Video-on-demand has changed the face of the entertainment industry, with more and more people wanting their entertainment instantaneous and with the convenience of an online library at their fingertips. Netflix in theory seems like the perfect way to watch your favourite films and movies, but at what cost?
Netflix were one of the first companies to seize the entertainment streaming market. In 2010 they shifted towards the current service and had amassed more than 20 million customers. As of January 2016, Netflix has 75 million subscribers.
Netflix’s dominance in Australia is interesting when put in the form of a bar graph
With this recent shift towards streaming services, it is important to remember the negatives, including the effects on local film industries, DVD sales, and stores which sell films and television programs as their primary product. For example, the recent plan to shut down all of ABC’s brick and mortar stores comes as a direct result of changing consumer preferences. DVDs were the broadcaster’s main product in store, and as people are using alternate services, such as Netflix, sales have dropped making the physical stores not worth operating from a financial standpoint. A follow on effect is the loss of jobs from retail workers, and those involved with the production and sale of DVDs.
Another example is JB HI-FI, who have recently branched into the sale of whitegoods in a number of locations. This could be due to the same reasons as stated previously. The primary business model of selling DVDs is becoming obsolete, so JB HI-FI are attempting to dive in to another market.
Local film industries are also greatly affected. Those with Netflix may choose to entertain themselves by watching films or movies online, whereas 10 years ago they would have watched a movie in the theatre. Furthermore, small independent theatres are feeling the effect of streaming services. The decision to bring new release movies to streaming services at the same time as a theatrical release is a threat to one of the cinemas major draw cards – the exclusivity of new movies. A recent example of this was when the Weinstein Company partnered with Netflix and IMAX to broadcast Crouching Tiger, Hidden Dragon: The Green Legend exclusively. This is an obvious threat to small and independent cinemas.
But is it Netflix’s fault for these problems? In a money orientated marketplace I can understand the aim of conquering the market share. Their formula is currently the best on offer. Instant access to film and television is what everyone wants these days. Blockbuster, for example, were too slow to adapt to the changing market, and their business collapsed. It’s something to think about the next time we decide to watch a movie.
Kevin McDonald – Digital dreams in a material world: the rise of Netflix and its impact on changing distribution and exhibition patterns
‘Could Netflix Kill the Movie Theater Industry?’