Netflix Transitioning To Television

    February 28, 2012

More than half of all Netflix viewing is now television. The company known best for featuring feature films is becoming an Internet streaming service for television shows. For over a year, Netflix has been bulking up on old TV shows in an effort to challenge HBO. Home Box Office had been threatening Netflix lately with the success of streaming their own original shows. Netflix’s Chief Executive, Reed Hastings said the company would try a couple of dozen original shows instead of reruns, shadowing the HBO model.

Thanks to the shift in focus and strategy to Television, the company has been able to retain about 21.7 million streaming subscribers in the U.S. That’s roughly one in four households with broadband. For Netflix, the transition to television has been very successful over the past year, especially with the recent loss of movie titles from Starz. The new release movies provided by Starz, account for only two percent of all viewing on Netflix. The company has spent a large amount of its budget on new streaming titles that subscribers have requested.

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Many of the new titles are full seasons of TV series including “Mad Men,” “Breaking Bad” and “Lost.” The move to TV reruns was caused by the tightening up of titles from the major movie studios. The movie moguls fear the power and popularity of Netflix and in an attempt to slow its growth, have raised prices for films and shows. “The company is being forced into offering more (older) TV content because it’s cheaper,” said Managing Director, Youssef H. Squali.

“The conversation in the media world is, the content’s terrible, yet the average subscriber is devouring over an hour a day, every single day. Obviously they don’t think it’s horrible,” adds analyst Richard Greenfield. Netflix won’t say what proportion of their total viewing is made up from TV episodes but its executives put the number at fifty to sixty percent last fall. Mr. Greenfield suspects the number to be closer to eighty percent according to a recent New York Times article. Either way, its a pretty big win for Television and viewers.