http://www.Media4MathPlus.com 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.

1. How Netflix is Changing Media
Math in the News
Issue 92

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. 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.com)
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. 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. 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. 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. Netflix and Internet TV
Internet TV has completely changed the
viewing habits of many Americans. The old
Broadcast Model works like this.

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. 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. 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. 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. 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. 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?