The Future of TV vs. Netflix

01Sep11

Photo: Netflix Chief Executive Reed Hastings at a California distribution center. Credit: Randi Lynn Beach / For the LA Times

After a summer spent working at a music festival where there was no television (let alone cable) and spotty internet, the increase in Netflix pricing was the media change that most affected myself and the people I was surrounded by.  Whenever the staff and students and free time, they were often found in the lobby (the one place where the wireless was reliable) watching something on Netflix or Hulu.  Starting this summer, new Netflix members were charged $15.98/ month instead of $9.99 for mailed DVDs and instant streaming (Citation 1).  Though many were miffed about this change, it did not stop them from subscribing, and TV was not missed during the 8-10 weeks.  [What surprised me was that Netflix had not begun ‘registering’ 5 computers like iTunes to minimize password sharing…]

Many wonder whether the use of online streaming sites such as Netflix or Hulu will negatively effect the TV industry.  An August 10th Associated Press article stated that “eight of the nine largest subscription-TV providers in the U.S. lost 195,700 subscribers in the April-to-June quarter…  The loss amounts to 0.2 percent of their 83.2 million video subscribers” (Citation 2).  The United Kingdom and Canada, however, do not predict the same negative outcomes for television (See articles UK and Canada).

Regardless of the numerous opinions about how Netflix may or may not hurt television, they are on the right track for expansion (and eventual world domination, of course!)  Currently, Netflix is only available in the US and Canada, where as of March 31, 2011 they had “23.6 million subscribers, 800,000 of whom were from Canada.”  However, there are plans in place to expand into Latin America (in 43 different countries) (Citation 3).  Netflix is also exploring expanding into Spain and Britian (Citation 4).  Deciding factors include whether the population will pay the subscription fees, if the country has “high broadband Internet participation rates”, popular movies that can legally be licensed, and more.  “South Korea, the Netherlands, Belgium, Luxembourg and the Scandinavian nations” are possibilities (Citation 4).

With ‘international’ Netflix and Hulu starting up in Japan this year (Citation 5), do other online movie streaming/ rental/ purchasing services stand a chance?  –Wal-Mart’s Vudu, Miramax with Facebook, and Warner Brothers Flixster App, for example?

[CHAPTER ONE ANALYSIS*: There are many points in chapter one that are directly relatable to this Netflix exploration.  From the consumer’s standpoint, Netflix is ideal because it is personalized (recommendations), convenient (instant gratification), and participatory (rating and reviewing films.)  The examples of ‘flextime’ for work hours (p. 4) and wanting “flexible customization of products and commodified experiences” (p. 15) as well as the ability to be ” ‘monitorial’: scanning all kinds of news and information sources for the topics that matter to her personally” (p.28) are things the consumer is looking for.  The chapter also talks a lot about the instability and uncertainty of the workforce.  Because of “outsourcing, off-shoring, or sub-contracting work” (p. 1) people are no longer working with and retiring from one company- rather- they are possibly working for “three to four different employers” by the time they are in their “twenties and thirties” (p.11).  “Moving from job to job and place to place in an attempt to secure and sustain a  position somewhere in the middle class” is now common (p. 5).  Because of this constant changing, moving, re-adjusting to new jobs and locations, an easily-accessible-from-anywhere service can be comforting as well as convenient.

The book states that “television viewing worldwide keeps growing steadily” and “the number of televisions per household continues to go up, the number of available channels keeps rising, and so does the average number of hours households reportedly spend watching TV” (p. 38), however, there may be many factors that play into those results.  When a family buys a new TV, the old one may go into a teen’s bedroom.  New TV shows and seasons are on everyday, yet the old catalogue of TV shows and movies still exist and are also re-played (perhaps accounting for some new channels that often play re-runs such as TVLand, Hallmark, etc…)  From a producer’s standpoint, Netflix is extremely efficient, especially the online streaming.  To have another person watch another movie online, there is virtually no marginal cost per unit/ service provided.]

*Page Numbers Are From-
Deuze, Mark. Media Work. Malden, MA: Polity Press, 2007.

-Emmalyn Helge

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One Response to “The Future of TV vs. Netflix”

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