What does Netflix mean for traditional media?

Netflix CEO Reed Hastings arrives for the Netflix launch party in Paris in 2014. AP photo / Jacques Brinon
Netflix CEO Reed Hastings arrives for the Netflix launch party in Paris in 2014. AP photo / Jacques Brinon

In his keynote address at the Consumer Electronics Show in Las Vegas this week, Reed Hastings, Netflix CEO, announced that Netflix will now be available in 130 new countries. This sees Netflix more than triple its global presence.

The world map of Netflix availability on the company's website is now a sea of red. Among the countries yet to have access to Netflix is China, although the company is exploring this. Crimea, North Korea and Syria are also yet to be included due to United States government restrictions.

Netflix CES 2016 Keynote - Reed Hastings, Ted Sarandos - Highlights

So what does #NetflixEverywhere - as it was dubbed on social media - mean for the new media landscape globally?

While Netflix's main video on demand (VoD) competitors are seen to be HBO, Amazon and Hulu, their current global reach is small scale in comparison.

Hulu is only available in the US and Japan. HBO Now is available solely in the US and Amazon Prime Video is only available to customers located in the US and US territories.

Netflix is well known for its original content: Orange is the New Black, House of Cards, Narcos, Sense8 and Marvel's Daredevil to name a few.

The colossal expansion of Netflix can only provide more opportunity for original content, both globally and within the local market.

In a statement, Hastings noted:

We're looking forward to bringing great stories from all over the world to people all over the world.

The statement also listed the original content for 2016 to include:

  • 31 new and returning original series

  • 24 original feature films and documentaries

  • A wide range of stand-up comedy specials

  • 30 original kids series.

It is unclear where this content will be produced, but the Netflix original content will be available at the same time to subscribers everywhere.

Netflix original content

Unfortunately not all content available on Netflix will be released globally.

The licensing contract Netflix has with Walt Disney allows the service the rights to Disney films after a theatrical release, but will be limited to only the US and Canada. This shows a clear disconnect between the distribution business models and distribution potential for streaming services.

This staggered release approach is often cited to be part of the reason for high rates of piracy, although recently there has been a small decline.

Local impacts

These limitations on distribution will assist media companies in the rights battle locally.

In the middle of last year, Foxtel's Australian CEO Richard Freudenstein said:

Foxtel is a premium service, which naturally costs a bit more, whereas Netflix and Presto are add-ons either to free to air for people who don't watch much TV or to subscription TV.

Despite this claim there has been a large price drop on Foxtel services to compete with the new VoD services.

Netflix is now a global media network with almost full global reach. Last year, prior to the launch in an additional 130 countries, Netflix subscribers watched 42.5 billion hours of content.

It was also revealed that Netflix subscribers are watching on average 13 hours of content on a weekly basis. These hours of viewing are replacing other recreational time, presumably conventional television viewing.

Viewing habits have already changed

If specifically analysing the teen and 18-24 year old demographics the statistics are more damaging for traditional television viewing. Teens on average watch less than half that of the overall monthly average, 38 hours and 18-24 year olds watch 40 hours on average per month.

With regard to online video viewing, teens watch more than double the average, 28 hours, with the 18-24 demographic watching 22 hours per month. Both demographics viewed fewer than five hours of online video in 2011.

With the increase in smart television purchases, this will provide greater access to VoD services such as Netflix. This is in addition to the services being available via mobile and portable devices. Recently Apple TV used Netflix programming as part of its advertising campaign for the new Apple TV, titled The Future of Television.

Apple TV Ad

The return of live TV

For television broadcasters we may see a focus on providing content that Netflix won't, such as live content. This will include more reality and sport programming. It's interesting to note then, that television is verging back to a live medium, as it started in almost 60 years ago.

It is clear that viewing habits are continuing to change (see John Drinnan's recent column on streaming services in New Zealand and the local battle for viewers). Netflix is yet to have its first birthday here, but the uptake is impressive.

With Netflix now "everywhere", there is potential for viewers to benefit from this, including more content and hopefully more local content. The caution for Netflix must be to provide content for the local markets, not just a one-size-fits-all approach across more than 190 countries.

The Conversation

Marc C-Scott is a lecturer in screen media at Victoria University. This article was originally published on The Conversation. Read the original article.

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