Netflix Sees Changes in the TV Landscape Emerging

TV – Netflix, the company that brought video on demand to the masses sees traditional broadcast on a downward spiral. According to articles from The Hollywood Reporter and Digital Trends, Netflix CEO Reed Hastings explained during a speech in Mexico City that traditional broadcast television will become another victim of  evolution.

With his background, nobody would expect anything less from him. The event in Mexico City was about the fast growth of Netflix in Latin America, one could say that Netflix is bringing the TV revolution further south.

He went on to say that he expects traditional broadcast TV to last until 2030 or so, though this is not his own expectation but is based on a Cisco Systems survey of 50 TV experts that expect that conventional TV viewing will be extinct by 2030.

Of course, this does not necessarily mean that the broadcast companies will become extinct as well, it means that they have to change their business model in order to survive. Netflix was always a great proponent of ‘no bundling’, which may be an excellent description of its business model.

Hastings also chipped away at another cornerstone of broadcast TV – Nielsen ratings. He described the upcoming Nielsen rating system for SVOD providers like Netflix and Amazon Prime as not very relevant, as they do not account for mobile video consumption. This could indeed cause some difficulties between advertisers and VOD providers, as some surveys show increased viewing on mobile devices like tablets and smartphones. On the other hand, Nielsen has already announced that it will include mobile consumption in its ratings in the future.

The main issue for Netflix is to gain more access to original content, which would make the business case much stronger indeed. One of the potential system breakers could be the upcoming sequel to Ang Lee’s ‘Crouching Tiger, Hidden Dragon’ that may be released directly online and in IMAX theaters. If this comes through, there will be two distinct release channels in the near future, as we can expect that the movie theaters will try to boycott this movie in theaters.

Interesting times for the TV industry indeed. – Norbert Hildebrand