Netflix steps in the ring with traditional TV

Max Miranda, A&E Editor

We all know that feeling: it’s deep into the night, and there are voices in your head wisely advising you to get work done.  Yet, defiantly acting against your better judgment, you decide that you just have to watch one more episode of whatever show on Netflix.  It is strange to think that a large bulk of the students who are in a similar situation end up succumbing to their viewing experience rather than actually doing work.

It is easy for someone to ask, “How is it possible that one website can serve as such an entertaining, addictive and constant source of procrastination?” The answer lies in Netflix’s capability to let the viewer take the reins.

Once upon a time, the word Netflix used to conjure up images of square envelopes containing bulky DVD’s arriving via physical mail.  Since the prehistoric era, the company has transformed its business into an internet-based powerhouse, with the vast majority of viewers preferring to get their entertainment from Netflix’s internet streaming.  This allows viewers to watch anything they want at any time they want.

It is such a strategy that has yielded Netflix more than 29 million subscribers, a 250 point jump in stock price over the past year, and over 3.6 billion dollars in revenue last year alone.

Netflix’s success has recently put pressure on traditional TV companies to give their viewers the same courtesy.  Perhaps this problem has been best described by actor Kevin Spacey, the star of Netflix’s nine-time Emmy nominated series House of Cards.  At the Edinburgh Television Festival, the esteemed actor described the issue: “The audience wants the control…  if they want to binge, then we should let them binge…  I predict that in the next decade, any differentiation between these two platforms will fall away.”

According to the FCC, the average monthly cost of having cable has gone up 5.8 percent in the past year, bringing it somewhere over $60.  In comparison to Netflix’s fixed rate of $7.99 per month, it is not surprising that several networks are taking action toward Netflix’s formula.

National cable companies such as DirecTV, Comcast and Verizon are vastly expanding their on-demand TV offerings in hopes of catching up to Netflix’s current model.  It seems that such a strategy is intimidating Netflix, as the chief content officer of Netflix has said that the company won’t be willing to pay TV content owners as much if they give full-season rights to such companies.  However, such attempts to “marginalize Netflix” clearly have a ways to go.

However, it is not all sunshine and rainbows for the internet-streaming company.  According to a survey done by Consumer Reports, the satisfaction rating of Netflix ranks significantly lower than services such as iTunes, Amazon, Hulu, and even Vudu. Netflix has also been facing trouble in their newest international expansion as they have been losing millions trying to expand into different nations. In addition, the problem that has seemed to be following Netflix for years is still persisting as several people still claim the selection of titles is too limited. Yet the biggest of the challenges for Netflix has been turning an actual profit, as Netflix spends nearly 90% of it’s revenue on purchasing spending rights. Whether Netflix’s or cable’s model will stand is only for time to tell.