Media company of the decade: Netflix
As we wave goodbye to 2019 - and the 2010s - The Drum editorial team look back at the agencies, brands, people and campaigns that have proven that marketing can change the world. Here we present you with our our media company of the decade, Netflix.
In considering a media brand of the decade, we looked at a shortlist of companies that have in the past 10 years willed into being never-seen-before business models subsequently adopted by their respective industries.
The shortlist was short, and unfortunately dominated by big tech rather than media brands – the 2010s were, after all, a decade defined by digital distribution. If you consider Facebook a media company, it is on the list. Spotify managed to seize listeners from both the indomitable Apple and Napster. But it is Netflix that heralded in a new era of bottomless, bingeable content and takes our top spot.
Netflix redefined what media is – you’d probably rather be watching it than reading this, after all. It has everything you need, be that a thrill or a ‘Netflix and chill’.
Founded in 1997 as a mail-order DVD rental company, Netflix had delivered its billionth DVD by 2007 and, in 2009, when broadband had improved enough, digitized around 1% of its physical stock of 100,000 DVDs and hosted it on a proprietary content recommendation system. The foundations were in place to redefine video, and a decade later Netflix consumption is reportedly at 165m hours a day.
This required a major shift in consumption habits. Chief executive Reed Hastings has previously thanked piracy for driving audiences from linear TV towards digital devices, and subsequently into Netflix’s paid-for and legitimate arms. Many pirates didn’t exclusively seek free content but wanted to download content to chosen devices, while some territories wouldn’t have certain shows for months after they’d premiered – if at all. It’s the reason HBO had to simulcast Game of Thrones globally since no one waits for their favorite shows to cross the pond anymore. This fragmented TV ecosystem was bridged by one-stop-shop torrent sites like The Pirate Bay before Netflix scooped up many early adopters. The Netflix commissioning team has even admitted to looking at torrent analytics to understand media trends and popular shows.
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By 2012, Netflix kicked off a content arms race by funding its Originals – now the lifeblood of any self-respecting streaming service. Originals like Stranger Things, Orange Is The New Black and Bojack Horseman – part of Netflix’s first gilded generation – are only now being wound down. Netflix said that 64 million people viewed the most recent season of Stranger Things, its most-viewed series so far. It also enjoyed a successful run with the Marvel TV universe before Disney placed those rights behind the iron curtain of Disney+. Despite this, it is estimated that Netflix aired nearly 1,500 hours of original series and movies in 2018. Imagine, just a decade earlier, Blockbuster making the same push direct to DVD, skipping cinema or TV. You can’t, right? Yet Netflix has roped in Scorsese, De Niro, Pesci and Pacino for its latest original offering, The Irishman.
Of course, content has its cost. The weary expression ‘content is king’ could more accurately read ‘content costs a king’s ransom’. Netflix has accumulated billions of dollars of debt in order to dominate the subscription video-on-demand space. It was so far ahead of the game that Disney, Apple, HBO and NBC are only now launching their own bespoke services.
At the start of 2019, Netflix had 139 million paying members worldwide – 29 million more than a year before – but growth is slowing as it approaches a likely plateau of 150 million. It claims to already account for 10% of TV viewing time in the United States, but will be hungrily eying a larger chunk in the hope of avoiding that ceiling.
Commissioning chief content officer Ted Sarandos has stated he’s looking for shows that can “tap into the global zeitgeist”. Will it be able to secure such talent amid fiercer competition from tech and broadcast giants? Hastings has said Netflix’s goal is to “compete so broadly” that no new player could fully match it. In 2017, he said “sleep” is Netflix’s main competitor – a boastful claim that there are not enough hours in the day to keep up with its output. Maybe in 2020 he’ll be more concerned with Disney.
The model that made Netflix special has become standard, adopted by video distributors the world over. But there is a key differentiator that can sustain Netflix’s lead – data. While it experiments with interactive media formats (like Black Mirror’s Bandersnatch), it accumulates years of insight from users. This could serve as a north star when commissioning new shows, understanding user tastes and designing UI going forward.