Will Netflix be the First Successful Streaming Network?

Netflix, an entertainment streaming service/DVD rental company, has been making inroads with original content over the last few years. Starting several years ago with Lilyhammer from February 2012, Netflix has either added or will add nearly 100 original programs to their library of content by the year 2016. That is just the titles, not episodes. Many of those new titles are shows that will feature full, 13 episode, seasons and will be multiyear deals. Most recently, Netflix announced their acquisition of the follow up to Full House, Fuller House, to air in 2016. Netflix will also be premiering movies the day they hit theaters. The question is, can Netflix become the first successful streaming network?

Traditionally television networks had a channel, either over the air or on your cable box that would produce original content (or commission its creation) and were subject to Federal Communications Commission laws. Streaming services such as Netlix, Amazon Prime and Vudu are a new breed of service that is currently ahead of the laws in the United States. It is unclear if there will be laws made, or old ones modified, to directly target streaming services. Netflix is not the first streaming service to produce original content, Youtube is driven by this mantra. Netflix is one the first to spend millions of dollars to produce original content, just like traditional networks.

With the success of shows such as House of Cards, Hemlock Grove and countless comedy specials, Netflix has distanced themselves from similar services. Continuing their distancing from competition, Netflix releases the full season all at once rather than forcing fans to wait between episodes. This goes hand in hand with the way that most people use Netflix. Binge watching seems to be the #1 method of watching content on the popular streaming service, knowing this Netflix satiates that urge whenever possible.

With the continuation of The Problem Solverz (season 2) and Arrested Development (season 4) in early 2013 Netflix showed interest in continuing original programming that started elsewhere. This action is similar to what happens with some shows on “normal” network television where a show would start on one network and finish on another. Most recently this happened with popular Fox cartoons such as American Dad (now a TBS show) and Futurama (ending with Comedy Central). It is not just niche programming that Netflix has brought back for at least one additional season. Star Wars: The Clone Wars season six was commissioned by Netflix and so were seasons eight and nine of Trailer Park Boys. The content that is being brought to subscribers is all across the board and will vary in quality depending on the tastes of those subscribers. For the most part, there literally is something for everyone.

Original content that probably would not get the green light on traditional networks such as Marvel’s Iron Fist, Marvel’s Luke Cage and Montauk are all coming to Netflix in 2015 or 2016. Recently, Marvel’s Daredevil made its debut on the streaming service and has received favorable reviews by fans.

Much like the early days of Home Box Office (HBO), Showtime and other premium cable networks, Netflix built a firm foundation of fans by bringing quality content to the masses. As time passed and profits soared, giving fans more of what they want was only natural. What better way to improve profit margins than to produce original content that is only available on your service? HBO has done this for years with shows such as The Sopranos and Game of Thrones. Creating original content is a twofold profit building tactic.

First, with original content on your premium network fans will pay to see it. That means more subscribers overall which means additional revenue. This is the goal of any network that wishes to stay in business- turning a profit.

Second, if you are the only source for the original content and have the rights to release on DVD/Blu Ray then your company can rake in additional sales. Box sets, season sets, limited editions, etc all bring in additional revenue from repeat purchasing fans. Just ask Disney who have perfected the “normal” edition then the “anniversary” edition then the Gold/Diamond/Platinum editions of their movies. Releasing on DVD/Blu Ray allows content producers to reach fans that for one reason or another not purchasing a subscription.

Netflix has already begun releasing their flagship title, House of Cards, onto DVD/Blu Ray and there are signs that their other original content will follow when appropriate. This business model has produced additional revenue for networks for years (just look at the selection of season DVD/Blu Ray sets at your local store).

The “big name” networks are what most viewers consider success stories, it doesn’t help that almost everything else is owned by one of the alphabet soup networks (ABC, NBC, CBS, FOX). It has been reported that in early 2015, Netflix became worth more than the CBS network. Not bad for a company that has not been around 20 years yet (that anniversary will occur in 2017).

Netflix is available on many platforms such as the Playstation 3, Xbox, Nintendo Wii, cell phones such as iPhone and Android and more. This proliferation of accessibility has allowed Netflix to grow in popularity by being where the subscribers are. This is where most other Internet streaming services fail, they are simply not where the subscribers are.

Netflix is already well on their way to becoming the first streaming network to be truly successful. Amazon offers a similar service with their Prime subscription- complete with additional original content only available there. It still remains to be seen if Amazon can match the success of Netflix, it also remains to be seen if Netflix will be around in 50 years like the big name networks that have passed the half century birthday.