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Netflix Trending Towards TV Episodes

by July 19, 2012
Netflix Trending Towards TV Episodes

Netflix Trending Towards TV Episodes

Netflix seems to be shifting in focus, even while it grows in popularity. Late last year, Netflix had capitalized on the good press that their members had consumed over 2 billion hours of video in the fourth quarter. This June, the company reported, it exceeded (for the first time ever) 1 billion hours of streaming content in a single month. That's about a 50% increase in viewing if that rate keeps up. What's more interesting, however, is the Neilsen data showing the trending of Netflix towards television episodes as opposed to movies. According to Netflix, a full 60% of viewing hours are spent on television shows, compared with 40% for movies. The trend is both expected, in my opinion, and dangerous for their business model. Let me explain why...

When everyone jumped onto Netflix, all of the content was new. As the services popularity grew, and more people became familiar with the service, Netflix expanded into the streaming media market - a place where the company seems to be focusing the majority of its energies. But the majority of its viewership has had ample time now, years later, to have perused and explored the rather dim movie catalogue of older films. Add to that the expiration of contracts such as Starz (which gave them access to movies like Cars, Battle Los Angeles, The Girl with the Dragon Tatoo, etc) and you've got a drop in the popularity of film content. That leaves a pretty hefty sum of TV episodes, which take much longer to consume.

In fact, the recent Nielsen report showed that 19% of those surveyed actually prefer to use Netflix for TV or episodic viewing. Last year, that number was only 8%. Netflix is also being increasingly known for resurrecting fan favorite TV shows like "Arrested Development" as well as delving into original content, like the new "House of Cards," starring Kevin Spacey or "Lillehammer" starring 'The Soprano's' Steven Van Zandt.

So why is this dangerous? Well, for one, Netflix might have an identity crisis. Are they a direct-to-consumer disc company? Are they a streaming media service? Are they a movie studio? With an increasing emphasis on television, they are flying straight into the face of Hulu who, with the exception of CBS and a ton of cableTV channels, seems to be a major player in the quest for dominating the episodic TV streaming market (plus they have access to current shows).

When Netflix started, their focus was on movies. Catalogue TV shows were available via DVD (and later, Blu-ray), but the major push was for movie-watching. Now that market is saturated with Amazon's Video-on-Demand as well as the Apple TV and iTunes services. So why not TV episodes? Well, since Netflix, aside from its original content, has never been focused on first-run series content, it seems unlikely that they could wrestle that away from the likes of Hulu, who already possesses the rights to a significant amount of new shows. If you're paying to stream new content, and you get old thrown in, why not stick with that over a service specializing in only back catalogues?

People are fickle, and moods change quickly. Combining Netflix' identity crisis with the shifting trend towards TV makes for an interesting set of scenarios and it will be interesting watching how the company reacts and adapts to the changing culture and consumer climate. It should be an interesting ride.

About the author:
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Clint Deboer was terminated from Audioholics for misconduct on April 4th, 2014. He no longer represents Audioholics in any fashion.

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