June 14, 2024

Netflix’s streaming strategy


This archived article was written by: David Rawle

One of the biggest sensations of this generation is movie-streaming service. This innovation revolutionized the movie industry for many years. People cannot live without it. With it being the new year, the question to be asked is, what will these companies do next? Netflix has already prepared a strategy for 2016.
If you are a fan of any British TV show on Netflix, then you have likely heard Netflix is getting rid of most of their BBC content (along with a lot more), or at least restricting it to the UK only.
This was heartbreaking news for fans of Doctor Who, Luther, and other fan favorites. Why would Netflix do this? It’s simple. Netflix decided to prioritize its original content over big box office companies like Epix and their movies i.e. The Hunger Games.
For a few years, Netflix produced its own content ranging from documentaries to kids T.V. shows. Titles such as Jessica Jones and Daredevil are Netflix exclusives.
Is this a good strategy or is it going to blow up in the company’s face? From what I could gather, it doesn’t seem like a good idea. According to Forbes, when Netflix first announced this idea on Dec. 7, 2015, their stock fell nearly 5 percent instantly.
The problem is that making their original content will be more costly for Netflix. This means that either they are going to have to raise the cost of a subscription or cut their content to make up for the amount they’re losing. This is why they are beginning to cut so much.
Netflix attempts to protect themselves from the loss of subscribers by adding nearly double the amount of original content they had in 2015. According to Forbes, Netflix plans on having a total of 31- original shows by the end of 2016.
On face this seems like a great idea, but even if this does end up working and creates massive revenue of cash, there may be some repercussions.
The biggest repercussion will be creating a content war. This has happened in the past and is happening today, with the leader being the console wars.
Videogame companies have what they call “Console Exclusive,” which are games that you can only play on one console. What Netflix is proposing to do could trigger this effect in the filming industry. Currently you can see most movies and TV shows on any streaming service you’ve chosen.
What happens when streaming companies begin to make their own content, or even have movie companies sign exclusive contracts promising only to show their content on their system? We have already seen glimpses of this when it came to Netflix and Adam Sandler’s “Ridiculous 6,” where they were basically throwing money at Sandler up front in exchange for him to make this movie just for them.
Does Netflix’s strategy make sense? Will it pan out the way they anticipate? It’s too early to tell for sure. We’ll just have to sit back and observe and hope that they know what they are doing and it doesn’t crash, burn or spread.