Attack of the Streaming: Netflix Challenges Traditional TV With Original Content



The Appetizer

Streaming giant Netflix has officially put its hat into the original content arena and outright challenged traditional tv with the announcement of its first content development agreements. Netfix entered the industry as a DVD mail order rental company.  Over the years, they have continued to expand, placing a heavy focus on streaming services instead of physical dvds.  Initially, the move was consider risky and they saw a decrease in support– at first.  Then their subscriber based started to grow again, as did their stock.  Then they announced their latest venture- getting into the development of original content.  But not just any original content, but episodic original content.  One of the first that was announced was their revival of the cult-loved comedic series Arrested Development.  Then they announced the american version of House of Cards.  Other series were announced, and with the shows, as well as the stars and teams behind them, it was clear that Netflix was taking their approach very seriously.  But that was not enough.  In addition to the development of original content, they also chose to change the traditional release schedule.  Known as “binge” watching, when a viewer watches a large amount of episodes, or an entire series, in one sitting, Netflix chose to use this strategy instead of releasing new episodes weekly or daily, the strategy that has been traditionally used by television and cable networks.  The result?  For the first time in the history of television, the internet streamed shows were nominated for Academy awards.  In addition, Netflix was even recognized by Breaking Bad creator, Vince Gilligan, whose show ran on a competing network, AMC, during his speech after winning an Emmy as being a primary reason for his show’s success.  The result of  all of this- toward the end of 2013, Netflix announced deals with Disney/Marvel and Dreamworks for exclusive shows- and of course their subscriber base is increasing too.  And it is just the beginning.

The Main Course


The Dessert

Netflix is not the first video internet-streaming entity to produce original content.   Around the same time Netflix was making its original content announcements, so was Amazon and Hulu (not including the deals Youtube has with content creators as well). However, it is the one that, for argument’s sake, is the most notable because Netflix made the world start to look at internet content differently and take it more seriously.  Traditionally, if a show was released over an internet streaming network of sorts, there was a sort of stigma behind it, such as no matter how well produced it was that it wasn’t a REAL show/quality content because it was not on one of the traditional networks/distribution channels.  Netflix changed that.  Before, it would be far fetched to fathom a show distributed over Hulu or YouTube to be nominated for an Academy Award against shows like Grey’s Anatomy, Modern Family, or Breaking Bad.  But with House of Cards and Arrested Development both receiving Academy Awared recognition, is it that far fetched now?  Is it possible that we may see a Youtube distributed tv show nominated in coming years?  Possibly.  If that happens, there are several changes that may come along as well.  When it comes to awards ceremonies, will they allow for internet distributed shows to be in the same category as traditional distributed shows, or will they make them their own (in some cases this already exist, but again, those are not taken as seriously).

Disregard awards shows- how about viewing habits?  Traditional television, particularly cable, have had “binge” marathons for shows for years, but they are usually repeats and considered special events.  However, with the success that Netflix is having, there have been some entities that are paying attention and have in fact released new episodes in a “binge” programming schedule.  Will we see more of this?

The impact may go deeper, though, and it starts to fall into legalities and government policies.  Again, Netflix is streamed over the internet.  Cable operators, such as Time Warner, Charter, and most notably Comcast, these days, in addition to providing cable television services to their customers, also provide internet packages as well.  Netflix, and companies like them, in essence are borrowing the lines and their streaming capabilities that these cable providers incur expense on- without having to pay the providers anything for them thanks to policies put in place by watch agencies such as the FCC.  However, the Net Neutrality policy has been placed in question recently after Comcast won a case against them in which they were accused of intentionally decreasing the quality of service for a set of customers who were using a peer-to-peer site.  Based on the Net Neutrality policy, they are not allowed to do that- all customers are suppose to be provided the same internet experience over the carrier’s service regardless of the site they are on.  If the Net Neutrality policy is kicked aside as it is, then that could mean a company such as Comcast could charge not only companies such as Netflix for better streaming quality over their networks, but also charge customers who want to receive better streaming quality on their end.  What may they provide as an alternative- in the case of Comcast, Xfinity, aka, their own internet tv streaming service.  They would have the right to raise the cost of using a service such as Netflix to a price point due to the cost to get a reasonable stream (so ultimately, they would not be charging viewers access to Netflix, but for the distribution channel that Netflix is carried over) high enough that it may make a potential subscriber think twice and instead choose to use the more cheaper, packaged version of internet tv streaming services- the cable providers’ service.

This is where Netfix’s reliance on original content becomes so important, because they know if that happens, it will not be the Netflix brand/service that makes people want subscribe to them, but the exclusive content that they carry.  Let us not forget that Netflix is a subscriber based entity (for now), and therefore does not rely on advertisements.  The question becomes then, what if it changes its model if the expense becomes too great and in an effort to expand their user base (such as Hulu), they move to an advertising model–>  How much more will that effect traditional television if that approach is chosen?

The Overall Meal

5 Stars

The Doggybag

Do you think that services like Netflix will ultimately take away a sizeable audience from traditional providers and become a standard television “channel”  for viewers?

Please place your response below. Let the convos begin!

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