Running head: Effects of the Streaming Video Age 1

Effects of the Streaming Video Age:

A Study on How Netflix Changed the Movie & TV Industry

Jade Childs

North Carolina A&T State University

Abstract

“Cutting the Cord,” is a new global phenomenon. The phrase refers to a pattern of media

viewers cutting their cable cords, by cancelling their subscriptions and opting streaming services

instead. Netflix is largely to blame for this impactful change to the media industry. This paper

explores five published articles, that explain how Netflix has changed the tv and movie industry

indefinitely. It will explore how the “Netflix-Effect” will impact the future of the industry. As

more people start to “cut the cord” there is a fear that cable networks will become obsolete and

streaming services will become the new normal. This paper complies the data from multiple

published articles to show how Netflix has changed film industry, why these effects are

significant and to predict what this means for the future of Hollywood. What this paper also

concludes that cable tv will not become obsolete, but it will need to change its ways in order to

compete with video streaming networks.

Effects of the Streaming Video on Demand (SVOD) Age: A Study on How Netflix Changed the

Movie & TV Industry

As mentioned earlier, people are “cutting the cord” on cable tv, opting for streaming

service and HD attennas instead. Streaming services cost less than traditional cable and the

customer controls their media content, making the service more personable and favorable for

customers. According to Steph Grassullo, a reporter for PopInsider.com, A big selling point for

SVOD is the that the platforms are unique from user to user. Whereas cable TV is designed for

the masses, streaming services let viewers choose what to watch from a large portfolio of

content, and then streamline it to cater to each specific user. (Grassullo, 2018) This is a major

selling point for streaming services, users can custom create their own networks, which tailor to
Effects of the Streaming Video Age 3

their interest. Meaning they no longer have to stroll through hundreds of tv channels trying to

find something entertaining to watch. Instead they just need to open their video ques and choose

their entertainment. In addition, to the ability to custom create their own personalized ques,

streaming services consistently suggest content that it believes the user will enjoy. Netflix uses

algorthms to keep track of what people are wathing, and they use that information to promote

other similar content available.

Netflix Disrupts “The Industry”

Since August 29, 1997, Netflix has been revolutionizing the way we consume media,

changing the way we entertain ourselves forever. Subscriber watch whatever they want,

whenever they want, on nearly any device. The company officially launched on April 14,

1998, renting dvds through the mail. On January 15, 2007 Netflix changed the way we

view entertainment at home by introducing video streaming to its public, allowing its

customers to skip the hassel of waiting on videos to arrive in the mail. As CEO Reed

Hastings once said, Neflix was thought to be the future of movie rentals, but it was

actually the television industry that the company utterly disrupted. The ease and

accessibility of online video now poses a grave threat to the standard model of television

programming and is rapidly pulling subscribers away from cable industry. More and

more, consumcers are ditching other telivison providers and turning to the web for their

viewing pleasure. (Hastings,2018)

Hastings isn’t just bragging with his statement above, his comment is factual.The

number of cable and television subscribers has dropped drastically over the years, because media

networks cant compete with Netflix. Netflix has no commercials, it costs one of a quarter of what
Effects of the Streaming Video Age 4

cable does, there is no waiting for certain times for shows to come on, the videos are available

instantly and over many different platforms. As Beliefnet.com put it, You can flop onto your

couch and binge-watch, a concept which didn’t exist before Netflix. (Beliefnet.com,2018) “All

The Boys I’ve Loved Before” director Susan Johnson recently said in an interview, “Netflix have

an advantage, in that they can se what viewers are looking fro. They’re 24/7, they have teams

everywhere literally looking for what people are searching for.”

Netflix VS Cable Companies

In 2011, Netflix beat out major studios such as HBO and AMC for the rights to the show

House of Cards, proving that it was no longer just a streaming service for other peoples content,

but a full fledge studio in its own right. Netflix continued producing top notch productions such

as Orange is the New Black and Stranger Things, which began winning emmys and proving to

major cable companies that Netflix was a true contender. Tv showrunners began to view Netflix

a s aplace where they could take risk, and a even bigger bonus was Netflix is able to spend more

on their content than cable networks. The amount of money Netflix spends to produce their

content is moving the needle for the entire tv industry, there are now realizing that they will have

to spend a lot more money on their content, if they want to compete against Netflixs content. As

Lanre Bankare, reporter for “The Guardian” stated, “Netflix’s impact on how we consume

television is unavoidable. The TV landscape is littered with streaming sites now, all competing

with traditional TV and Netflix. Its hard to imagine television without Netflix.”
Effects of the Streaming Video Age 5

Netflix and Its Audience

“Binge watch” and “Netflix and Chill”, two commonly used phrases in pop culture, that

didn’t exist before Netflix. Netflix is a major part of pop culture. “Netflix and Chill,” describes

the way todays youth date. Why spend a lot of money going out, when you can stay in order take

out and stream tons of movies at home on the sofa? “Netflix and Chill,” is a cheaper dating

option.

Binge watching is another cultural phemonemon that Netflix started. As Hastings said, “

With episodic content, especially serialized, its so powerful to have all the episodes at once. And

it something that linear TV can’t do. Now viewers can watch at their own pace.” This was one of

Netflix most innovative and strategic moves, allowing the user to have control over how much

content they want to watch in one sitting. Netflix also got writers involved to help promote binge

culture. In the past writers had to focus on writing cliff hangers throughout tv episodes to keep

their audiences ins suspense throughout the commercial breaks, but now they don’t have to.

Writers intentionally put the cliff hanger at the end to entice their audience to continue watching.

Creating the never ending cyle of enteraintment that the concept binge—watching was created

upon.

What Does This Mean For the Entertainment Industry

DigtalBrew.com explained, The viewer can watch at their own pace, the entertainment

industry is becoming fragmented as a result. The power is in the hands of the consumers, and

consumer want convenience, personalization and affordability. To meet the needs of the

consumers, streaming services and cable netwrks alike need to constantly be on the forefront of

technology and embrace it where its due.

Many of broadcasters are heading this warning as the realize that streaming is the

preferred method for their consumers. Many media gants are embracing techionoly, and offering

streaming models of their own. Companys like HBO, The CW, Fox and ABC have launched

their own streaming servives to allow their customers to stream there content in their own time,

and any mobile device. According to, , television networks are doing just fine. Cable networks

are learning how to adapt to the changing times and keep ujp with their competion. While most

of the networks advertising revenue is remaining stagnant at the moment, cable still has a place

in our society. The biggest takeaway here is theat the poer is in the hands of the consumers.

Conclusions

In order to truly encapsulate the terrestrial broadcast radio industry’s current state, one

must take into consideration multiple facets of the industry. While it is simple to assume that

smartphones and the internet as a whole are causing the end of broadcasting’s dominance, further

research shows that the industry is merely adapting, not ending. Programming that embraces and

adapts to technological change have received continual popularity due to building communities

with their listeners, and encouraging expression of opinion. Talk radio has accepted the

formatting styles of their online counterparts, and seen success through political discourse as

well. The music industry within broadcast radio shows are more grim future. However, if the

struggling industry adapts to the practices that have made talk radio prosperous, it is possible that

the business as a whole could rebuild.

References

Baines, W. (n.d.). How Netflix Changed Entertainment. Retrieved from

https://www.beliefnet.com/entertainment/how-netflix-changed-entertainment.aspx

Bakare, L. (2018, July 21). Netflix has forever changed the way we consume television | Lanre

Bakare. Retrieved from https://www.theguardian.com/media/2018/jul/21/netflix-gamble-

original-content-changed-way-consume-television-forever

Grassullo, S. (2018, May 23). How Streaming Changed the Entertainment Industry-and our

Lives. Retrieved December 3, 2018, from https://thepopinsider.com/features/streaming-

services-changed-the-entertainment-industry-ways-people-watch-tv/

(Grassullo, 2018)

Hastings, R. (n.d.). Reed Hastings: How Netflix changed entertainment -- and where it's headed.

Retrieved December 3, 2018, from

https://en.tiny.ted.com/talks/reed_hastings_how_netflix_changed_entertainment_and_wh

ere_it_s_headed

(Hastings,2018)

How Video Streaming is Changing the Entertainment Industry. (2017, January 02). Retrieved

from https://www.digitalbrew.com/video-streaming-changing-entertainment-industry/