Netflix is Upon Us (Part Two)

(Source: blog.vpn.asia)

Shortly before Netflix went global in September 2015, Reed Hastings was interviewed by CNBC's Mad Money host Jim Cramer about the success and future of Netflix, of which he had this to say.

The full interview can be seen here. 

What is Internet TV?

Internet TV can best be defined as the opposite of linear TV. According to definedterm.com, linear TV is a term used to describe television 
that is broadcast in real-time and in sequence. Therefore, non-linear TV i.e. internet TV is identified as television that ‘covers all on-demand programming, which is available to view at any time the user decides and is so not constrained by real-time broadcast schedules’ (source: definedterm.com).

Moreover, as stated in Netflix’s Long Term View on Netflix’s Investor Relations webpage, Netflix describes internet TV as being on-demand, personalised and portable such that it is accessible on most platforms, as opposed to linear TV which can often only be accessed through an actual television. 

Furthermore, it compares the flexibility of contemporary internet TV with the rigidness of linear TV such that the latter limits the viewer’s freedom of space and time by restricting him/her to a specific time and place.  Consequently, Netflix argues that internet TV will soon replace linear TV as the primary global television model, bringing up the analogy of how linear TV essentially took over radio and telegraph companies as the main source of content when the technology became available at the time (source:ir.netflix.com).

The company also attributed the growth of internet TV to three main points. These are: 

• Ecosystem Growth: The Internet is getting faster and more reliable, while penetration of smart TVs and adapters is also rising.

• Freedom and Flexibility: Consumers can watch content on demand, on any screen, and the experience is personalized to individual tastes.

• Rapid Innovation: Internet TV apps have frequent improvement updates and streaming is the primary source of UHD 4K video content (source:ir.netflix.com).

Therefore, it can be argued that the industry’s landscape, as well as consumer preferences, are changing. For example, in a consumer research study published in Ofcom’s 2015 Communications Market Report, studies have shown that 33% of its UK participants have stated that they were engaging more with free online catch-up TV and VoD services more than they did the year before. 

Moreover, the same report has found that numerous television broadcasters have launched and/or developed new streaming services to support their businesses within the last three years, as can be seen in the image below. 



(Source: Ofcom Market Communications Report 2015)

On the other hand, Reed Hastings has also stated that the future of the company lies in the development of it original content (source: businessinsider.com); such that plans to release 31 new and returning original programmes, 24 feature films and documentaries, as well as 30 children’s programmes, and stand-up comedy specials (sources: media.netflix.com; businessinsider.com).

This is arguably due to the changing nature of traditional television broadcasters and their relationship to online SVoDs such as Netflix. One reason behind this development could potentially be due to the growing competition between different online streaming services e.g. Amazon Prime and Netflix and between traditional media and cable companies, such that each party struggles to attract and retain audiences' attention.

For example, in a BBC news article published in Oct 2015, media analysts argue that "Content companies like HBO and Disney are realising that old business models no longer make sense'' and that  ''...in the digital era, they can have a direct relationship with the consumer'. Consequently, traditional pay TV and television cable companies are utilising new media technologies to adapt to contemporary audience demand and viewing habits in order to increase their own profits (source: BBC.co.uk).

For example, The Walt Disney Company has recently launched their new online multi-media streaming service Disney Life, in which subscribers gain unlimited access to a library of Disney animated films, music, applications, ebooks, etc.

Disney Life Advertisement.

Another example would be the launch of YouTube Red, a subscription service alongside YouTube's already-free service that enables subscribers an 'amplified video and music experience across YouTube'. Such as watching Ad-free videos and more significantly, accessing YouTube Red Originals, i.e. exclusive original content starring famous YouTubers such as Pewdiepie and Lilly Singh. Nevertheless, YouTube Red is currently only available in the US and has been launched for less than a year now (source: support.google.com). 

The question I find interesting is, what happens if YouTube Red  spreads across the globe like its predecessor Netflix just did and reaches Saudi?

Surely, 'the world's most avid watchers of youTube' must mean something...
Also, YouTube's intellectual law policy states that content creators MCNs i.e. companies as big and prolific in their region as Uturn and Telfaz 11, for example, get their own share of revenues and are the rightful owners of their own content and intellectual property.

Therefore, if Youtube Red was to come to Saudi and join with either Uturn, Telfaz, etc. they could potentially co-operate in the production of exclusive content, so that Saudi viewers and viewers across the MENA region would subscribe to the service....

I don't see why not :)