April 14, 2018 – Netflix isn’t perfect. I’ve never liked their interface. It’s difficult to find things, and they suggest things for me I don’t want to watch. I also wish they had more Hollywood blockbusters available for streaming, not for Blu-ray/DVD rental only. And I wish they had more international series I like, rather than the mediocre ones they keep promoting.
Having said all that, I’m happy with Netflix. They’ve gotten so much right. They must have. They’ve grown into a company with 170 million members in over 190 countries. (That’s crazy.) Here are Netflix’s major innovations that not only paved the way for their success, but also changed forever how people watch movies and TV…
In the late 1990s a new technology came out called DVDs. (Remember those?) Two software engineers, Reed Hastings and Marc Rudolph, quickly came up with the idea to have a website where you could rent DVDs, and they would mail the discs to you. What? Yes. That was their plan when they founded Netflix in 1997.
Prior to this, you had to go to your local Blockbuster store (remember them?) or some other video rental place. After a while, the by-mail strategy caught on in a big way. People stopped going to their local video rental shops and let the U.S. mail do all the work. This continued when Blu-rays came out (mid 2000s).
Further innovation: And, rather than having to pay a rental price for each disc, in 1999 Netflix became a monthly subscription service. Now you could rent as many DVDs as you wanted, and pay one monthly fee.
Netflix had already correctly surmised that people would rather sit at home and wait for the mail than get in their car and drive to a video rental store. In 2007, they figured out that people would rather sit at home and not wait for the mail, but instead watch things immediately – by “streaming” them. And as with disc rental, it was a pay-a-monthly-fee-and-stream-all-you-want arrangement.
Netflix had again correctly projected what the public wanted, and by 2010 you could stream Netflix shows on your iPad or iPhone. With all its service innovations, Netflix (with the help of Redbox kiosks) eventually forced Blockbuster, Hollywood Video, and other video rental chains out of business.
In 2012 and 2013, Hulu, Amazon Prime, and Netflix all started doing their own original programming. But Netflix was set apart because of awards. They had co-produced Lilyhammer in 2012, but their first solo original series was House of Cards in 2013. House of Cards was nominated for eight Emmys in its first season, 13 in its second season, and won several.
Netflix also had the hugely successful Orange is the New Black, and recently Stranger Things and The Crown. It was a big ruckus when cable channels (like HBO) started winning awards over the major networks. Now a streaming service was winning.1 In 2017, Hulu gave Netflix steep competition with their The Handmaid’s Tale, which won four Emmys including Outstanding Drama Series and Lead Actress.
Further innovation: But the other thing Netflix did with their original programs that proved to be revolutionary was to make entire seasons available all at once. You could watch all of season 1 of Lilyhammer or House of Cards on the same day. This was new, and went against the weekly release model of the major networks and cable networks. But Netflix again knew in advance what the public really wanted. And being able to watch shows all at once led to a new American term and pastime: “binge.”
How about something revolutionary on the big screen?
As it turns out, Netflix has already made some efforts there. In 2015, they released Beasts of No Nation. Starring Idris Elba, it was the tale of a boy becoming a child soldier in West Africa. The arthouse project found critical success (RT 91%) and Elba won awards, but the movie made less than $100K at the box office. Netflix tried again in 2017 with Okja, starring Tilda Swinton and Paul Dano, another arthouse movie (RT 86%). It did a little better than Beasts, bringing in over two million in box office worldwide.
These movies were more than acceptable, but I’m thinking Netflix can do better. They could do blockbusters, or 70s-style dramas like The Godfather. Or buy a major theater chain to make distribution easier. Or they could come up with some totally new way of doing local cinema. It wouldn’t be the first time they did something never done before.
[1] The Emmy awards progression from major network shows, then to cable shows, and now to streaming service shows proves that people don’t care where a program is shown. The issue is, they just want something of high quality to watch, wherever they can watch it.