The rise and rise of
How US giant changed TV
HThe other savvy – though pricey – move was to start making its own shows. Experts questioned it investing $100million in political drama House of Cards five years ago.
But the show, starring Kevin Spacey and Robin Wright, proved a big hit for six series. And it was followed by must-watch shows like Stranger Things, Orange is the New Black and The Crown. Plans are now in place to spend nearly £6billion on new content this year.
Tom Harrington, media analyst at Enders Analysis, says: “It’s quite remarkable it will have been just five years since Netflix released its first major original series.
“Back then, there were 30 million subscribers in the US and a million in the UK, and many questioned why big names would be making a TV show that would only screen on the internet. “Now there are around 118 million subscribers worldwide and Netflix is set to spend up to £5.7billion on its library of content in 2018. To put it in perspective, the BBC last year had just £1.7billion to spend on its TV programmes.”
Ofcom found eight out of 10 Brits now “binge view” and turn to on-demand to watch multiple episodes of a series in one go.
BBC’s iPlayer is the most popular on-demand service, ahead of ITV Hub, YouTube and then Netflix. Rather than watching live TV at home, we can now catch up by either streaming over the internet or downloading content.
The arrival of Netflix – along with Amazon’s Prime Video – has proved a challenge to terrestrial broadcasters like the BBC, ITV and Channel 4.
The BBC has offered the chance to watch some series in full on iPlayer before they hit terrestrial. It also now does co-productions with Netflix, including new epic Troy: The Fall of a City, and the upcoming Watership Down.
Such a shift in viewing habits comes as commercial broadcasters suffer falling TV ad revenue as firms target an online audience.
Reed Hastings, who owns a near £1billion stake in the firm, vowed to pump even more money in.
“We are continuing to take it up a notch,” he said recently.
But Netflix has competitors, from Facebook to Apple and Disney. Disney said it was pulling its films from Netflix as it launches its own streaming services this year. Meanwhile, Hulu, a US video service jointly owned by Disney, 21st Century Fox and Comcast, has hit 17 million subscribers.
Media mogul Rupert Murdoch suggested competition from Netflix contributed to his decision to sell his Fox stake to Disney, meaning the House of Mouse will have an even bigger slice of Hulu once the sale goes through.
But rapid growth and a fortune spent on programming has left Netflix with a £4.7billion mountain of debt. Profits are rising but it relies on signing subscribers at a rate of knots to ensure it continues.
Netflix has changed the face of TV but only time will tell where it will be in another 20 years.