Analysing the impact of Netflix’s “Long Term View” plan

Already a favourite service in many households, Netflix has become an indispensable service for on-demand entertainment consumption. With successful ventures into original programming, where do they expand from here?

Luckily Netflix’s “Long Term View” plan gives some insight, beginning the report with a quote from Kevin Spacey’s character on the original hit show ‘House of Cards’: “Look at the bigger picture.”

Most will agree with the first point, “the linear TV model is ripe for replacement.” The old system of waiting for scheduled time slots to see your favourite show or movie is something fewer and fewer people wish to participate in.

Consumers want the content they want, when they want it, wherever they want it; TV, PC, tablet, mobiles, accessibility is key. One of the greatest assets of Netflix’s on-demand content is it’s very easy to pick up: select what you want, and it’s delivered instantly with no ads.

Netflix asserts in the document that “streaming 4k video will happen long before linear TV supports 4k video.” This is a very likely thesis. It may be a while before 4kTVs are cheap enough to reach many households and terrestrial providers will be in no hurry to put the infrastructure in place to support such broadcasting yet.

Infact, it’s likely over the next decade fewer investments will be made in terrestrial and more funds will placed into streaming on-demand content, a view supported in the report, noting: “In the UK, for example, the BBC is already starting to program more for its iPlayer app than for its linear channels, given the large and growing viewing on the iPlayer.”

Streaming content can in fact be linear however, although how it will work in practice is questionable. YouTube are currently planning to launch scheduled “channels” which rotate 24/7 with long-form “shows” of which are gaining popularity on the service that gets over 1 billion unique users each month. Although how many viewers will want to wait for a show to start they can get on-demand? This seems a step back, rather than innovation.

Of course Netflix (arguably more than anyone) realise the rise of TV apps, hopefully they’ll pay the same attention for second-screen content. Already a feature called ‘X-Ray’ on Amazon’s “Instant Video” apps on Kindle Fire and WiiU can tell you who’s on screen at any time, allowing you to see other programmes they may have been in.

‘Zeebox’, an app for iOS and Android devices, currently works on linear TV and focuses more on social experience through integration with Twitter feeds.

Netflix is “innovating rapidly” with $350 million spent each year developing the service in reliability and upgrading the quality of content delivered. Even more impressively, $2 billion is spent on content-licensing and funding original shows like ‘House of Cards’ and ‘Hemlock Grove’, both of which have been critically acclaimed.

Through this original programming content is available internationally, overcoming the licensing laws which frustrate consumers. HBO’s “Game of Thrones” for example, is currently the most pirated series, most likely from viewers who cannot see the latest episode outside of the States.

From a great opening quote to the report, Netflix delivers a fantastic conclusion. “People love TV shows and movies. We love being the best possible place to enjoy them. Ours is an amazing opportunity to grow, innovate and lead for several decades.

“We know we will have great competition along the way, and we embrace the challenge.”

Does Netflix’s long-term plan appear sufficient enough to face competition? Is the provider investing enough in service expansion and original programming?

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