The future of TV has just arrived

Hollywood just isn't sure what approach to take with NetFlix, by Milena Popova

Image: CC-AT-NC-SA Flickr: aharvey2k (Aaron Harvey)

Netflix, the US TV and movie streaming service has been in the news rather a lot recently. It seems Hollywood can't quite figure out whether it should be embracing or trying to kill the company.

As Greg Sandoval points out, Netflix is posing significant commercial challenges to Hollywood's current business models and distribution channels. It competes - with astounding success - with channels as diverse as DVD sales, movie sales to airlines, and cable and broadcast television.

And why wouldn't it? I could fork out $10 for a DVD, of $8 a month for all the films I want to watch. I could fit my life around the schedule of the network that happens to carry my favourite show, or I could stream it off Netflix whenever it suits me.

As traditional distribution channels are currently more lucrative for studios, they feel threatened by Netflix. Yet, the popularity of the service, its rapid growth and the simple fact that it is able to compete on all of these fronts should give you an idea of where the future lies.

There is a legitimate concern here that Netflix will become sufficiently big and dominant in the market to start dictating terms - similarly to iTunes' role in the digital music market, or Amazon's when it comes to book selling. A monopoly like that wouldn't be good for the studios, and frankly, it probably wouldn't be good for consumers. Having said that, Hollywood studios and TV networks are hardly paragons of market competition themselves.

So one by one, the big TV networks and film studios are beginning to freeze out Netflix. HBO has been doing this for a while, but was recently joined by Showtime and Starz. Both are imposing delays on new original shows going up on Netflix. If these networks have their way, Netflix will become an outlet of the lowest-value, most dated content, and users will get bored with it, so Sandoval.

It is possible - even likely - that these moves will hurt Netflix, but they will probably hurt the networks a lot more. Because let's face it, I could fit my life around the schedule of the network that happens to carry my favourite show... or now that I've been left without a legitimate, paid-for way of getting my show whenever I want, I can go to the BitTorrent site of my choice, download it that way, and watch it when it suits me. Oh, and this way, I can keep it too, DRM-free, to watch even when I don't have a net connection! Oops.

At the same time, there has been another significant development for Netflix over the last few weeks.  They have just outbid HBO for David Fincher and Kevin Spacey's new original series, "House of Cards". Yes, you read that right, an online video streaming service is going to be producing original content. This is a game-changer.

If this experiment succeeds, Netflix will no longer be only a distributor of other people's content, reliant on studios and networks, they will be a big player in content production themselves. I suspect that even if this particular experiment doesn't succeed, the next one, or the one after that will - I doubt we can put that genie back in the bottle.

Combine this with news this month that Paramount is partnering with BitTorrent to release a movie online, and I think we've just seen the beginning of a paradigm shift in long-form video content, i.e. anything longer than a YouTube clip.

Indulge me as I engage in a little crystal-ball gazing for a minute. As we all know, film studios are already freaking out about piracy, mostly in the form of bootleg DVDs, though increasingly also when it comes to downloads. We haven't seen similar moves from TV networks yet, though torrenting TV shows is arguably everyone's favourite secret hobby these days.

We use it to watch shows when it's convenient for us, or to get access to shows not yet available in our particular geography. There has been some recognition of this threat, and so far networks have shown a remarkably sane and restrained reaction: the Lost finale aired at the same time on both sides of the Atlantic, and BBC America have finally decided to air Doctor Who on the same day in both the US and the UK. This way, both fans and the network win. Hopefully, we will see more of this.

However, I suspect we will also start seeing more of a crackdown on torrenting TV series in general. At the same time, we will hopefully see more experiments with legal online video content delivery. That may take the form of further original content commissioned by online distributors like Netflix, the industry's own experiment Ultraviolet, or something else no one's thought of yet.

I also hope to see a lot more crowd-funded independent productions trying to make the online distribution model actually pay. We as consumers have a powerful role to play during this exciting time. We can vote with our wallets and our feet. So let's make sure we encourage competition, discourage DRM, encourage independent productions, and encourage services which fit our requirements best, rather than those with the highest profit margins for the studios.


Milena is an economics & politics graduate, an IT manager, and a campaigner for digital rights, electoral reform and women's rights. She tweets as @elmyra


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By Milena Popova on Mar 30, 2011

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