'TV is dead; long live Netflix!' Evaluate the relationship between live broadcast television and streaming services.

The ways in which media is made available and consumed has been on a constant shift for what seems like decades; whether it be the in-store rental business of Blockbusters, or online video-on-demand services, it seems that there are constantly newer and better systems for media consumption constantly lurking just around each new corner. With over 100 million subscribers and a net worth of 78 billion dollars - over 1.5 imes as much as 21st Century Fox - Netflix has undoubtedly asserted itself top of the video-on-demand mountain, and with over five million new subscribers in the second quarter of 2017 alone[1], it seems unlikely that the media giant is going anywhere soon.

Netflix originated as a mail0order DVD retal service in 1997[2] and its stratospheric rise to the world-renowned media giant it stands as today has been a result of several maojr strengths it holds over the typical live broadcast station. Firstly, instead of approving pilots and new series concepts based on viewership and metrics as a TV station would, Netflix allures show runners with the promise of an upfront contract for an entire season, guaranteeing the opportunity to tell a story that may not be viable while pitching to TV networks. Secondly, the nature that Netflix uploads series with - often uploading entire seasons of 12 or 13 episodes at once - encourages a nature of binge-watching that has become a stample of media to the point that many television stations have started to opt for the "binge" method of uploading, even at the cost of potential ad revenue. It's hardly a surprising decision; over 70% of U.S. consumers admit to watching an average of five episodes per session, thanks to the immediate availability a service such as Netflix provides.[3]

Even more unsurprising is that the demographics of Netflix subscribers is skewed heavily towards the younger crowds. A 2016 study found that 81% of people between the ages of 18 and 35 had access to and used Netflix.[4] Netflix's sheer dominance over the television market means that many younger people are foregoing television license fees altogether for what Netflix and other streaming services offer to them; after all, a cable subscription costs on average 61 cents per hour, while Netflix cashes in at a considerably cheaper 20 cents per hour of viewing.[5] TV services are scrambling to even attempt to compete.

So what does this mean for cable? Netflix seems to offer a considerably more varied library, even mining user data to recommend its subscribers more specifically tailored content, and abandoning the cumbersome adverts that break up normal television screenings, potentially saving its users up to 160 hours normally wasted on ad breaks.[6] Many cable services have rushed to offer similar on-demand streaming services and binge-watching opportunities that Netflix provides in an attempt to entice viewers who may otherwise drop subscriptions for an entirely on-demand lifestyle. Yet this still may not be enough - only half of TV viewing among 16- to 24-year-olds is now done through scheduled cable networks[7], with the rest opting to stream via on-demand and online services, including Netflix, Amazon, iPlayer and YouTube.

Things do not look good for traditionally structured television and cable subscriptions; recent research shows that cable could be in for a loss of as many as one million subscribers in the third quarter of 2017, the worst loss for cable on record, and setting the stage for an overall yearly decline of 3.3%.[8] Such news is surely disastrous for companies still placing their stakes in the classic cable network. The business is hemorrhaging viewers fast, and many cable services are struggling to play catch-up to the on-demand giants that are sucking up their former customers.

Of course this doesn't mean that Netflix will last - due to the amounts Netflix invests in original shows, the company is reportedly swamped in debt that could be as high as twenty million dollars.[9] It is very possible the Netflix bubble could burst within the next several years - the question is whether it will take traditional cable television with it.

Citations:

[1] - https://www.theguardian.com/media/2017/jul/18/netflix-tops-100m-subscribers-international-customers-sign-up
[2] - http://www.fundingunvierse.com/company-histories/netflix-inc-history/
[3] - http://variety.com/2016/digital/news/binge-watching-us-study-deloitte-1201737245/
[4] - http://exstreamist.com/81-of-those-age-35-and-younger-have-a-netflix-subscription/
[5] - https://news.slashdot.org/story/16/07/27/0046200/subscribers-pay-61-cents-per-hour-of-cable-but-only-20-cents-per-hour-of-netflix?utm_source=feedly1.0mainlinkanon&utm_medium=feed
[6] - https://www.digitaltrends.com/home-theater/netflix-streaming-commercial-hours/?utm_source=feedly&utm_medium=webfeeds
[7] - https://www.theguardian.com/media/2015/jul/02/young-people-live-tv-bbc-iplayer-youtube-netflix
[8] - http://uk.businessinsider.com/cable-tv-subscriber-losses-q2-chart-2017-6
[9] - http://www.nme.com/news/netflix-is-reported-to-be-20-million-in-debt-2119663