As Netflix overtakes HBO in the subscriber stakes, we look to the streaming giant’s past…and to its future.
The media industry is one of the most fiercely competitive industries in the world, and with the developments of modern technology, piracy and copyright is hard to keep on top of. Audiences want content fast without leaving their homes; luckily enough, there’s an answer: online streaming. This service provides hundreds of movies and TV series at the touch of a button, all for a small subscription fee. There are a variety of options to choose from of course, but one in particular is on a meteoric rise and continues to grow worldwide: Netflix.
The impact of streaming is difficult to ignore – you only have to venture through your local high street to notice the change
Since its inception in 1997 (yes, 16 years ago), the Netflix model has continued to grow and change. This adaptability was crucial to its success and ultimately led to globalisation. The impact on the media market is a difficult one to ignore – you only have to venture through your local high street or shopping centre to notice the change. It may be damaging to the traditional British high street, but in the current economic climate, customers want value for money. When you’re a student or unemployed and strapped for cash, paying £6 a month for over 200 titles easily trumps buying four DVDs for 20 quid from HMV.
The biggest challenge for Netflix, though, is the ongoing battle against illegal downloading. There have been several attempts to thwart torrents by the streaming giant, including showing the highly anticipated final season of Breaking Bad only hours after airing in the US. These tireless efforts are futile to many who clearly don’t mind getting a strongly worded letter from their service provider on a monthly basis.
In a bid to increase its number of subscribers, Netflix’s next business venture would prove to be its biggest yet: original programming. House of Cards, Hemlock Grove, Lilyhammer, Arrested Development and Orange Is The New Black would be produced by Netflix and streamed in their entirety in 2012/13. This decision showed Netflix’s integrity and it proved that Netflix was ready to compete with the best in the business, propelling it into competition with some of the biggest subscription-based networks in the US.
HBO creates great television, but Netflix has variety, hundreds of television shows available at the touch a button
One opponent in particular is the cable giant HBO, which has prided itself on original programming for almost 20 years – it’s truly the undisputed king of drama (The Sopranos, The Wire, Six Feet Under, Game of Thrones). The idea of another company coming along and defeating America’s gold standard subscription-based network seems ludicrous, but if any company could do it, it’s Netflix, and recently it’s done exactly that. Netflix knocked HBO off the perch and pushed past 30 million subscribers in the US alone. So what does that suggest?
HBO does create great television, that’s indisputable. But Netflix has variety. The several contracts Netflix has in place means it not only shows content it’s produced, but it gets to show hundreds of television shows from a variety of different networks, with thousands of episodes available at the touch of a button. This assortment of content contributes greatly to its popularity; it’s how it differs from HBO so greatly. It goes back to the original point: value for money. HBO has been outshone by Netflix this year, but if HBO can continue to create original content, there’ll always be demand for it. HBO’s reputation is too great to feel the damage after a single defeat, but it may have to alter its business model to compete in the future.
HBO isn’t the only company to suffer at the hands of the streaming giant. The recent announcement of Blockbuster Video stores around Britain closing down due to poor sales is partly due to the impact of online streaming providers. Children’s channel Cartoon Network among others recently reported poor ratings, blaming Netflix’s Kids content.
For Netflix, the future only holds more content, from original programming to original movies
It seems the old days of going to your local video shop for the newest releases or rifling through the bargain bin for pre-owned DVDs are well and truly dead. The truth is, it’s hard to revel in the majesty of such a brilliant service when so many other companies are suffering because of it – but that’s business and, unfortunately, that’s the media industry. Netflix will remain headstrong and uncompromising and it has to be that way for the business to continue to grow.
For Netflix, the future only holds more content, from stand-up comedy specials to documentaries, and the original programming it continues to invest in (so much so that Netflix has recently announced that a fifth of its budget will be spent on original programming next year, doubling 2013’s budget). Netflix is also moving into original movies, taking the brand onto the big screen. Will production companies and movie distribution companies crumble in its wake? Will Netflix be the new place to go for producers and filmmakers? Will Netflix replicate its success in the UK and overtake Sky subscribers? Only time will tell, but judging from its past, no company is unassailable.
Featured image: AMC
Inset images: Netflix; Netflix