Almost exactly a year ago, Netflix boss Reed Hastings joined many a failed prognosticator before him and predicted the end for ‘traditional TV’. Consumer behaviour was supposed to inevitably change thanks in part to his company and its on-demand wares. Who needs linear when you’ve got on-demand?
Well, it turns out pretty much everyone.
As we pointed out a year ago, he was aiming at the wrong target. We said that it wouldn’t be linear TV that the likes of Netflix could ‘disrupt’ but more likely competitor on-demand subscription services like Lovefilm and the DVD rental industry.
So, here we are a year on and what has happened? Well, Netflix and Lovefilm have both wisely invested in major TV advertising campaigns to encourage subscriptions. Linear TV viewing has stayed remarkably stable at the 4 hours a day mark (something we anticipate will be borne out shortly when we get the full year viewing figures for 2012 from BARB). Broadcaster VOD services like ITV Player and 4OD have continued to innovate and grow rapidly, complementing linear TV. And Blockbusters has gone into administration.
I don’t want to see anything go into administration – except perhaps Page 3. It is very sad that such an established high street brand has hit the rocks. Many’s the hour I have spent wandering its aisles looking for something to babysit my children (in Crouch End it is known as ‘Ocbusters’ due to some missing letters). But its demise is not all that surprising given the effect online commerce is having on the high street. Blockbuster’s difficulties – and to a certain extent HMV’s as well – are in part due to the likes of Netflix and Lovefilm.
So Mr Hastings’ prediction that Netflix would end something might be coming true, it just isn’t linear TV that is ending. And it isn’t a case of ‘not yet’ either. On-demand services have not dented linear viewing because most people mostly prefer watching live TV at the same time as others, to be in the moment. As on-demand services become increasingly available on connected TVs, some linear viewing may be displaced but we’ll be watching more TV in total (and Thinkbox has no preference for linear or on-demand; both create commercial revenue) and the linear schedule will remain the dominant influence on what on-demand we feel like watching. Whatever Netflix does, on-demand is a net gain for TV.