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Netflix Heading for Global Domination?

18 Jul, 2014 By: Stephanie Prange

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You’ve got to hand it to Netflix’s Reed Hastings. He certainly has a vision and follows it. In spite of a misstep a few years ago in which Netflix disc renters balked at his plans for a brave new digital world, Hastings is sticking to his roadmap of creating original programming for his streaming service, expanding streaming internationally and slowly phasing out disc.

Witness just a few of the recent events involving Netflix:

• Netflix original shows “Orange Is the New Black” and “House of Cards” picked up multiple Emmy nominations, prompting observers to lump in the online pioneer with the cable companies that are eclipsing broadcasters at the annual awards show.

• Netflix and The Walt Disney Co. July 17 announced an agreement giving the subscription streaming pioneer exclusive pay-TV access to first-run Disney movies in Canada beginning in 2015.

• According to new data from IHS, sales of DVD and Blu-ray Disc movies in Norway and Denmark have fallen more than 50% over the past few years — the fastest rate of decline anywhere in the world — in part because of the rapid growth of Netflix.

• Even though it created the by-mail disc-rental business, Netflix stopped processing disc shipments on Saturdays in June.

Netflix executives’ laser focus on the company’s three key objectives is yielding undeniable results, and any observer certainly has to credit Hastings and his executive team for their determination and success.

Where that leads the industry at large is another question. The shrinking disc business, in part hastened by Netflix’s streaming service, has been a blow to studios, and Netflix’s cord-cutting customers have shaken up the cable and broadcast businesses in the TV sphere, which may eventually result in lower income for TV content producers. Netflix has shown a willingness to fund content — Emmy-lauded content — but is that enough to make up for the loss of income to other content creators who have built our entertainment industry into the envy of the world?

Will struggling content companies merge to save costs, putting the control of media into even fewer hands? Fox’s bid for Time Warner this month is an ominous sign.

Netflix’s quest for global domination is off to a good start. I hope its disruptive business model increases strong content, rather than shrinks it.
 

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