The Netflix Model of TV

Category: Movies
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How it works

Netflix was co-founded in 1997 by Marc Randolph and Reed Hastings. One year later, becomes an online rental service, delivering DVD’s by mail. Netflix’s rapid evolution is no mistake. In 1999, the service was revolutionized offering content from a large selection, for a monthly fee.

By 2000, the site creates a recommendation system presenting accurate suggestions to members. In 2002, the company made a public offering of their securities. Three years later, membership increased from 600,000 to 4.2 million. The service now averages 130 million paid subscriptions all over the world. Over the last two decades, Netflix has worked to meet the demands of our everchanging world.

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The company’s resilience has paved the way for remarkable Television. 2007 began the age of streaming. Around the time Blockbuster was going bankrupt, Netflix had Its foot in the door to many different platforms. Since then, Netflix has expanded its horizons, establishing itself in one hundred and ninety countries while producing top quality television. Lack of competing air time has given shows a chance to grow.

Merging genres and trending topics together; calculating what consumers watch most. My personal favorite is the absence of advertisements. To me, the value is in the original content and the convince. No commercials, no schedule, original content, large selection of content, affordability, and compatibility, where could I go wrong?

In the late 1990s, cinema and television made its way into the hands of consumers in a much more traditional manner. Competing with companies like Blockbuster, Netflix made its way offering alternative methods of acquiring favorite content. In today’s world, we are a click away from high quality television, and far from late fees.

Netflix’s growing popularity stems from the many great achievements in its service. Terms like binge watching are compelling attributes to the internet sensation. Not only has Netflix produced quality television, it has changed the way we watch. In the past, traditional television networks have licensed shows only covering a fraction of production costs. Like HBO, Netflix has implemented a cost-plus model.

This business model provides fewer risks to a production team, covering the complete cost along with an additional thirty percent of the budget. The only downfall is Netflix retains most rights to the show, creating a large revenue if the show becomes a hit. This method has created an influx in quality TV, giving film makers a great shot at producing their dream show.

Netflix has branded itself with a series of Netflix Originals, creating a cult following of binge worthy TV. This lucrative idea makes Netflix a top competitor in producing content at an affordable price. It allows producers to take risk and challenge the social norms of television. Big Mouth is a great example of the boldness Netflix has to offer. Competitors of Netflix have attempted to diminish the advantages of a Netflix membership in the past. TiVo is the product of a need for on demand television. It is also a cry from the emerging digital age, leaving easily damaged disks behind. From mail to digital streaming, Netflix has grabbed control in a promising market.

Hulu has been a strong competitor in the race to shape TV. For $7.99 a month for a basic package to $13.99 for a premium, Netflix offers a bang for its buck, but it lacks traditional Television qualities. Some have called the company “return TV” highlighting its short comings to live content.

Sports packages are something that the current platform lacks. Recently Netflix diversified content with cooking shows, comedy specials, documentaries and multi-language series. Multi lingual hits are becoming a popular way to broaden memberships around the globe. The company’s ability to intertwine itself among popular products from companies like Sony, Microsoft, and Apple, have made watching Netflix easier than ever.

The combination of contracting successful shows while funding upcoming projects has only strengthened the platform. This perfect storm is comparable to the process music industry underwent in the age of the internet. Napster provided a platform for new and upcoming artists to get large scale recognition. Unless you are Metallica, the platform sounds great. A platform may develop its own niche in a battle between format, mediums and overhead. Who knows the number of shows the Netflix platform has protected. Strangers Things 2 did wonders for the company’s promotion, becoming a trending topic by word of mouth. Netflix Originals like Godless have displayed its ability to rejuvenate genres. Television programs are becoming longer movies. The cinematic quality has left reality TV in the dust.

Netflix accounts for fifteen percent of all internet traffic globally, making it larger than YouTube. It is the number one in video streaming throughout the Americas. While Amazon Prime accounts for less than four percent globally, it goes without saying what Netflix has accomplished in last twenty years.

Netflix’s ability to phase their growth has attracted investors. This year the company has been nominated for one hundred and twelve Emmy nominations, dropping HBO into second place. HBO has held first place for the last seventeen years. Netflix’s business model is studied and applauded. Who knows, where Netflix will be in ten years.

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The Netflix Model of TV. (2019, May 12). Retrieved from