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The Netflix Effect: How one company conquered and redefined an industry and its people
- 2. THE MERE EXISTENCE OF NETFLIX REFLECTS THE CULTURE OF THE LATE 1990S, WHILE THE CONTINUED TECHNOLOGICAL DEVELOPMENTS TO MEET CONSUMER DEMAND AND INTRODUCTION OF NEW WAYS TO VIEW TV AND MOVIES REFLECT THE SNOWBALL ADVANCEMENTS OF THE EARLY 2000S. SIMULTANEOUSLY, NETFLIX HAS FURTHER CREATED CULTURE THROUGH ITS ALGORITHM USAGE, NEW CONTENT PRODUCTION, AND IMPACTS ON LANGUAGE.
- 3. THEN VS. NOW Then Now Wait for scheduled shows Watch when you want Wait until you get home Watch where you want Wait for the next episode Watch the whole season now Wait in line to rent videos Watch now with a simple click Late fees Consistent monthly cost Sift through whatever’s on to find something Scroll through tailored recommendations Commercials No advertisements Pay extra for cable All streaming services combined cost less
- 5. KEEPING UP WITH THE CULTUREReflection
- 6. WAR OF THE ALGORITHMSCreation
- 7. “ ” THIS IS PREDICTIVE SOFTWARE SHAPING EVERYDAY CULTURAL ENCOUNTERS IN WAYS THAT ARE TURNED INTO NUMBERS SO THAT THEY CAN THEMSELVES BE MEASURED AND ALTERED. - DAVID BEER, POPULAR CULTURE AND NEW MEDIA
- 9. “ ” SMALLER COMMUNITIES OF FANS, FORGED FROM SHARED PERSPECTIVES, OFFER A MORE GENUINE SENSE OF BELONGING THAN A NATIONAL IDENTITY BORN OF GEOGRAPHICAL HAPPENSTANCE. - TIM WU, NEW REPUBLIC
- 12. “ ” THE UNITED STATES WAS ONCE, ALMOST BY DEFINITION, A PLACE WITHOUT A DOMINANT NATIONAL IDENTITY. AS IT REVOLUTIONIZES TELEVISION, NETFLIX IS MERELY HELPING TO RETURN US TO THAT PAST. - TIM WU, NEW REPUBLIC
- 13. NETFLIX CAME TO EXIST BECAUSE OF THE CULTURE, REFLECTING THE DESIRES FOR EASE, CONVENIENCE, AND COST- EFFECTIVENESS, AND IT HAS CONTINUED TO EVOLVE TO REFLECT CULTURAL NORMS AND DESIRES. AT THE SAME TIME, NETFLIX HAS ALSO CREATED CULTURE THROUGH ITS ALGORITHMS, ORIGINAL PRODUCTIONS, AND LANGUAGE IMPACT.
- 14. GRAPHICS & VISUALSPatkar, M. (2016, January 18). How to Watch Everything on Netflix No Matter Where You Live. Retrieved May 30, 2017, from Make Use Of: http://www.makeuseof.com/ta g/watch-everything-netflix- matter-live/ The Secret to Netflix's Success: Exploring Netflix Originals. (n.d.). Retrieved June 7, 2017, from Cercone Brown Company: http://cerconebrown.com/ex ploring-netflix-originals/ 2015 Tumblr Year in Review. (2015). Retrieved June 7, 2017, from Tumblr: http://yearinreview.tumblr.com/post/134671925897/l ightinthebox-sometimes-the-lightinthebox-girl Stenovec, S. G. (2015, November 7). The most popular streaming devices in the US. Retrieved June 7, 2017, from Busines Insider: http://www.businessinsider.com/the-brands- americans-use-most-to-stream-2015-11 Holly, R. (2014, January 23). Netflix will fight account sharing with three pricing tiers. Retrieved May 28, 2017, from Geek.com: https://www.geek.com/news/netflix-will-fight- account-sharing-with-three-pricing-tiers-1582885/ Mataconis, D. (2011, February 25). Chart of the Day: Netflix v. Blockbuster Edition. Retrieved May 25, 2017, from Outside the Beltway: http://www.outsidethebeltway.com/chart-of-the-day- netflix-v-blockbuster-edition/ Nocera, J. (2016, June 15). Can Netflix Survive in the New World It Created? Retrieved June 7, 2017, from The New York Times: https://www.nytimes.com/2016/06/19/magazine/ca n-netflix-survive-in-the-new-world-it- created.html?_r=0 Payne, J. (2014, March 27). It's all about the Data. Retrieved June 7, 2017, from CustomerIntelligence360: http://www.customerintelligence360.com/data- marketing/ Miners, Z. (2014, January 22). Netflix warns ISPs against 'draconian' response after net neutrality ruling. Retrieved June 7, 2017, from ComputerWorld: http://www.computerworld.com/article/2486801/int ernet/netflix-warns-isps-against--draconian-- response-after-net-neutrality-ruling.html
- 15. SOURCES O'Brien, J. M. (2002, December 1). The Netflix Effect. Retrieved June 8, 2017, from Wired: https://www.wired.com/2002/12/netflix-6/ Keating, G. (2012). Netflixed: The Epic Battle for America's Eyeballs. New York, New York, USA: Penguin Group (USA) Inc. Retrieved June 7, 2017, from https://books.google.com/books/about/Netflixed.html?id=sodDcL2yhsIC&printsec=frontcov er&source=kp_read_button#v=onepage&q&f=false Tryon, C. (2013). On-Demand Culture: Digital Delivery and the Future of Movies. New Brunswick, NJ, USA: Rutgers University Press. Retrieved May 25, 2017, from https://books.google.com/books?id=lKgODAAAQBAJ&pg=PT31&lpg=PT31&dq=how+is+netflix +shaping+culture&source=bl&ots=MRp3ha6Wed&sig=T1c3yUjj6Uaha6k_pDaCVRCtp5I&hl=e n&sa=X&ved=0ahUKEwicjJnl7ovUAhVJqlQKHUfkCvc4ChDoAQhDMAQ#v=onepage&q=how%20i s%20netflix%20shaping Wu, T. (2013, December 4). Netflix's War on Mass Culture. Retrieved May 25, 2017, from New Republic: https://newrepublic.com/article/115687/netflixs-war-mass-culture Malcolm-Boulton, C. (September, 26 2016). The good, the bad and the binging: How Netflix has impacted on modern society. Retrieved May 25, 2017, from Brig Newspaper: https://brignews.com/2016/09/26/the-good-the-bad-and-the-binging-how-netflix-has- impacted-on-modern-society/ Machkovech, S. (2014, September 29). Report: Game consoles most widely used video streaming devices in US. Retrieved June 3, 2017, from ars Technica: https://arstechnica.com/gaming/2014/09/report-game-consoles-most-widely-used-video- streaming-devices-in-us/ Rickett, O. (2015, September 29). How 'Netflix and chill' became code for casual sex. Retrieved June 2, 2017, from The Guardian: https://www.theguardian.com/media/shortcuts/2015/sep/29/how-netflix-and-chill- became-code-for-casual-sex Striphas, B. H. (2016). Recommended for you: The Netflix Prize and the production of algorithmic culture. New Media & Society, 18(1), 117-137.Retrieved May 24, 2017, from http://journals.sagepub.com/doi/full/10.1177/1461444814538646 Beer, D. (2013). Popular Culture and New Media: The Politics of Circulation. London, UK: Palgrave MacMillan. Retrieved May 25, 2017, from https://books.google.com/books?id=SD6JpqEgINsC&pg=PT58&lpg=PT58&dq=how+is+netflix +shaping+culture&source=bl&ots=SKz0ovVzYE&sig=WgsuoJIrP0P_y9tNUP0_n9Mvo7E&hl=en &sa=X&ved=0ahUKEwicjJnl7ovUAhVJqlQKHUfkCvc4ChDoAQgzMAE#v=onepage&q=how%20is% 20netflix%20shaping Mataconis, D. (2011, February 25). Chart of the Day: Netflix v. Blockbuster Edition. Retrieved May 25, 2017, from Outside the Beltway: http://www.outsidethebeltway.com/chart-of-the-day- netflix-v-blockbuster-edition/
Editor's Notes
- The Netflix Effect is a term coined to describe how Netflix single-handedly changed the way our society watches television. Others have used the term to describe how the company virtually obliterated video rental stores, as well as its impact on movie theaters and other industry players. The term efficiently summarizes the massive impact Netflix has had on our culture through television while hinting at the culture which influenced the company’s rise.
- Even the title of this presentation is indicative of the impact Netflix has had on our language. Netflix is now to television what Google is to internet searches.
- Our children will be amazed when we describe the days of waiting until 7/6c to watch our favorite show only available on Friday night. They will recoil when we tell them we had to be home or visiting our friends to even have the option to watch. They will look at us with pity as we recall those 30 minutes of brain-numbing bliss that was over once it was over. Our children won’t know what a video store is, nor will they be gouged with fees for returning the movies late. And they’ll never again be at a loss for new series and movies to watch, nor be the only kid in their class who doesn’t have cable television. With the dawn of Netflix, a new era was born! Now we watch our shows whenever we have a free moment, wherever we can grab a comfy spot. We can pause half-way through or watch an entire season in one go, all without ever having to see a commercial. We laugh in the face of late fees as we update our queues with the latest new Hollywood release, safe and comfortable with our reliable, monthly rates. And we rarely feel left out at the office water cooler because the trending show is on a cable network we can’t afford.
- Blockbuster was at the top of the food chain when Netflix first launched its DVD rentals in 1998. No one thought a tiny internet startup with less than 1000 DVDs could topple the largest company in the business, especially since most people were still watching VHS. Netflix quickly realized that it couldn’t operate the same way as the brick-and-mortar store did, charging $4 per rental along with a $2 shipping fee. Instead, Netflix developed the monthly unlimited rental rate with free shipping, and suddenly, business was growing. By 2000, Netflix offered itself for sale to Blockbuster for $50 million. In one of the most epic business failures ever, Blockbuster declined, and the game was afoot. By 2003, Netflix was finally making money, and suddenly speculators began to take notice. The shocking and sudden demise of Blockbuster in 2010 rocked the business world in what would one day be referred to as the Netflix Effect. It was truly a David versus Goliath story, a herculean feat. Yet anyone with a finger on the consumer pulse could have seen it coming. Our society was tired of driving across town to fight with each other over the limited copies of new releases, followed by a mad dash home to watch their rental, only to drive back the next day to return it and avoid exorbitant late fees which could quickly make purchasing a personal copy a cheaper alternative. Netflix CEO Reed Hastings even fed a story to the media, claiming that he came up with the idea for Netflix when he was charged $40 in late fees by the rental giant. Although it was just a story, it resonated with many consumers who were tired of fighting the giant on their own.
- Netflix understood that, just as it proved Blockbuster to be irrelevant, it had to prove its own relevancy, or it would suffer the same fate as its not-yet-former foe. Online competitors – including Blockbuster and Walmart - seemingly sprang up overnight, ready to challenge for supremacy in the new frontier. Netflix rose to the challenge, blazing yet a new trail with online streaming in 2007. As consumers quickly climbed on board, Netflix continued to correctly anticipate the culture shift by being the first to develop apps for smart phones and gaming systems, allowing their customers to watch instantly wherever they went and even on their TVs. With the development of connected boxes - like Roku - and smart TVs, Netflix quickly released apps for each and every device. Membership skyrocketed. By 2010, Netflix had gone international, Blockbuster was bankrupt, and there was no stopping the Silicon Valley startup. Yet Netflix needed to maintain its edge as other streaming services – like Hulu and Amazon Prime - began vying for the audience.
- Netflix invested heavily in improving its recommendation algorithms early on. It had to understand the common threads that drew a viewer from one movie or show to the next. Netflix had also created the ideal conditions to directly observe and understand how people watch television. Because the data was there, constantly self-updating and fed by consumers themselves, Netflix simply had to sort and compile the data into a sensible, understandable report. Of course, it did exactly that. Soon, Netflix was explaining to everyone how it knows when a person gets hooked on a series, down to the exact episode. It learned that people like to watch several episodes in a row instead of parsing them out like network television does. It understands how people watch, when people watch, what people watch, and what they’re using to watch. Initially, Netflix would simply share some of this data with the public, but surely there was a way to gain from it all financially.
- This quote directly addresses and easily dissects the idea of technology shaping culture.
- In 2013, Netflix made another bold move by stepping into production. With the release of House of Cards, Netflix proved that it was more than just a facilitator. It was a creator. Combining its gleaned, algorithmic knowledge about how and what people watch with its heavy financial investments, Netflix had literally calculated a winning formula. By creating its own content, Netflix is now the creator of fandoms and niche groups. Because it is telling the stories, it is now impacting the formation and interpretations of opinions and ideas.
- Because of Netflix, fandoms became mainstream, and this helps explain the drive behind the phenomenon.
- Perhaps one of the most obvious ways Netflix has created culture is also the most inadvertent. It has seemingly pervaded our language. Although the term binge-watching has been traced back to pre-streaming – used by fans seeking episodes of their favorite series on internet message boards – it truly gained notable usage with the dawn of Netflix streaming of entire seasons. Follow that with such terms as the Netflix Effect and Netflix prize and netflixing (another term for binge-watching), and then 2015 happens. While the first known use of Netflix and Chill was traced to 2007, and actually referred to relaxing with someone while watching Netflix, by 2015, it was a facetious euphemism for casual sex. Thank you, 2015.
- Thus far, Netflix has been the trailblazer and leader in online streaming, but networks and other corporations are catching on and trying to catch up. To maintain its edge, Netflix is spending billions of dollars to procure original content along with its negotiations for airing other networks’ content. There is currently a battle below the surface between Netflix, legacy networks, and the newer arrivals such as Hulu and Amazon Prime. The next few years will see that battle waged openly as the new television order is established. Netflix is well aware of its vulnerabilities and need to change and reinvent itself to stay relevant, however, the chain they set off with the small DVD-rental company just 20 years ago makes it clear that the company and its influence is anything but predictable.
- This terrifically reflects how cyclical society and culture are despite technology. Regardless of what the future holds, there’s really nothing new under the sun.