Netflix’s Disruption of the TV Industry
Netflix is probably the most dominant company in the on-demand media industry. It has 151 million paying subscribers around the world.
It has also created a compelling original programming while analyzing its user data to serve subscribers better. But most importantly, it allows users to consume content the way they prefer.
Needless to say, Netflix disrupted the television industry and forced cable companies to change the way they do business.
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Netflix is basically where content is stored, with movies, documentaries, and television series stored within the service, both pre-existing and its own.
Subscribers can consume any program any time on any device they prefer, for a fee.
As of the time of writing, it has three tiers of monthly subscription fees: basic plan, HD-quality service, and premium plan.
How Netflix Started
In 1997, Netflix started as a website that let people rent DVDs online. They received the DVDs by mail and returned them the same way.
From the start, it competed with the networks and cable for entertainment time. However, its real competition at the time was the brick-and-mortar video rental business.
Until 2007, internet speeds weren’t fast enough. After that, personal computers got powerful enough to let streaming services take off commercially. Netflix started its streaming service that year.
Customers were able to watch a TV or a movie on a computer, TV screen, tablet, phone, or even a gaming device.
And they were able to watch what they wanted any time and however they wanted it. They didn’t have to worry about schedule or commercials. They didn’t even have to go out of their homes.
And that last item killed the video rental business. Eventually, cable companies and TV networks started offering on-demand content of their own.
In 2013, Netflix started producing original content of their own. This was a risky and expensive proposition.
That was also a time when the network generally approved shows based on pilots that reached certain metrics. Netflix offered series producers and show-runners upfront contracts to create a whole season or two.
Eventually, many of the critically acclaimed and talked-about new series came out on Netflix instead of the traditional and established networks.
And because it has created a loyal fan base, the original content has been key to the company’s success. It also brought about the appreciation of its stock.
Netflix also started uploading entire seasons of established TV series at once. This essentially created the binge-watching trend. Also, the trend comes in stark contrast to broadcast and cable TV’s installment model.
More importantly, Netflix’s production methods have compelled TV networks to be more flexible and more aggressive in recruiting and retaining top talent.
Staying on Top
After the disruptive innovation that Netflix brought, it continued and focused on mining for user data. This activity initially served to customers and helped them find content that would appeal to them.
But now Netflix analyzes such data to determine which genres and which talents it should go for in response to demand.
But it faces tough competition for programming and viewers. Its rivals come in the form of Amazon, Disney, and Google, among others.
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