Math in the News: Issue 92


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In this issue of Math in the News we look at the dramatic growth in subscribers for Netflix. We calculate the rate of growth. We also explore how companies like Netflix are changing the viewing habits of all Americans.

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Math in the News: Issue 92

  1. 1. How Netflix is Changing Media Math in the News Issue 92
  2. 2. Netflix and Internet TV In a previous issue of Math in the News (Issue 40) we looked at the success of Netflix, even as it struggled with changing its business model. In this issue we look at Netflix not just as a successful business, but as a cultural agent of change. Netflix is redefining the TV-viewing experience.
  3. 3. Netflix and Internet TV The growth of Netflix has been dependent on the growth of its subscriber base. This graph shows how the subscriber base has grown dramatically since 2002. (Source: Netflix Subscribers: 2002–2013 45,000 40,000 40,000 Subscribers (thousands) 35,000 30,000 30,000 25,000 20,000 20,000 15,000 12,300 10,000 9,400 6,300 5,000 7,500 4,200 857 2,610 1,487 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013
  4. 4. Netflix and Internet TV If we assume a constant percent increase per year, Netflix’s growth in subscribers averaged 42% per year! However, it’s growth was not linear, meaning it grew at an even faster rate in some years. A = A0 • r t 40,000 = 857 • r 11 40,000 r = 857 11 40,000 r= 857 r » 1.42 11
  5. 5. Netflix and Internet TV While Netflix has 40 million paid subscribers, the actual users of the service is a multiple of this number. After all, TV viewing is a family activity.
  6. 6. Netflix and Internet TV Assuming that there are at least two users for every one subscriber, then the Netflix user base is around 100 million people, which is a sizable community of TV viewers.
  7. 7. Netflix and Internet TV Internet TV has completely changed the viewing habits of many Americans. The old Broadcast Model works like this.
  8. 8. Netflix and Internet TV With Netflix’s vast archive of content, an entire season of programs can be viewed at once, resulting in what is called “binge” viewing.
  9. 9. Netflix and Internet TV Recently, Netflix released all new episodes of House of Cards simultaneously. As it develops exclusive content, Netflix will further change the viewing habits of TV viewers.
  10. 10. Netflix and Internet TV While Netflix is not the only player in the Internet TV market, it is the biggest. But competition is quickly emerging, adding to the changing landscape of TV viewing.
  11. 11. Netflix and Internet TV Internet TV is no longer limited to a television. Mobile devices are also reshaping the way televised content is consumed.
  12. 12. Netflix and Internet TV Conduct a survey to see how people’s TV habits have changed. Gather data for this set of questions: 1. How many hours of TV do you watch per week? 2. Of the hours of TV you watch • • • How many hours are spent watching live TV? How many hours are spent watching prerecorded TV programs on a DVR or other device? How many hours are spent watching programs online (Netflix, AppleTV, or other streaming service)?
  13. 13. Netflix and Internet TV Create a circle graph to show the percentage of time spent watching TV in the old Broadcast Model and the percent spent watching prerecorded or streamed content. Are you surprised by the results? How do you think the results will differ in a year?