Is it time for TV to abdicate the throne? Netflix aims to snatch the crown
From its humble origins as a domestic US DVD rental business 20 years ago, Netflix has become a pioneering success story of the internet age. It currently boasts 86 million worldwide subscribers, which include going from zero to five million British households in four years per Ofcom and BARB figures.
Netflix aims to snatch TV’s crown
The ascendancy of the company’s digital on-demand subscription TV service has been supported by its commitment to producing quality, original programmes, like hit shows ‘Stranger Things’ and ‘Orange is the New Black’. The company has high hopes for its newest offering, ‘The Crown’, with its estimated £100m product budget to drive more subscribers.
So, it’s very fitting that on the same week that television is celebrating the 80th anniversary of its first live broadcast, the launch of Netflix's latest royal mini-series has reignited debates and speculation around whether traditional television is on its deathbed.
Are consumers really making a decisive move away from linear TV and adopting on-demand instead? Will Netflix’s original content and other streaming services takeover as people’s viewing habits change with today’s mobile and video-first world? Is it really time for TV to abdicate the throne to streaming services?
In short, no, or at least, not yet. Traditional television still accounts for 76% of our viewing consumption, despite the fact that four of every five people in the UK subscribes to at least one streaming service. Even though we know that millennials prefer watching video on new media like Netflix, YouTube or Snapchat, television has proven to be incredibly resilient, particularly when we break it down by hours spent watching. Recent research from Thinkbox demonstrated that the average person in the UK will spend 3h 29min watching traditional television per day, but only 11 minutes on subscription video on demand services like Netflix or Amazon Prime.
However, the popularity of online video services will continue to thrive in today's digital world, especially among a younger generation used to consuming video content online through a variety of devices. Despite television’s enduring appeal, the direction of user travel clearly favours on-demand streaming. As technology and viewing patterns continue to evolve, it will be agile companies like Netflix that are better able to address the changing behaviour of viewers.
In fact, while the company is notoriously guarded about its viewing numbers, ratings estimates for its original programs illustrate that Netflix has quickly become a capable competitor to primetime broadcast television. For example, the US season four premiere of ‘Orange is the New Black’ was estimated to have an audience of 6.7 million people by viewer-monitoring firm Nielsen, while an average episode of ABC's ‘Modern Family’ garners a state-side audience of nearly 10 million people. Netflix has not necessarily revolutionised user’s viewing habits, but it's certainly been added to their ‘to-watch list’.
What this means is that the battle between traditional television and digital on-demand is much more complex than a simple case of new media outlets overtaking the traditional. Television will continue to play a strong role in the video ecosystem. Meanwhile, Netflix faces serious challenges over its dependencies on movies and TV series its users love that still must be licensed by the major TV companies.
The launch of ‘The Crown’ is less about who will reign supreme, and perhaps more an indication that there is a clear changing of the guard, where are entering an era where television has become just another screen in today’s mobile and video-first world.
Moz Dee is co-founder of Contented Group