Netflix and the television industry
Pay and Free to Air Television costs  for progamming by way of paying for content , especially with long term output deals shoring up guaranteed revenue for years ahead, continues to be the icing on the cake for studios, independents and distributors .
In an article in Smart CompanyPatrick Stafford makes an interesting commentary.
See the full article here
http://www.smartcompany.com.au/information-technology/054038-best-of-the-web-how-netflix-plans-to-blow-up-the-television-industry.html?utm_source=SmartCompany&utm_campaign=c69d72e605-TechCompany_7_February_201307_02_2013&utm_medium=email
“But the television industry is changing rapidly. As users demand content more quickly and in different formats, piracy has increased – and traditional studios are still trying to keep up.
Meanwhile, users are already fed up with being forced to wait for content. Australia has one of the highest rates of piracy per capita in the world.
But there are a few companies trying to change this. At the heart of this transformation is Netflix, the American online DVD rental and streaming company. Not only has the business changed the way people view television by allowing web streaming, but it’s just invested $100 million in a new TV show starring Kevin Spacey.
It’s trying to become the internet version of HBO.
In this piece at GQ, the publication looks into what Netflix is actually doing to the television industry, and how it’s going about transforming the way people view content. Chief executive Reid Hastings puts it simply:
“The traditional entertainment ecosystem is built on it, and it’s a totally artificial concept…The point of managed dissatisfaction is waiting.
“You’re supposed to wait for your show that comes on Wednesday at 8 p.m., wait for the new season, see all the ads everywhere for the new season, talk to your friends at the office about how excited you are.”
That method is dead, Hastings says. It’s exactly why Netflix just put every episode of its $100 million new show online at once. Given the way people are viewing entire seasons of television in just a few days, he says, it makes sense to put that content online at once.
In fact, that’s how Netflix plans to become the next HBO, he says.
Hastings describes his plan to make Netflix bigger than it is now. It’s the same methodology used by YouTube channels – people want content immediately, not next Thursday at 7pm.
All of this is made more fascinating by the fact Netflix had a shocking 2012. Hastings split the business into DVD and streaming arms, then charged more for the privilege of using both. Customers hated it and the share price plummeted from $US300 to a low of $US77.
The piece delves into some quirky parts of Netflix culture, including its famous constitution called the Culture Deck. It’s well known among executives – even Facebook chief operating officer Sheryl Sandberg said:
“It may well be the most important document ever to come out of the Valley”.
Some of the best parts? No limit on holiday or sick days, and no one tells you when you clock on or off. Hastings even says he has no idea how much vacation time his people take.
Even more remarkable? Hastings doesn’t even have an office.
It was only a matter of time before a company like Netflix figured out how to change television for the better (or worse). Although Hastings may have had a bad few years at the helm, it seems the company is on the precipice of changing the way we watch TV”


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