Life after television
Published 15/01/2012 | 06:00
As Netflix launches in Ireland, Ed Power explains how the internet will soon rise up above the goggle box
A quietly spoken American with careworn features and a vaguely professorial air, Reed Hastings doesn't look much like home entertainment's answer to the anti-Christ.
But if you are an executive at a major television network, you may well view him in those terms.
In fact, the ever more dramatic success of his company Netflix may well keep you awake at night.
As founder of the world's largest movie and TV streaming service, he has, in essence, devoted his professional life to demolishing traditional forms of mass media consumption -- not that he would necessarily see it that way.
In the US, Netflix has helped render the bricks and mortar video library redundant and may be close to killing off the DVD (sales are down 20pc year on year, and the rate of decline is accelerating).
Now Netflix has come to Ireland and, should it prove as popular as Reed believes, the impact on the way we watch television may be profound.
"Internet television is going to be very transformative," says the understated chief executive, installed in a suite of Dublin's Westin hotel, where he is publicising the launch of Netflix here (it is offering an all-you-can-eat streaming service for €6.99 a month).
"It's like the mobile phone compared to the landline. We've had broadcast television for 60 years now. With the internet you click and watch.
"Over the next 20 years everything is going to become click and watch and on demand -- sports, news, TV shows. We'll still have broadcast -- after all, we still have landlines. It just won't get used very much," he adds.
What he is talking about is biggest revolution in television since Simon Cowell came up with the idea of sticking wannabe popstars on prime time and watching the millions roll in. With the advent of internet streaming and video on demand, the barnacle-encrusted concept of 'appointment' viewing looks to be on the way out.
Soon, consuming television may become a solitary pursuit akin to reading a novel or listening to a favourite record.
Subscribe to Netflix and you can watch old seasons of 'Dexter' and 'Breaking Bad' and movies such as Scorsese's 'The Aviator' and cheerfully ignore whatever is on RTE or BBC.
Why is this happening now, when the internet has been around for 20 years? There are several reasons.
First, TV manufacturers are finally becoming of aware of the possibility offered by web access. Most top-end TVs now include Wi-Fi as standard. Within a decade, it is believed half of all televisions sold will be internet ready.
Rather than having to muck about with an intermediary device such as the Apple TV unit or a games console, ever greater numbers can access the web straight from television.
Furthermore, it has been demonstrated that there is a vast audience for the services offered by Netflix and similar companies.
The first indication that people were prepared to use the internet to watch television came when Apple started offering old shows for download on its iTunes service.
Nobody expected much to come of this, so there was surprise when mid to low-rating comedies such as 'The Office: An American Workplace' and 'Arrested Development' received a huge ratings bounce from people watching via iTunes long after the shows had aired.
It dawned on the industry that catch-up television was a huge, potentially very lucrative, market.
Meanwhile, television itself has changed, too. At the risk of generalising, the medium has divided between the super high-brow and ultra low-brow, with very little in the middle.
So even as TV drama has increased dramatically in quality, with shows such as 'The Sopranos' rivalling or surpassing anything available at the multiplex, terrestrial broadcasters have steadily dumbed down, giving viewers an endless spew of 'Jersey Shore'/'Big Brother' retreads and rip-offs.
When we speak of 'appointment TV' nowadays, we usually mean junk-food reality programming.
"Television has become much more about live events, sports, competition shows, reality -- these are things that broadcast serves very well," said Ted Sarandos, Netflix chief content officer (it was Ted who helped convince Kevin Spacey to star in a Netflix exclusive remake of British political drama 'House of Cards', due to air in 2012).
"However, once the culture knows the outcome of these events, it becomes very short shelf-life content. We've been very successful with shows such as 'Mad Men'. The most watched episode of 'Mad Men' on Netflix yesterday was episode one. People are still discovering these shows. That's where our market is," he adds.
In this part of the world, Netflix sees Sky as its chief rival. You can, after all, 'rent' movies on demand at Sky Box Office, paying €5.75 to stream a film through your set-top. And Sky Atlantic is dedicated to the same critically lauded scripted programming that Netflix places such a heavy emphasis on.
Over the long term, though, the service's biggest competitor may well turn out to be YouTube.
At first glance, this might seem a farcical proposition, given so much of YouTube is given over to LOL-tastic cat videos and pop promos. However, the company, owned by web giant Google, is eager to turn a profit, which means graduating from novelty shorts.
With its new partner programme, it has started selling advertising against 'channels' dedicated to its most popular home-grown stars: video bloggers, mash-up artists and 'sit down' comedians (stand-up comedians wise-cracking into their webcams).
The sheer number of people watching YouTube -- it has 800 million unique visitors monthly -- means there is a lot of ad revenue sloshing around.
Expect that figure to jump as web-enabled televisions make it easier for us to watch YouTube in our living room rather than hunched at a computer.
If Netflix and YouTube pose a threat to broadcast television, then they arguably sound a death knell for DVD and its high-definition big brother Blu-Ray. In the US, the bricks and mortar DVD rental market is in precipitous decline and indications are the Irish sector may not be in rude health either.
"Netflix has had a profound effect on the video-rental business in the US," Stephen Shankland of IT news-site CNET tells the 'Irish Independent'. "It has accelerated the demise of the once-powerful BlockBuster video-rental chain. I expect it to have a similar effect elsewhere.
"Netflix rightly sees the future is streaming video. Broadband data-transfer speeds are improving steadily, particularly in urban areas, and it's hard to beat the immediate gratification of watching a video when you want immediately after clicking a few buttons."
Stephen points out that you don't have to plan in advance as with DVD by mail, and you don't have to move the couch potato from the couch, as with bricks and mortar stores.
"The price is compelling, too," he continues, "and Netflix has extensive partnerships with device makers to build Netflix abilities directly into many of the electronics products people use to watch TV.
Stephen adds: " Netflix may not be the company that does in the corner video store, but somebody will. Apple iTunes, Google video rental, Amazon and Lovefilm -- there are big players involved here, and TV and movie studios are cutting deals to make the internet a prime distribution medium of the future."
Darren McCarra of Irish tech site 'The Sociable' believes movie and video-game rental outlets have been dying-out for some time now. "The arrival of Netflix on our shores will accelerate this process. As the delivery system of media content changes to one of convenience, physical DVD rental stores are becoming increasingly irrelevant.
"This itself has been aided by both the increase in connected devices, like internet-enabled TVs and tablets, and adequate broadband."
Still, Netflix's dominance is not assured, says Darren. In Ireland, our comparatively poor broadband may be an impediment.
Still, in a global context, who would bet against Reed Hastings' company hastening the demise of DVD and the entire concept of video rental?
Twenty-two years ago, this former software engineer dreamt up the idea for Netflix -- which initially rented customers an unlimited number of DVDs through the post for a fixed monthly charge -- after falling into a panic over the bill for an overdue VHS tape.
"It's true," he laughs. "And I owed a big fee. Forty US dollars. It drove me nuts. It was all my fault. I remember not wanting to tell my wife. It stuck with me.
"When a friend told me about DVDs in 1997, I thought, 'wow you can mail these things'. I posted a bunch of them," he explains.
"None of them broke. And that was the start of Netflix."