5 Ways Netflix is Changing the Business of Television and Motion Picture

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From humble beginnings as a snail-mail-based DVD delivery service, Netflix has grown into a media production and distribution juggernaut. In 1997, when Netflix was founded by Marc Randolph and Reed Hastings, it was essentially a mail-order video store, unique only in that it saved the user two trips to the rental store and had fewer than 1,000 film titles to offer. As of September of 2013, the company reported itself as having more than 40 million subscribers worldwide, and they seem to be in the news every week announcing new milestones, new initiatives and new products and services.

5 Netflix Reversed the “Studio System” of Production and Distribution

For a company founded to ship other people’s films to your mailbox, Netflix has managed to become an impressive production company in its own right. In the past (meaning the mid-20th century), the standard progression was for a film production studio to grow so large and lucrative it began to manage the theatrical distribution of its own pictures. Today we have witnessed the reverse: Netflix grew so successful as a distribution platform that they began to acquire and produce original content which they would then distribute. This not only gives them total control of the content, but also avoids licensing fees from traditional distributors.

4 Netflix Allows Viewers to Choose How and When They Watch

Even more revolutionary than the announcement that a distribution company was making the jump into production was the revelation that Netflix was making entire series available for viewing all at once. Netflix executives understood that the modern television viewer often prefers to “binge watch” programs, viewing back-to-back episodes of shows in marathon sessions. Rather than forcing this type of viewer to wait months for a show to roll out over the course of a season, Netflix releases shows in huge batches of episodes, and they have done so with extreme success.

3 Netflix Adds High Profile Content ASAP

When Netflix is not busy producing its own award-worthy content, it is doing what it has always done—providing its subscribers access to the work of others. But recently the company has stepped up its game in that regard, acquiring streaming rights to the most successful shows on television and making them available only shortly after their original airing. The company has had immense success offering the hit show “Breaking Bad,” for example, and now just this week they announced a deal with Showtime to offer that network’s heretofore exclusive offering “Dexter,” a series which wrapped just weeks ago.

2 Netflix Wants a Channel on Your TV

Imagine flipping through the channels on your cable television only to land on one that offered you nearly endless choices for content viewing. Thanks to a new set-top box designed by Samsung in partnership with Netflix, that option could soon be a reality. The aftermarket hardware would work in concert with partnered cable channels to make an interactive Netflix channel appear alongside other channels such as HBO and FX. It remains to be seen if cable companies will see this as an infringement on their turf or as an opportunity for new (and potentially inevitable) growth.

1 Netflix Wants to Offer Movies the Same Day They Hit Theaters

In what would be the ultimate coup, Netflix Chief Content Officer Ted Sarandos has announced the company’s intention to make movies available for viewing via Netflix the same day they hit the big screen. Of course theater chains and the related distribution companies that support them will hate the idea, but consumers, evermore predisposed to consume content at home on giant flat screen TVs or on the go via mobile platforms, would surely respond enthusiastically. To make an end run around the certain protestation and preventive action of traditional distributors, Sarandos referenced Netflix’s ability to produce its own quality content.

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