Television is dead - long live Netflix

Cannes – how a branch changed

Most recently we could again come face to face with the death. From the 13th to the 24th May the “Who is Who” of the movie industry gathered in Cannes at the legendary film festival, where high heels are obligatory to women!  And because film isn’t only happening in the cinema or on television, the keynotes were dominated by topics like Crowdfunding, cinema or video on demand. Of course, Netflix with its stage hog Ted Sarandos, the content director of the company, had to be there.  Some hate him, while others actually make him the shining light, the saviour. He told the cinema industrie in nicely wrapped sentences that they don’t really have a choice besides his. Either they jump on the trend of streaming-service providers or they lie death underneath him. Simple message like Hobson’s choice. Backround for this is, that actually only one third of the totally streamed content are movies, rest are series. Sarandos intention of starting movies simultaneously in the cinema as well as on Netflix, definetly increased his rating as most hated figure.

A few facts about Netflix

Already founded in 1997 in california as online video store, Netflix is currently the biggest streaming service provider in the USA. All episodes of the award winning series “House of Cards” with Kevin Spacey, have been made available at the same time in 2013 for the first time ever which started a new era other streaming providers adopted. Even the so called “Binge Watching”, which started when the video recorders became available, reached a new climax.

In February this year started the 3rd season of the series which is by now produced by Netflix, at the same time the number of subscibers nearly trippled from the 3rd quarter 2011 up to the first quarter 2015 of up to 62,27 million. This means that about 20 % of the US americans are part of it. Only just started the service in Germany, forecasts already talk about 11,3 million subscribers in 2020. If this is correct, then the rest of the more than 50 TV- and video streaming providers have to wrap up themselves warmly. Besides - according to prognoses - up to 50% of the Germans are going to stream or download movies in the future.

As common with US companies the market value of Netflix is projected and communicated, at the moment this should be about 37 billion US Dollars. There was also a nice publicity gag that boosted Netflix equity mark to more than 600 US$ in the middle of May. Reason for this were rumors about Netflix conquering the Middle Kingdom. A nice joke. Imagine the old men of the political squad of the People’s Republic of China sitting in front of the TV and stream movies “made in the USA”. House of Cards is an old hat to the intrigue tested officials.

One more thing regarding market capitalisation. There was a German Company based in Munich in the DOT COM times (for the younger ones amongst us, it was about 15 years ago) that did not own any tangibles but among others the rights on the Muppet-show as well as the broadcasting of the formula one. Their market capitalisation was shortly even higher than Daimler. Daimler / Mercedes Benz is still living, the others disappeared in the underworld.

Netflix isn’t stumbling for words, thus, the Netflix boss Reed Hastings announced at the re:publica that they will be present everywhere on the world - excluding North Korea - by the end of 2016.

Are you still peering or already streaming?

If you believe Hastings then the classical TV dies up to 2020. As usual there are already studies confirming these statements. There is a 4 year old one from Cisco as well as an actual one of Bitkom, which only extends the death-struggle of the TV by 10 years. Even Roger Lynch, CEO of Dish, a US-satellite provider, who provides Sling TV, an App were 20 TV channels can be watched without having a cable or satellite contract, is of the same opinion. Understandable, as he’s in the same boat.

No secret and no sensation: the classical TV has to change. But these are no real new insights and we do not really need any US-guys who stage their PR-appearance to increase their stock value.

However the future will look like, which market shares are gained by streaming, and if the quality improves by being able to create user defined programmes, is to be questioned. I see the danger of excessive consumption of series and movies with all product placements, open and hidden buying requests paired with sacrificing living and real communication. There are already enough examples of private broadcasting stations, how the new world of TV-consumption will look like - Trash on every channel and at every time. Freedom looks different. Oh well, there was another thing. As long as the industry still offers the possibility to shut of the devices, you can still happily enjoy your private indipendency.