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How Netflix and Cable Brands are Changing the Way We Watch TV

By Edited Aug 30, 2015 2 4
Streaming Media
Credit: TiVo mjpyro

When I was a kid, one of the things we looked forward to every year was the Fall Preview from TV Guide. It highlighted all of the new shows that were coming to network tv, and much like the JCPenney and Sears Christmas Catalogs, it was always anxiously anticipated.

That publication is practical non-existent now, but back then it was the primary source of  entertainment news and television schedules for millions of people. There were no apps or internet or On-screen Channel Guides to pull up. It was either the TV Guide every week, or the free one that came in the Sunday paper.

That was golden age for television networks and production companies. Before the age of VCRs, DVDs and later, Digital Video Recorders (DVRs), we were a captive audience. The networks set the ad rates and controlled everything we watched. And since there were no recording devices, you had to watch everything in real time, and thus sit through all of the advertisements. Marketing could not have been happier.

But then technology began to change the way we watched tv. Devices such as VCRs became instruments of time displacement. No longer did you have to stay home to see the latest episode of Dallas, you could record it on a clumsy VHS tape and watch it later.

For those of you that are too young to remember this, or were not even born, I cannot tell you how magical this was. It changed the way we watched tv.

Eventually the industry and advertisers had to adjust. By the end of the 90s, the first DVRs were appearing and TiVoing became synonymous with recording digital programing.

Soon internet based companies emerged  promising to stream content online to us all as more and more people adopted broadband internet connection over dial-up access.

Enter Netflix

When Netflix was first started in 1997, it was primarily a DVD mail order rental company with limited streaming options.[1] Not only was access to content an issue, but simply getting it to potential consumers was more of a road block. Broadband connections were not prevalent in the United States in the early 2000s.

It is worth noting that around this time, Netflix offered to sell itself to Blockbuster Video for

Netflix Streaming Movies
$50 million.[2] Blockbuster declined. Only one company is still in business.

As the decade continued, it became more ubiquitous and as the adoption rates of broadband grew, so did companies like Netflix and Hulu.

Now Netflix is becoming the company that it always wanted to be: a streaming content provider. They are slowly but surely removing themselves from the mail delivered DVD service. In fact, in May of this year, they quietly discontinued Saturday DVD delivery and no one really noticed.  I would not be surprised if that service exists in 5 years, if not less.

Companies like Netflix, Hulu Plus and the numerous cable network channels that are included in expanded basic coverage are changing the way Americans receive and watch their entertainment in the home. Cord cutting from cable or satellite monthly bills is becoming increasingly popular, statistics that the giant cable and satellite providers attempt to keep a lid on.

However, with quarterly earnings reports to Wall Street, the stats do not lie. They are losing subscribers, particularly younger Americans, who are opting for internet access only and paying for streaming content from Netflix and Hulu and receiving their local HD channels over the air for free. Look for this trend to accelerate in the next decade in much the same way as the local phone companies have been losing subscribers as more and more people opt to go with their cellular phone service as their primary line.

I recently finished a month of binge watching various shows on Netflix. Over the last several years I have subscribed to Netflix twice a year, usually during the summer when network programming slows down, and in the dead of winter when shows go on a six week hiatus.

While I am not ready to cut the cord completely, it is becoming more and more tempting given the amount on content available online for a reasonable subscription fee, or free altogether.

Streaming services have also altered the way I think about watching television.

For instance, I

mentioned Tivoing content to watch later, however, after watching Netflix for a while, I find it rather annoying to manually fast forward through commercials on anything I have recorded. Imagine that. What was once considered a marvel of technology is now a nuisance.

Yes, we have become a bit spoiled I guess, but honestly, I have gotten to the point that I would rather pay a small fee every month than be forced to watch, or fast forward through, paid advertisements on television. That change in attitude supports my central thesis that internet television is altering the way we watch television.

Netflix streaming content is one of the best deals around. For a month, you can stream unlimited movies or tv shows for $7.99, with various additional fees for such things as other mobile devices.

Netflix continues to raise prices by a dollar or two, but legacy customers are locked into the old rates. Honestly, the streaming service is worth double that, but I hope Netflix doesn’t realize that any time soon.

Up until this point, I have not been a consistent monthly subscriber. Typically I could get my fill of it after a month and then let it build back up with new content that interests me over the next six months or so. My most recent stint was after a yearlong absence and I uncovered some gems that I had missed out on the first time around on network tv.

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Emerging New Content Sources

AMC Studios
Credit: AMC Network

However, it is not just Netflix that is changing how we watch tv, it is also the changing landscape of the content creators. I don’t know if you have noticed lately but most of the best dramas and entertainment on television right now are on cable networks like FX, TNT and AMC Network.

For instance, until recently, AMC had the three best shows on tv in my opinion: Breaking Bad, The Walking Dead and Mad Men. That is not just my opinion, the Emmy Awards agreed. How did this happen? This is the American Movie Channel channel after all.

In order to survive, these cable brands had to morph into something else over the last decade. That is why you see things like Pawn Stars and American Pickers on The History Channel. What do those have to do with history?

Well, I suppose you could make a case that they are loosely associated, but I don’t know how you get to that association with something like Hoarders on The Learning Channel.

But just like in writing online, content is king, and these channels had to adapt in order to survive. The channels became more than their original concept. They became brands.

Online Streaming is Giving Content a Second Chance

Have you ever started to get into a series only to have it cancelled after one season?

That is surprisingly common with television. Cancellation rarely has anything to do with the actual quality of the show. Some shows are behind the eight ball before they begin, placed in impossibly competitive time slots. Most are on a short leash right out of the gate.

However, a lot of these shows are getting a second life on Netflix. Shows such as The Killing was never a huge hit while it was on the cable networks, but has become one of the most popular downloads on Netflix. In fact, the company bought the rights to complete a fourth season which was released in its entirety on August 1, 2014.[3]

Other shows like 666 Park Place which was cancelled after just one season, is getting a four out of five star rating from Netflix viewers. With online streaming, content is not judged the same way as the old network advertising model, so we the audience benefit now that the Hollywood and network bean counters are out of the way.

Why are Cable Networks Producing Better Content?

AMC TV The Walking Dead
Credit: http://www.amctv.com/

Cable channels have an advantage over network television. They can be more edgy, in that they can use language that would be deemed unacceptable on ABC, CBS or NBC, and show nudity, at least to some extent.

They also are judged as successes at a much lower bar. I recently read an article about the NBC series Hannibal. This is loosely based on the Silence of the Lambs series and offers a sort of prequel setting. It is very creepy. In fact, I have commented several times to myself while watching it that I could not believe this was on network tv.

In the article I read, the head of NBC was talking about how the show was very good and creative, but that it was struggling to find an audience. He also mentioned that if it was on one of the cable channels, it would be considered a hit with four to five million viewers a week. However, with that number in a network primetime spot on a Friday night, it was on the bubble.

How can networks compete with looser restrictions on appropriate content and lower viewership expectations than what the major cable content providers are judged on?

I am not sure they can. They are at a severe disadvantage and I believe the problem is only going to get worse over the next decade. By 2025, I suspect network television will look radically different due to the competition from this type of virtually unrestricted content and the failure of the decades old ad based television model.

After all, when is the last time you actually watched something live on tv other than a sporting event? I consider it a complete waste of time to watch commercials so I will record something on my DVR and watch it a few hours later, or the next day, just to be more efficient with my time.

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Final Thoughts

Networks and advertisers have taken notice in this delayed watching and binge watching effect so they are accounting for it in the Nielsen ratings systems more and more. However, by this time, advertisers must be acutely aware that people skip their commercials. That is why you are seeing more and more product placements within shows.

I was watching Under the Dome the other night and it was apparent Microsoft had paid to have their Surface tablet written into the show. They even focused in on the screen and showed how you touch the icons to get it to work. Look for more and more of that in the future, or honestly, I wouldn’t be surprised to see live ads during the shows.

They used to do that in radio and tv. It would seem funny to us now, but imagine Jack Bauer stopping right in the middle of an episode of 24 and looking straight into the camera and start talking about deodorant or Depends underwear. You laugh, but the networks are going to find ways to get their money back if the current ad based model continues to deteriorate.

As networks try to adapt to keep up with the competition from cable networks like A&E and FX, and from online streaming services like Netflix and Hulu, and if the long rumored Apple TV ever comes to market, our television and entertainment choices and sources will continue to evolve making those days of blurry tv images, rabbit ears and paperback TV Guides further recede into our memories.

It is a cliché to say so, but it really is true, people that grew up in the last 20 years really do not know how good they've had it.

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Sep 28, 2014 9:11am
Jack Bauer shilling Depends - now that's worth tuning in for...

Very interesting article, learned some things from it. Thanks.
Sep 29, 2014 4:32am
So enjoyed reading your article. It is fascinating to me to see the effects of technology on our lifestyles, such as email has had on the postal service. Changes that alter industries while we watch. I do feel a little sorry for the guy at Blockbuster who made the decision to pass on Netflix! Thanks for sharing this.!
Nov 16, 2014 8:07pm
Hi Mjpyro! Thanks for the great read! The only question/comment I have is in regards to your mention of 'if Apple TV ever comes to market'. It is available on the Market ..and has been for some time now. Do you live in a country where its not available? I'm brand new to Infobarrel and writing articles as well, but am enjoying all the interesting people and information I'm learning. Again, I enjoyed your article and learned some more interesting facts. Thanks for sharing!
Nov 17, 2014 3:04am
Thanks for reading.

What I was referring to was an actual tv that Apple is rumored to be producing that will interface with streaming content and a lot of other stuff they are being tight lipped about. I know they already have that Apple streaming device that you are referring to. Yes, it is called Apple TV officially, however, they might be producing a real tv in the very near future. It is not certain though because from all I have read, they are having difficulty making deals with all of the content providers to make the tv do what they actually want it to do. The content makers and providers do not want to be burned by Apple the way they burned the music industry when they first came out with iTunes in the early 00s.
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  1. "Netflix." Wikipedia. 28/12/2014 <Web >
  2. "Epic Fail: How Blockbuster Could Have Owned Netflix." Variety. 28/12/2014 <Web >
  3. "Netflix Has Renewed “The Killing” For A Fourth Season!." Buzzfeed. 8/01/2015 <Web >

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