Lindsay and our class notes from Professor Dr. David Diffrient, Netflix had approximately 50 million subscribers in 2014 and today that number has increased to 125 million worldwide, so it’s likely that many of you were Netflix customers before taking this class.
After reading the text by Cameron Lindsay, listening to a podcast by Business Wars entitled “Sudden Death”, and reading a chapter by Gerald Sim titled “Individual Disruptors and Ecomenic Gamechangers: Netflix, New Media, and Neoliberalism,” it is clear why Netflix has managed to not only be number one in online streaming for years but also knock out its competition. Netflix was first to the punch to create a DVD-by-mail service and eventually evolving into an online subscription service for accessing movies, tv shows, documentaries, etc. Before Netflix, the only way to access entertainment was through our television or buy renting movies from stores like Blockbuster.
Netflix and Blockbuster went to blows over the movie rental market and became rivals. Netflix ultimately provided what Blockbuster could not in the end but Blockbuster tried hard to mimic Netflix’s successful business model, even going to the extremes of having their spies visit Netflix distribution centers all over the country. These two companies battled back and forth for years but Netflix was successful for any reasons, the first being that they were 7 years ahead of Blockbuster accessing their audiences via mail and online. Netflix was able to get their movies out to their customers faster and target areas to build distribution centers that showed high demand, capitalizing the market and the customers. Even with Blockbuster copying their sorting machines, website, number of available movies, and their party at the Sundance Film Festival from the prior year, Netflix had a secret weapon which it continues to use today: algorithms. These prediction algorithms are customized towards each customer to not only make sure they received their next selected movie within days of returning their own one but now their website when logging on suggests new titles and shows that are geared specifically to each customers interest. Netflix, which is now creating its own original shows, uses these secret algorithms to predict which shows to create that their viewers will love based on which older films have been popular. Ultimately, Blockbuster did not have the skills for creating these algorithms, as well as appealing to filmmakers who wanted to expand their creative opportunities.
Blockbuster has not been the only competitor for Netflix…Hulu, Walmart DVD-by-mail, YouTube, Amazon Instant Video, iTunes, Google Video, and HBO Go are some of the rivals that CEO Reed Hastings has eliminated or is currently competing with. Even with all of these other online streaming services popping up, Netflix is still on the top. And why? Most likely for the same reason most people don’t even have cable tv anymore. According the Hastings, he wanted to eliminate “dissatisfaction” that viewers have with commercials while having control over what you watch and when. While TV restricts you to view your favorite show on certain days and times, many have opted for online subscriptions but these other online companies usually require you to view an ad or commercial before each episode or show, Netflix does not. Subscription cable channel HBO has since stepped up their game, since TV/cable subscribers have decreased creating HBO Go to access it’s shows whenever, wherever online but only in conjunction with an existing cable service. The only problem is that Netflix has started funding the production of their own original TV shows, similar to HBO, hence becoming an even greater threat to major networks.
On the contrary, Sim points out that these streaming services have developed a symbiotic, mutually beneficial relationship with networks and cable channels. For example, Netflix showcased the past seasons of the show Breaking Bad which 50,000 people binge-watched 24 hrs before the 5th season premiered on AMC and led to 10.3 viewers watching the show’s finale on AMC as well. So as it may seem that online streaming is trying to end TV, perhaps they are trying to work together to create revenue and ratings.
At some point we have all lost a few days of our lives binge-watching in our pajamas and I blame the Netflix original series. Why have these become so popular? They provide “quality” content their viewers want to see rather than limiting the creativity and freedom of the artists/ filmmakers who feel that TV has traditionally put restrictions and guidelines on theircontent. Although these original series have enhanced the Netflix brand and received good reviews from critics, winning many Emmy nominations in the process, they have cost millions to create. This leads me wonder if Netflix will be sustainable in the future while relying solely on the income from user subscriptions to fund these creations. In Cameron Lindsay’s text, she praises Netflix as being the innovator for online streaming but cites that many competitors have started creating their own series as well; warning that if broadcast and cable networks figure out how to stream their content online that’s easy to access, Netflix could be a thing of the past.
Until then…let the binge-watching commence without having to confirm the pop up message “are you still watching?” Of course I’m still watching.