Running head: Effects of the Streaming Video Age 1

Effects of the Streaming Video Age:

A Study on How Netflix Changed the Movie & TV Industry

Jade Childs

North Carolina A&T State University

Abstract

Cutting the cord is a new global phenomenon. The phrase refers to a pattern of media

viewers cutting their cable cords by canceling their subscriptions and opting for streaming

services instead. Netflix is to blame for this impactful change to the media industry. This paper

explores how Netflix has changed the tv and movie industry indefinitely and how the “Netflix-

Effect” will impact the future of the entertainment industry.

As more people start to cut the cord, there is a fear that cable networks will become

obsolete, making streaming services the new normal. This paper compiles the data from multiple

published articles to show how Netflix has changed the film industry and examines why these

effects are significant. Lastly, it will explore what this means for the future of Hollywood. This

paper will conclude that cable tv will not become obsolete, but it will need to change its ways to

compete with video streaming networks.

Effects of the Streaming Video on Demand (SVOD) Age: A Study on How Netflix Changed

the Movie & TV Industry

As mentioned earlier, people are “cutting the cord” on cable tv, opting for streaming

services and HD antennas instead. Streaming services cost less than traditional cable, and

customers control their media content, making streaming a more personable and favorable

alternative. According to Steph Grassullo, a reporter for PopInsider.com, “A big selling point for

SVOD is that the platforms are unique from user to user. Whereas cable tv is designed for the

masses, streaming services let viewers choose what to watch from a large portfolio of content,

and then streamline it to cater to each specific user.” (Grassullo, 2018)

which allows them to tailor them to their interests. Meaning they no longer must stroll through

hundreds of tv channels trying to find something entertaining to watch. Instead, they can open

their video queues and choose entertainment that suits their tastes. With the ability to custom

create their personalized ques, streaming services consistently suggest content that it believes the

user will enjoy. Netflix uses algorithms to track what their customers are watching, and they use

that information to promote other similar content that is available, which keeps their audiences

engaged because they offer an endless amount of entertainment.

Netflix Disrupts “The Industry”

Since August 29, 1997, Netflix has been revolutionizing the way we consume media,

changing how we entertain ourselves forever. Subscribers watch whatever they want, whenever

they want, on nearly any device. When the company officially launched on April 14, 1998, it

focused-on renting DVDs through the mail. On January 15, 2007, Netflix changed the way we

view entertainment at home by introducing video streaming to its public, which allowed

customers to skip the hassle of waiting for videos to arrive in the mail. As CEO Reed Hastings

once said,

Netflix was thought to be the future of movie rentals, but it was the television industry

that the company utterly disrupted. The ease and accessibility of online video now poses

a grave threat to the standard model of television programming and is rapidly pulling

subscribers away from the cable industry. More and more, consumers are ditching other

television providers and turning to the web for their viewing pleasure. (Hastings, 2018)
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Hasting's is right. The number of cable and television subscribers has dropped drastically

over the years because media networks are unable to compete with Netflix. Netflix has no

commercials, and the service costs one of a quarter of what cable does. There is no waiting for a

time for shows to air, and the videos are available instantly and over many different platforms.

According to Beliefnet.com, “You can flop onto your couch and binge-watch, a concept which

didn’t exist before Netflix.” (Beliefnet.com,2018)

Furthermore, “All the Boys I’ve Loved Before,” director Susan Johnson recently said in

an interview, “Netflix has an advantage, in that they can see what viewers are looking for.

They’re 24/7, and they have teams everywhere literally looking for what people are searching

for.” Netflix's dedication to its customers is giving them an advantage over its competitors.

Netflix is focusing on what its customers want, and then they are giving it to them in abundance.

Netflix VS Cable Companies

In 2011, Netflix beat out studios such as HBO and AMC for the rights to the show House

of Cards, proving that it was no longer just a streaming service, but a full-fledged studio. Netflix

continued producing top-notch productions such as Orange Is the New Black and Stranger

Things. Their original shows began winning Emmys and proved to major cable companies that

Netflix was a contender. TV showrunners began to view Netflix as a place where they could take

a risk, and an even bigger bonus is Netflix can spend more on their content than cable networks.

The amount of money Netflix spends to produce their content is moving the needle for

the entire tv industry. Production companies realize that they will have to spend a lot more

money to compete against Netflix. Lanre Bakare, a reporter for “The Guardian,” stated,

“Netflix’s impact on how we consume television is unavoidable. The TV landscape is littered

television without Netflix,” Bakare backs the public opinion that Netflix has become a major

media giant.

Netflix and Its Audience

Binge-watching and Netflix and Chill are two commonly used phrases in today’s pop

culture that didn’t exist before Netflix. Netflix is a major contributor to modern pop culture.

Netflix and Chill describes the way today’s youth dates. Why spend a lot of money going out?

When you can stay in, order take out, and stream tons of movies at home on the sofa? Netflix

and Chill is a cheaper dating option.

Binge-watching, another cultural phenomenon that Netflix started, “With episodic

content, especially serialized, it’s so powerful to have all the episodes at once. And it's something

that linear TV can’t do. Now viewers can watch at their own pace.”(Hastings, 2018) Allowing

users to control how much content they watch in one sitting was Netflix's most innovative and

strategic decision.

Netflix also got writers involved to help promote binge culture. In the past, tv writers focused on

writing cliffhangers throughout episodes to keep their audiences in suspense throughout the

commercial breaks, but Netflix shows followed a different model. Netflix writers intentionally

put cliffhangers at the end of episodes to entice their audience to continue watching the series.

This created a never-ending cycle of entertainment, which created the concept of binge-

watching.
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Effects of the Streaming Video Age

What Does This Mean for the Entertainment Industry?

DigtalBrew.com explained, “The viewer can now watch at their own pace, the

entertainment industry is becoming fragmented as a result. The power is in the hands of the

consumers, and consumers want convenience, personalization, and affordability. To meet the

needs of the consumers, streaming services and cable networks alike need to constantly be at the

forefront of technology and embrace it where it's due.”

Many broadcasters are heeding this warning as they realize that streaming is the preferred

method for their consumers. Many media giants are embracing technology and offering

streaming models of their own. Companies like HBO, The CW, Fox, and ABC have launched

their streaming services to allow their customers to stream their content in their own time and on

any mobile device. According to Grassullo, “Television networks are doing just fine. Cable

networks are learning how to adapt to the changing times and keep up with their completion.

While most of the network advertising revenue is remaining stagnant now, cable still has a place

in our society. The biggest takeaway here is that the power is in the hands of the consumers.

(Grassullo, 2018)
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References

Baines, W. (n.d.). How Netflix Changed Entertainment. Retrieved from

https://www.beliefnet.com/entertainment/how-netflix-changed-entertainment.aspx

Bakare, L. (2018, July 21). Netflix has forever changed the way we consume television | Lanre

Bakare. Retrieved from https://www.theguardian.com/media/2018/jul/21/netflix-gamble-

original-content-changed-way-consume-television-forever

Grassullo, S. (2018, May 23). How Streaming Changed the Entertainment Industry-and our

Lives. Retrieved December 3, 2018, from https://thepopinsider.com/features/streaming-

services-changed-the-entertainment-industry-ways-people-watch-tv/

Hastings, R. (n.d.). Reed Hastings: How Netflix changed entertainment -- and where it's headed.

Retrieved December 3, 2018, from

https://en.tiny.ted.com/talks/reed_hastings_how_netflix_changed_entertainment_and_wh

ere_it_s_headed

How Video Streaming is Changing the Entertainment Industry. (2017, January 02). Retrieved

from https://www.digitalbrew.com/video-streaming-changing-entertainment-industry/