Six years ago, I had just subscribed to NetfIix and wrote a column for MediaPost explaining why I thought it had potential to be the best thing ever.
I ended my article with the following:
“So far, Netflix hasn't had any impact on our regular television viewing, but it has cut sharply into our pay-per-view movie and DVD viewing. I think it's the first thing that's actually cut into my son's videogame playing We like the basic platform so much, that if and when Netflix does strike more content deals for top TV shows and movies, and has more original series, it will probably have a much bigger impact on our TV viewing -- especially in the summer.
"The company has the right model, and seems to have hit that rare chord with kids, teens, and their parents.”
Spending an extraordinary amount of money on programming -- reportedly $5 billion in 2015 and $6 billion in 2016 and 2017 -- has helped Netflix become hugely popular.
One reason Netflix continues to grow and thrive, aside from spending a significant amount on programming, is that it does not have the same constraints as ad-supported networks.
It does not need to worry about average minute ratings or audience flow. We’ve seen time and again a broadcast or cable network unsuccessfully try to air an excellent program that does not fit in with the bulk of its lineup. While reach is considered for media planning, the only things that really matter for ad-supported network programming decisions are average ratings and rankings among artificially constructed age groups, such as adults 18-49 and 25-54.
Netflix does not need to worry about demos.
It doesn’t care about adults 18-49 or 18-34. A 60-year-old has just as much value to Netflix as a 25-year-old. Netflix wants “Longmire” and “Grace and Frankie” to appeal to different viewers than “Orange is the New Black,” “Daredevil” or “Dark Mirror.” Reach matters much more to Netflix than average audience.
That’s how you get and sustain subscribers at this price point. When the broadcast networks are in repeats, and there’s nothing I want to watch on cable, there’s always something I can find on Netflix.
Disney’s decision to shift its movies, including “Star Wars” and Marvel properties, to its own upcoming OTT service should not have much impact on Netflix. While nice to have, Netflix’s success and subscriber base are driven by original content far more than theatrical movies or other acquired series. (Netflix’s new deal with Shonda Rhimes is potentially much more significant.)
But there is one more thing that makes Netflix rise above all it streaming competitors. Love.
While not a scientific analysis, every time I have a conversation with someone about the topic, they invariably say at some point, “I love Netflix.” They might like Hulu, Amazon Prime, CBS All Access and others, and they might love some of their specific series, but I seldom hear anyone say they love the other streaming services.
Most people who have just one streaming service they regularly watch have Netflix. Most people who have more than one streaming service had Netflix first and then added others. Netflix has become a foundational part of their viewing experience -- even if they only watch a couple of series a month.
Finally, the broadcast networks should see Netflix as the potential ally it is.
As an example, my wife and I have been wanting to watch NBC’s comedy, “The Good Place,” but were too busy last season to add it to our DVR queue. We just discovered it on Netflix, binge-watched the first season over three nights, and now are watching Season Two on NBC.
The networks should promote new shows from last year as being available for binge-watching on Netflix (and other streaming services) before the new season starts.
Netflix is still the best thing ever.