Netflix is the £7.5bn company with 20m paying customers, which allows US viewers to download and stream movies on subscription. It takes content and provides an easily accessible platform from which viewers can access high quality content.
Netflix is THE product that the TV networks and film studios should have launched themselves. But they didn’t, and now they trying to figure out how to put the brakes on a runaway train.
But Jemima Kiss’ piece is interesting because it highlights the developments in broadcasting’s arms race – the ability to generate revenue from the growing audience on platforms other than the 42-inch screen plonked in the middle of your living room.
Back in the mid noughties while working on digital TV product development, it was apparent that technology was a necessary adjunct of the broadcasting business.
VoD was already a burgeoning market. The cable companies – latterly Virgin – had already started to invest in the technology, ITV were looking at ways of offering content on different platforms, via red button and mobile.
Out in front were BSkyB and the BBC. Sky has always seen a benefit in investing in technology. Its business is built on the foundations of its technology investments, from transponders and encryption to its EPG, and interactive services, web streaming and beyond.
The BBC had its own broadcasting Q-branch at Kingswood Warren (since relocated) which developed all manner of new tech, all aimed to improve the viewing experience and build and develop audience.
The point is that the recognition of the importance of technology, of new ways of delivering content has been around for years, but the difference in attitudes towards it can be seen in the consistency of the approach.
The likes of ITV have vacillated between the need to invest in mobile or the web, and Sky which has consistently poured resources into its platforms. ITV may have been built on content, but Sky has built its services around innovation.
Now with the growing maturity of streamed content, the battle will be similar. Between the content providers and those who learn to innovate, who invest in technology.
In the UK Lovefilm, SeeSaw and the BBC developed iPlayer, currently are the market for streamed web content but the article suggests it’s just a matter of time before Netflix starts to park its tanks on the pavement outside the TV HQ’s in London’s Gray’s Inn and Horseferry Roads.
What makes Netflix so attractive is the user interface, the recommendation engine, which links to other content, and the content. Its combination of technology, platform and willingness to spend on premium content to satisfy viewer demand is a compelling one.
Content is still king, a snappy UI does no harm either. Now with the news that it is also turning content provider after its deal to fund Kevin Spacey’s remake of House of Cards illustrates that it is also planning the next stage of its growth.
What was interesting is the quote in the Guardian article from BBC iPlayer developer Anthony Rose who says
“Success will come for the service that is pervasive across all platforms. It will be the guys who don’t try to strategically ‘own’ users, but who make good hardware with social connectivity so you can see what your friends are watching. That is what will drive content consumption far more that any closed platform.”
All of which makes you suspect that of the commercial broadcasters it will Sky that is best placed to stay with the challenge of the web-based usurpers. Technology and investment are a core part of both its long-term strategy and its DNA.
It knows the value of both technological infrastructure, after all, as it says its business is based on it – and of compelling content. For companies that have failed to grasp the value of technology and multi-platform, they could be about to hit some static.