Duncan Potter
Senior Vice President, Global Marketing at ARRIS
Netflix recently turned 20 years old. As it leaves its teenage years behind, it's fascinating to think of the many ways that this one company changed our relationship with entertainment.
Perhaps the most impressive thing about Netflix is the overwhelming disruption that it has already caused. We're now accustomed to breakthrough technologies – the TV, the internet, the smartphone – upending several industries at the same time. Rarely is it, though, that a single company has the same impact.
Starting with its humble beginnings as a movie rental service, Netflix presented a growing and ultimately fatal threat to brick-and-mortal DVD retailers. Unable to compete with Netflix's offering of cost and convenience, the industry receded from main-street.
Change Comes to ISPs
As Netflix's streaming offering evolved, internet service providers – or ISPs – were next in line to see their industry change. Video streaming presented a double-edged sword for ISPs. On the one hand, the primacy of streaming stimulated the demand for faster internet connections. On the other, Over the Top (OTT) video, or IPTV, ballooned the flow and volume of data that service providers had to process.
Unlike DVD retailers, however, service providers were well-positioned to address – and in many cases, benefit from – the rise of streaming. First, they continued their network investments; adding bandwidth and offering faster speeds, and they provided their customers with stream-ready network hardware. These upgrades remain ongoing – with many service providers now rolling out gigabit broadband connections.
Second, many launched streaming services of their own. For instance, AT&T launched DIRECTTV Now while Verizon debuted go90TM. Some, like Liberty Global and Comcast, chose to imbed Netflix into their own service.
Netflix wasn't the sole instigator of this change, of course. Competitors like Amazon Prime and Hulu also deserve some of the credit. But as the most popular service – now with some 104 million subscribers worldwide – Netflix led the charge.
Netflix, the Studio
But the disruption didn't stop there. Rather than stay a virtual conduit for pre-existing content, Netflix diversified into producing its own shows. In 2013, Netflix premiered the riotously successful House of Cards, which was quickly followed by the equally popular Orange is the New Black. Suddenly, Netflix had changed more than just the apparatus of television, it had changed our requirements of entertainment. Instead of watching shows that were serialized linearly over the course of a season, TV viewers wanted to 'binge-watch' and consume as much as entire series in one sitting.
The success and pervasion of the Netflix blueprint has meant that OTT is now table stakes for video content distribution, and almost everyone is in on the act. TV networks have their own streaming services and have shipped much their back-catalogues to the cloud. Even YouTube and Facebook have unveiled their respective live video services. Meanwhile, traditional TV remains a preference for many consumers.
The Next 20 Years
In light of its 20th birthday, we should certainly thank Netflix for the quality, variety and accessibility of content that is now on offer. Of course, it's also important to remember the role that technology has played. Innovations across the networking ecosystem are what ultimately permitted the rise and advancement of OTT content.
As we've already seen, Netflix isn't afraid to try and change our consumption of entertainment. Thinking of the networking technologies just around the corner – Fiber Deep, DOCSIS® 3.1, faster home Wi-Fi® – we can expect Netflix to take advantage of these new possibilities and continue its disruptive streak. It won't be long, I imagine, before Netflix mainstreams immersive VR content or streaming video games and other highly-interactive material.
Given all the innovations and ideas yet to come, we should all look forward to a bright future for streaming and online content.
