Within a spectacularly short time, Netflix not only took the world of entertainment by storm but also redefined it, creating the biggest shift in it in decades. The entertainment media moguls – Disney, Comcast, and AT&T – are just left to gape in wonder at the recalibration of the media universe caused by the company that has been in it for only six years. Although the development of the media business has always been steady and forward moving, people have not witnessed in the last forty or fifty years such a drastic change as that brought about by Netflix. Media giants were surprised to learn that their time-honoured business model on which the pay-TV business had always been based is not the best and not the most lucrative one. The new direct-to-customer approach taken by Netflix is proving to be a more promising venue to customers’ hearts than the business-to-business model always upheld by cable television companies. Awed by Netflix’s dazzling success, media giants are now seeking to reinvent themselves.
Netflix has indeed revolutionized the television-viewing experience on many levels. It has transferred television from a coaxial cable to the internet which allowed viewers to pay less for the services, watch movies and shows of their choice, regardless of whether they were still on the air, listen to fewer advertisements, and stream entire seasons of their favourite movie serials in rapid succession. Netflix’s movie library is so rich, especially in its American branch, and is so coveted by people in 190 countries that they constantly search for ways to get VPN for free in order to bypass the company’s geographical restrictions and its ban of VPNs themselves. Netflix has also rewritten the rules of making movie deals when it launched its original series, the House of Cards, a political thriller starring Kevin Spacey that was on air for six seasons. The company has also introduced innovations in TV scheduling and marketing campaigns. Netflix’s addresses to its subscribers are marked by a highly casual tone that creates an impression as if it is talking to its close friends or family members.
Nor has Netflix been afraid of showing its humorous, if still highly creative, side. After learning that its users were falling asleep while watching its shows, it designed the Netflix Socks project, a smart socks accessory that uses an accelerometer to detect when users are starting to nod off. Once it catches viewers drowsing, the accelerometer sends a signal to their television and poses the show mindful of not causing them the disappointment of waking up several episodes ahead of where they stopped watching. Such heartfelt attention to their customers has certainly paid off. Now Netflix is attending to the needs of 56 million US subscribers and 130 million of them around the world. The company also outshines the media moguls because of the low prices it asks for its services. While cable television companies monthly charge their users $100 and fees and taxes to boot, Netflix offers packages for $8 or maximum $20 per month and asks from its users no accompanying fees for subscribing or terminating its services.
In the wake of Netflix’s grandiose success, the media giants have also started talking about cutting cords with the traditional television. Many of them have even taken steps toward putting their words into actions. Comcast, an American telecommunication conglomerate, has signed an agreement with Amazon to add its Prime Video to the online content which customers can access through its Xfinity X1 services. In accordance with the deal between the two companies, Amazon’s original content has joined such services as YouTube, Pandora, Tubi, and Netflix, also available through Xfinity. The Prime Video application on X1 offers full access to content available to Prime members, including NFL football games along with movies and TV shows brought through Amazon. Comcast users can also watch more than 150 Amazon Prime Channels, among which are Starz, PBS Kids, and Showtime. Both parties are expected to win from the deal. It is the first time when Amazon cooperates with US pay-TV service to offer Amazon Prime Video. Thanks to the partnership with Amazon, Comcast adds another dimension to its services, in effect moving, at least in part, from cable television to digital streaming.
Threatened by the life-changing developments in the entertainment world, Disney, too, has recently announced the creation of two streaming services. One is designed to stream sports programming from ESPN: hockey, tennis, baseball, and other sports. According to the company’s plan, viewers will watch more than 10,000 sports events a year. The second service is built to stream Disney, Marvel, Lucasfilm, and Pixar shows and movies; it is powered by BamTech, a little-known technology company. Here, viewers will be able to watch such impatiently expected movies as a sequel to Frozen, Toy Story 4, and a live-action version of the Lion King, rights to which Netflix will lose, due to Disney’s intention to keep them for its new streaming services. All other deals with Netflix will not be renewed either. Disney also plans to invest in original movies and shows for its streaming services, which will have no advertisements.
Other cable companies follow suit and turn to stream services in an attempt to avoid an existential crisis. As Netflix has proven to all media companies, a shift to the internet is a necessary step for TV networks to take if they want to continue exerting influence on their users.