The Netflix effect: how Online Streaming Services are changing TV

Netflix, the popular online streaming service, announced that it added slightly less than 1.7 million new subscribers during the second quarter of 2016, despite a forecast of 2.5 million new users. The growth in last year’s same period was about 3.30 million. This slowdown is due in part to its recent price increase that caused a lot of subscribers to sign off. Netflix, which literally has changed the way we watch TV, is – in fact – facing growing competition on the SVOD (Subscription Video on Demand) front from tech firms like Amazon (Prime Video) & YouTube (Red) and traditional TV networks such as Time Warner, HBO, CBS and NBC, which have added internet streaming services to their cable and broadcast offers.

Streaming video currently represents over 60% of all Internet (mobile and fixed) traffic and some analysts predict that it will grow to 85% before 2020. In the US, 70% of families watch TV shows and movies online, with 64% paying for the content. In a few years the way we watch “TV” has changed radically and it is interesting to note that the same video streaming universe is already heading for some changes of no small importance.

Original programming and binge watching

The original programming, namely the shows and series created and produced specifically for online channels are becoming mainstream success and attract more and more talents. When Netflix’s House of Cards debuted, it represented a new format in how TV content is produced and delivered. Moreover, the very essence of the online streaming service has allowed Netflix (and later its online competitors) to release the entire series at once, offering customers something that traditional TV channels could not offer: let people watch “what they want, when they want it”. This has boosted the phenomenon called binge-watching (the practice of viewing multiple episodes of a TV series consecutively) and has given the audience total freedom in the use of the content – without the constraints of a broadcast schedule – and changing the approach to the tv series and its characters.

binge watching

Broadband data caps

Before the rise of video streaming very few people consumed large amounts of data with their home broadband: however, things are changing and the massive diffusion of online movie and TV streaming services is forcing internet providers in putting caps to their broadband plans. Comcast and AT&T have started to change their offers setting relatively high caps (1 Terabyte): a TB is still an enormous amount of data (about 700 hours of high-definition video per month) but as streaming video quality improves (4K?) and it gets joined by Virtual Reality and Internet of Things devices, it is likely that this limit will be reached very soon. We must not forget that the major ISPs also operate as cable providers: adding data caps lets them to recoup Pay tv revenues they lost due to the rise of online services.

Fast-Forward watching

Since 2009 the number of scripted tv series has nearly doubled, mostly thanks to streaming services like Netflix and Amazon. How do we deal with so much TV? Someone has found the solution starting to watch television in fast-forward as some softwares have made it much easier to watch videos at 1.5x to 2x. Over 100000 people have downloaded a Chrome extension that accelerates streaming videos and the reviews are enthusiastic. According to Jeff Guo, reporter for Washington Post magazine, thanks to fast-forward “I can see an entire season of Game of Thrones in a five-hour train journey” furthermore “acceleration makes viewing more pleasurable. […] The faster pace makes it easier to appreciate the flow of the plot and the structure of the scenes”.

From one point of view the technological evolution allows us to treat the TV series the same way as books: thanks to broadband and computers we can enjoy TV content when we want, at the speed we want and how we want; possibly jumping, rewatching, speeding up or slowing down some parts. Once overcome the technical limits, the only barrier will be our taste in “living” the stories that others have written for us.