Netflix Becoming a Threat to Television?

Netflix

Ten years ago, the battle of television shows was between the major networks including NBC, ABC, etc. and premium channels such as HBO and Showtime. With Netflix among other online video services having a greater focus on television over the last several years, it seems the competitive threat to modern home viewing is becoming one between traditional cable and streaming.

It all started in 2012. Netflix revealed that it would bring a show called Lilyhammer to the airwaves featuring Sopranos alum Steve Van Zandt. No, it wasn’t an instant hit, but what the gangster-themed television show did was open the world up to episodic television through the internet instead of the cable box, creating a new golden age of television that competes with the production quality of premium channels and might very well surpass it.

At the time, few people thought it would kick off; however, in today’s television market, no one can deny the power of streaming content. Netflix originals such as Orange is the New Black, House of Cards and more have changed the way in which society watches their television (or computer for that matter).

The question is, considering the emergence of this technology, what does it mean for traditional cable? Will it bite the dust or will it continue to strive? Eventually it isn’t beyond the realm of possibility for the medium to fade away; however, that time is not now.

It’s true, cable numbers are dwindling. All of the major cable companies including Time Warner Cable, Cablevision Systems and Comcast have decreased extensively since Netflix’s introduction on the scene in 2004. Approximately 305,000 households cut their Comcast subscription last year for example. On the flip side, broadband subscribers increased over 2.6 million last year. That’s quite a differential between the two mediums.

While still more successful than Netflix currently, premium channels are taking a hit as well. Over the last 18 months, HBO, Showtime, Starz and more have declined six percent, whereas Netflix, Hulu and Amazon Prime rose four percent, thus becoming a greater threat to their television counterparts. Currently there is a 32 to 27 percent difference between the two services, a number that is getting closer and closer.

One of the primary reasons of course is that Netflix as well as other services have become a total package, featuring an endless amount of television and movies for a cheaper cost. The latter is the key to why people are switching over. Cable depending on what package a customer has is a minimum of $50 per month with an upwards of $150 per month. Netflix, Hulu and other services only cost a customer between $8 and $16 per month. That’s a big difference and is why people are switching over.

The one thing though that these streaming services don’t have is sports and other such live television. Sports arguably is one of the more popular of the television genres in today’s viewing world. However, none of these outlets have entered the realm of real time sports. Sure, the NBA, NFL, etc. all have streaming services on their websites, but it isn’t a game changer for people who want to see it on their big screen. Because of this, sports may very well be the thing that keeps cable running — for now.

Cable is still going strong; however, with a change in ideology from streaming services, particularly the Netflix team who are putting together a plethora of exclusive programs on their service, competition will increase between the two technologies. As a result, television has a major threat on their hands as Netflix and others are becoming more accepted by the average watcher; the only way in which the traditional entertainment outfit continues to thrive is through its live programs.

Opinion by Simon Mounsey

Sources:

Variety
Slash Gear
The Atlantic
Rolling Stone
CNN
Forbes
Guru Focus

One Response to "Netflix Becoming a Threat to Television?"

  1. Linda Cameron   March 23, 2014 at 6:52 am

    I pay $120 a month to Charter for my internet and TV package which includes HBO, Showtime and lots of other premium channels. I find myself mostly watching Netflix which costs about $8 a month. It is just more pleasurable to watch shows I like, one after another even though they may not be brand new. If I haven’t seen them, they are new to me. It is so nice not having commercials and ads sprinkled across the screen of what I am watching. The garbage-ifying of tv shows is the main reason people I know don’t watch traditional TV any more.

    Reply

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