Week 7 Key Post: Netflix

 Netflix: The Streaming King

 

Netflix needs no introduction. The king of video streaming, Netflix has weaseled its way into the homes of families all across the globe. But how did Netflix extend its influence? Where did it all start? In this key post, I will be discussing the history of Netflix, its influence on the video industry, and pitfalls it has faced over its twenty-three years of existence. 

History 

The two people pictured above are Reed Hastings (left) and Marc Randolph (right), the founders of Netflix. While according to this article by Dave Butler the stories about Netflix's history differs between Hastings and Randolph, the discrepancies between the two revolve around taking additional credit for Netflix's creation, or specifically,  Hastings attributing not paying a late fee for late rental returns as the reason why Netflix exists. 

Netflix was created in 1997 as a way to rent movies through the internet. Within the next year, the website for Netflix was born, allowing people to purchase movies to rent online and have them delivered to their door. BlockBuster at this time had a monopoly on the video rental industry and was the leading contender for years. Similarly, Netflix's beginnings as it went public in 2002 were rocky as the consumer was unable to instantly watch the film, and instead had to wait for it to arrive in the mail, turning away a significant amount of customers (Only 4.2 million customers in 2005). Additionally, people enjoyed the experience of going into stores, seeing the candy and cover art, picking out the film, and watching it as soon as they arrived at home.  

However, things began to change drastically in 2007 when Netflix's streaming service became active.  From this time, the popularity of Netflix skyrocketed, completely overtaking its competition. which was mainly BlockBuster. In addition, Netflix was able to establish a consumer-friendly site that was easy to navigate and instantly allow people to stream content with a click of a button. Plus, Netflix also had a revolutionary recommended content tab that would select content for the user based on what they were watching, making the search for something to watch effortless. 

 

Positives

 
 The main selling point of Netflix pre-2009 was the fact that you can return the rentals anytime you want without any late fees. Today, Netflix offers a seemingly endless amount of content on its platform, including their own original releases. In 2013, Netflix released its first original House of Cards, which attracted a massive audience. Now, as of 2019, there are 1,178 original shows according to Megan Elliot. Obviously, after the release of House of Cards, originals became a major selling point for Netflix, capitalizing on not only American/UK productions, but producing content all over the world (#Alive, Money Heist, Narcos).

Another positive trait for Netflix is how much cheaper it is than cable television. Looking at the graph above, one can see that a premium Netflix package will cost you $16 a month that allows you to watch on 4 separate screens at once at maximum quality. Compare this to the two big cable companies: Spectrum and AT&T. The cheapest option available for Spectrum is $44.99 per month and AT&T is $59.99 per month. With this information, it is incredibly hard to justify why a person living on a lower income paycheck would purchase cable over Netflix, when they receive similar, if not the same, popular shows in addition to phenomenal original content.

 

Downfalls of Netflix

At first glance, it is quite hard to think of any real pitfalls of Netflix, aside from a few controversies with content that is allowed on the platform (Cuties being child porn and 13 Reasons Why exploiting teen suicide). Yet, after doing extensive research, I found that at one point Netflix held a competition for computer programmers to create an algorithm that was better than their current one for personal content recommendations in 2006. The issue with this is, according to James Bennett, the programmers were given access to 480,000 person's user data and over 100 million movie recommendations. Some people took issue knowing that their data had the potential to be used in this competition, but nothing of serious note happened until the second competition in 2009, when programmers were able to use the data given in order to identify a person in anonymous data (Was Rahman). This led to a class-action lawsuit against Netflix resulting in regulation from the FTC. 

On a different note, binge watching has become a significant issue with all streaming services, not just Netflix. However, in 2013, after the release of the hit-series Arrested Development, reports showed that around 10% of all viewers that watched the show completed the season within 24 hours (Sidneyeve Matrix). While that number may seem low, put this into perspective: if 5 million people tuned in to watch Arrested Development as soon as it was released, that means approximately 500,000 people viewed the entire season in one day. To make matters worse, binge culture is more popular with younger audiences who like to brag on social media about their endeavors after binging an entire season of a show. As a result, we can see a widespread pandemic of binge viewing among our youth that is taking precious time out of their life that could be spent doing something productive with their time.