Netflix reaches a whopping 104m subscribers
Shares in the streaming service shot up by 10% yesterday after the company announced a huge surge in subscriber numbers. Netflix has changed the way we watch TV — but is it for the better?
By all accounts, Netflix has had a good three months. On Monday, the company announced that it had reached two important milestones: it surpassed 100 million subscribers, and over half of those are now based outside the USA. During the same period, its revenues rose by 32% to $2.8 billion. And last week it was nominated for 91 Emmys, a personal best that made it the second most-nominated studio this year.
As a result, shares in the company reached an all-time high yesterday — something that CEO Reed Hastings described as “the rewards of doing great content”.
The company began in 1997 as a movie rental service that posted DVDs to its subscribers in red envelopes. But Hastings always believed that eventually people would watch films on the internet. And in 2007, Netflix launched a website where people could do just that.
Then, in 2011, Netflix made a deal with Kevin Spacey that changed everything. He and the director David Fincher wanted to create a political drama called House of Cards, based on an old BBC series. Multiple TV networks wanted to make it with them. But the pair chose Netflix instead. The company offered them a rumoured $100 million for two seasons, and gave them total creative freedom.
The risk paid off. The show has now made five seasons and received 33 Emmy nominations. Netflix, meanwhile, is spending $6 billion on 1,000 hours of original content this year.
The approach has rapidly changed the way people watch TV. Around 70% of Americans now “binge-watch” shows, and over half of millennials prefer streaming to live broadcasts.
It has also changed TV itself. The freedom that Netflix offers means that TV writers do not have to stick to strict episode lengths, write in advertising breaks, or end on cliffhangers to encourage viewers to tune in the next week. They simply tell the story that they want to tell.
Should we be happy with these changes?
“Yes!” say devoted Netflix fans. Before House of Cards, shows were suffocating under out-of-touch network executives and the demands of advertisers. But Netflix gives all the power back to the people who matter most: the creators and viewers who love TV. The former are allowed to take risks, while the latter have more choice than ever before. And that’s not to mention how easy and fun it is to use.
No thanks, say others. Like many technology companies, Netflix is getting too big for its boots. Its executives admit that they want you to stay in and binge-watch TV shows instead of going out, reading a book, or even sleeping. Netflix wants you to be addicted to it, and its technology is designed to make that happen. But just because something is easy does not mean it is good for you.
- Has Netflix been good for the world?
- Will the company still be around in 50 years?
- Write a 200 word review of your favourite TV show.
- In groups, imagine you are starting your own TV or film company to rival Netflix. How would you make it stand out? Present your ideas to the class, and vote for the best.
Some People Say...
“Television is not art.”
What do you think?
Q & A
- What do we know?
- Netflix is often tight-lipped about things like subscriber numbers, viewing figures, and how much money it spends on programmes. However, it did release its profits and subscriber figures for “Quarter Two” (the three months from April to June) on Monday. The company is now valued at $78 billion, nine times as much as ITV and 1.5 as much as Fox.
- What do we not know?
- How long Netflix can keep up its astronomical rise. Other streaming services, like Amazon Prime and Hulu, are trying to emulate its success with their own original content. However, CEO Reed Hastings argues that Netflix can keep expanding across the globe, pointing out that — compared to the billions of people who use Facebook — 100 million subscribers is still small fry.
- Outside the USA
- In January 2016, Netflix expanded to 190 countries — notable exceptions being China and Syria. It has begun producing content in other languages to appeal to local audiences.
- 91 Emmys
- The company’s best performers were Stranger Things (19 nominations) and The Crown (16 nominations). The most-nominated studio this year is HBO, with 111 nominations.
- Portions of a business which are open to the public to buy and sell. The prices of these shares fluctuate based on how the financial industry thinks they are performing. Yesterday, Netflix shares rose from $176 to $184.
- David Fincher
- The Oscar-nominated director is known for the films Fight Club, Seven and The Social Network.
- $100 million
- Although Netflix never confirms how much it spends on shows, or how many viewers they get, this figure is widely reported to be true.
- According to research by Deloitte in March 2016.
- Over half
- According to a report by Horowitz Research in May 2016.