Netflix disrupts networks w/ ad-free original content
When Netflix released it’s newest original series Sense8 on June 5th ad-free, it continued to change the landscape of entertainment. Created by the Wachowskis and J. Michael Straczynski, the stylish thriller is about eight strangers scattered throughout the globe who discover they’re linked telepathically after they see a violent vision.
The series is comprised of an internationally diverse cast, which is rather innovative for North American television. In addition to Chicago and San Francisco, the Netflix production rolled on location all over the world, including London, Berlin, Iceland, Mexico City, Mumbai, Seoul, and Nairobi. With the exception of HBO’s Game of Thrones, Sense8 is probably the only show on television today with as many production locations.
Netflix can break the rules because it’s been rewriting the TV business model from the beginning, and perhaps more importantly, it’s been extremely profitable in doing so. According to Variety, during primetime internet usage periods Netflix accounts for 36.5% of all downstream bandwidth in North America. The No. 1 video-subscription service takes up more peak bandwidth than YouTube (15.6%), Amazon (2%), and Hulu (1.9%) combined. While ad-free Netflix didn’t release how many customers are streaming content during primetime, as of April 2015 Netflix has 40 million subscribers in the United States. That adds up to, and please pardon my French here: beaucoup revenue.
Increasingly, Netflix subscribers are choosing to cut-the-cord to cable or satellite TV packages entirely, opting to cancel their expensive bundled packages in favor of Netflix alone or a combination of digital subscription services. This trend is growing as a recent report stated 51% of Millennials use Netflix, and many will never buy cable when they move away from home.
Now that Netflix is also a major movie studio and distributor, there’s never been a better time to be an entertainment consumer. In addition to Netflix and all of their original content (with 45 Emmy nominations total), HBO Go, HBO Now and a number of other digital services will continue to disrupt the entertainment industry.
The question is:
How will traditional media and brands adapt to a model that’s trending towards being the preferred choice with consumers?