Netflix: The Game Changer

Technology is changing which in turn has completely revamped our society and the way television and its programs are being watched.  People are increasingly turning to the Internet, and using tablets, phones and most importantly computers to stream their TV shows.  TV analysts say that innovations such as YouTube, Netflix and Hulu have changed the way we watch and think about television (Mayer) and Netflix has found a creative way to appeal to audiences and penetrate the television industry. 

While most companies have dared not to dip their toes in the muddy water of Internet streaming, Netflix has found its niche in the market.  The company recently admitted to looking through illegal torrent sites in order to inform its legal programming and what to air and stream (Guffre).  According to news organizations such as BBC, The Huffington Post and Wired, these pirated sites are no longer the enemy, but are free market research for Netflix as a company (Guffre).

In a move that will hopefully set them up for success in the future, Netflix recently brought its concerns about net neutrality meeting with the Federal Communications Commission and their staff.  Netflix recently agreed to pay these fees to companies like Comcast and Verizon to ensue that voids are streamed and delivered smoothly, but they argue that it weakens the principle of net neutrality, which says all Internet traffic should be treated equally (Selyukh).

In 2013, Netflix as a company garnered 14 Emmy nominations including one for outstanding drama series for the political thriller House of Cards.  House of Cards follows Kevin Spacey as Francis Underwood and his wife Claire, played by Robin Wright Penn through their political dramas and deception in Washington D.C. 

Furthermore, Netflix also bought the rights to FOX’s Arrested Development and debuted the entire season online for viewers to “marathon stream.”  This buyout cost Netflix around $45 million dollars but was looked at as a very insightful marketing strategy, with Netflix targeting the online community that was already present, rather than trying to compete with the original audience from the Fox broadcasts. 

In  2014, Netflix began expanding in Europe, spending $400 million to do so and also will be investing in more Netflix original series, similar to House of Cards and Orange is the New Black.  Business analysts attribute these two things to Netflix’s continued evolution and growth as a company.  As a company, Netflix is extremely open to this evolution and will be the first to admit to the flaws in their business model in the beginning.  Specifically, the Business Insider states, “Around three years ago, Netflix realized it had a problem: It was paying large sums to license other people’s content — TV shows and movies produced by other companies — in order to then show them to you, the Netflix subscriber, at home. This initially proved successful, but there were two troubling aspects to this model: 1) It left Netflix very vulnerable to competition, since the shows and movies it licensed could, theoretically, be licensed by anyone willing to outbid them, and 2) the most popular TV shows, episodic dramas like “CSI” and sitcoms like “The Big Bang Theory,” were already being sold for huge deals into syndication at basic cable channels like TBS and USA (Morbito).” 

In another creative move to the top, Netflix also found through its own viewer data that people binge watch serial dramas such as Breaking Bad or Lost.   Thus, Netflix created House of Cards and Orange is the New Black.  Viewers aren’t tuning in at the same time anymore, a result of an increasing number of streaming shows on network websites at their leisure (Mayer).  The shows Netflix creates allow people to watch when they have a free day and don’t have to commit to a certain timeslot each night or week in order to view. Self-made shows are good for Netflix’s budget as well.  If they are able to create their own shows instead of buying programs through syndication, then as a company, they will end up being able to control the price of what people are watching (Bushey).

Through a series of power moves, dynamic marketing decisions, and a little thinking outside of the box, Netflix has been able to penetrate the television industry using tactics that have never been thought of before.  With the constant evolution and open range of technological advancements, it is hard to say how Netflix will alter the television industry again.  But, if I had to put money on it, I would say Netflix will do whatever it takes to stay at that top. 

Works Cited

Bushey, Ryan.  “How The $400 Million Loan Netflix Just Took Out Will Help To

            Undercut Hollywood.” Business Insider.  5 Feburary 2014.  Web. 2 May 2014.

Guffre, Liz. “Netflix: New Media in New Spaces.”  Metro: 179 (2014): p.126-127. Web.

            2 May 2014.  

Mayer, Andre.  “TV at 75: How HBO and Netflix Are Forcing Networks to Evolve.” 

            CBCNews.  30 April 2014.  Web. 2 May 2014.

Morabito, Andrea.  “Netflix’s House of Cards Makes Emmy History.”  Broadcasting

            and Cable: 143.27 (2013): p.18-19.  Web. 2 May 2014.

Selyukh, Alina. “Netflix Takes Net Neutrality Fight Straight To The Top.”  The

            Huffington Post. 2 May 2014. Web. 2 May 2014.