Is this the end of broadcast TV?

Feature Michael Noble 6 Feb 2013 - 07:00

In the wake of Netflix's House of Cards release, Michael takes a look at the impact of streaming services on the future of television...

January 2012. Netflix boss Reed Hastings is described in a Guardian profile as "the man who will finish off HMV, the DVD business – and maybe, one day, take on BSkyB".

January 2013. HMV and Blockbuster UK call in the receivers. Time for Mr Hastings to bring the battle to BSkyB. And the rest of your TV. 

Yes, TV. Netflix, like its rival Lovefilm, may still be primarily known for offering movies, a fact reflected in the brand names of both companies, but with the on-going revolution in delivery systems and developments in creative output the distinction between TV and film is blurring. Consequently, the real battle for dominance of the on-demand market may lie in the small, rather than the silver, screen. 

There have been a handful of indicators that this will be the case. iTunes now offers ‘Season Passes’ for TV shows, doling them out episode by episode. Last year, ABC’s The River made its UK debut that way, and wasn’t picked up by a traditional broadcaster until several months later. It passed largely unremarked, if only because the series wasn't any good. It was a minor blip. Downton Abbey is being offered to US fans in the same way and it recently emerged that Amazon was in talks to develop the TV version of Zombieland, delivering it through their Instant service. 

But is it even TV? Take House of Cards, Netflix’s big pitch as a producer, rather than mere deliverer, of content. We’re calling it ‘television’. It’s being reviewed by television critics and the creative team behind it, despite having pedigree in cinema, are calling it that too. In terms of form, it resembles TV, in that it tells a story in multiple episodes over several hours as opposed to two, and weaves multiple storylines. There are even planned ‘seasons’ as opposed to ‘sequels’. It’s the language of TV, but the label itself may swiftly become a legacy term. 

Up to now, receiving episodes in weekly chunks has retained the spirit of TV, but even that is changing. Many consumers now choose to save episodes up for an all-day binge. It’s closer to the experience of reading a novel; you can do it in short bursts or settle down for a lengthy session. With laptops and, especially, tablets, these days you can even do so on a train or plane, just as we do with novels.  

Recognising these changed habits, Netflix have made their new show available in one go. It was released on the 1st of February as a ‘boxset dump’. If you fancy an afternoon on the sofa watching episode after episode, you can do it right away without having to store up a backlog on your PVR. Of course, if you prefer to dedicate an hour a week to seeing an episode you can do just that. The difference is that you have the choice. 

A bold move, but it’s not hard to see their thinking. Netflix doesn’t benefit from the individual sales that iTunes and Amazon enjoy. As a purely subscription-based service, they need to attract customers who are willing to pay and able to stay. 

They only had to look at their own product for the answer. Having failed to be picked up by a UK broadcaster, Breaking Bad still managed to find a sizeable audience through online means, including, of course, Netflix streaming. The show was added to the Netflix roster by season rather than by episode, and of course, viewers lapped it up. 

Possession of the rights to a TV show whose reputation has only grown with each season and that is gaining an expanding circle of viewers is a major laurel for Netflix. It also points to the type of product that Netflix needs to offer. Not an online store like iTunes, but an online channel, for which consumers become members rather than mere customers. To attract memberships, it would help to have a recognisable brand with which your clients can identify. One of the best ways of doing that is to offer prestige product. Competition for rights to popular TV shows is fierce, and, in the UK, traditionally won by BSkyB. Better to cut out the middle man and make the shows yourself. 

It’s not an original tactic. Look at HBO. Despite debuting in the 1970s, it became truly successful and an internationally recognised brand only after it began to create original content in earnest. Beginning with the terrifyingly brilliant Oz in 1997, HBO cemented its status as a producer with a brace of mega-hits in Sex and the City and The Sopranos. 

Crucially, HBO’s ascendency was predicated on the quality of its output. The little ’static noise’ ident that preceded the credits became the closest thing that TV drama had to a kitemark. Other providers such as FX (The Shield), AMC (Breaking Bad, Mad Men) and Showtime (Homeland) played catch-up, aiming to compete on quality rather than simple audience share. With even Hollywood’s top talent now scrambling to work on television, no one can blame Netflix for taking a shot.

It’s a pretty big shot. Boasting a budget in excess of $100m, Netflix have had enough confidence in its House of Cards remake to order two thirteen-episode seasons before screening so much as a pilot. The personnel involved have a fine pedigree, Kevin Spacey stars and produces, while David Fincher directs the first two episodes and remains on board in another producer's chair. The source material is exquisite, and although the plot is a fairly elaborate one, the show's driving force is a character so deliciously evil that it's entirely plausible that he could sustain a seven or eight season run. Done properly, he could be as seductive an anti-hero as Tony Soprano or Walter White. 

It’s still a gamble. The delivery system is, on the face of it, the boxset equivalent of straight-to-video. It’s one thing picking up a series that has begun to develop a fanbase, quite another to build an audience from scratch. Even with their much-boasted-about 33 million global subscribers, the market for the show has been made artificially narrow. No-one, for example, will stumble on it while channel surfing. 

The show needs to establish a solid reputation, both in terms of critical response and word-of-mouth support. It may encourage some curious viewers to try a free monthly trial, more than enough time to watch the entire season without handing over a single penny. To succeed, Netflix will need to retain these viewers. One show will not be enough to do that. To encourage paying subscribers, Netflix needs to establish a portfolio of in-demand titles in a range of genres.

Hastings seems bold enough to try this. Netflix have already come to the aid of Arrested Development fans desperate for a revival, while last year’s Netflix original Lillyhammer has been given a second season. The current plan is for five new original shows a year, and $300m has already been earmarked to pay for them. 

The Netflix gamble seems to have its rivals on the back foot. Mindful of losing ground to more flexible competitors, Sky have begun to offer bespoke services via their Anytime service and stand-alone on demand product NowTV. They may even be ready to play their strongest hand and offer Premiership football on a pay-as-you-go basis. 

The war is only just beginning, and it may yet get bloody. As Netflix makes a bid for their territory, traditional producers will begin to see them as a rival rather than a partner. As a consequence, Netflix may find itself having to stump up a lot more cash to win the rights for the TV shows and films it currently streams, and may find it difficult to acquire new content. 

Although a price war would be welcome news to customers, this type of conflict is rarely fought without casualties. Earlier battles between Sky and Virgin saw some channels simply disappear from the EPG, while the acquisition of more and more exclusive content by Sky has meant that many viewers have missed out on cherished favourites. 

There is, however, an opportunity for the viewer to win. The pressure to make services more flexible, as Sky has had to do with NowTV, is welcome. We may see more suppliers making a virtue of requiring no monthly contract. 

It will ultimately come down to quality. We are still in TV drama’s Golden Age and there is no sign of a waning in our appetite for it. Let the producers engage in a battle for quality, an arms race to deliver shows with kudos and critical clout. If it means more Breaking Bads, more Games of Thrones, more, dare I say it, Houses of Cards, then wonderful. 

Just watch those spoilers, OK?

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If Netflix finally get HBO shows on the radar, then it will become a turmoil. That saying, I would really love HBO to sign up with Netflix so I can finally watch some pretty badass shows on streaming.

Perhaps the beginning of the end, remember the digital switchover took nearly 15 years from first mention to turning off analogue. It takes a long time for some people to adopt or adapt, HMV may go down the toilet, but supermarkets are stacked with DVDs and CDs so these changes will be at a pace dictated by the consumer.

I personally don't own any DVDs or CDs anymore, I'm all about streaming content now that broadband can deliver it, I wouldn't call myself an early adopter, but I'm on board as soon as it works.

Commissioning their own content is a ballsy but logical step, Netflix just have a future focused business plan and are anticipating trends and will probably succeed where short sighted entertainment business models (Blockbuster HMV) have failed.

While you can't argue with the quality of the shows, its getting like sports subscriptions where if you're a sports fan you're paying for a multitude of subscription channels. I have no problem with HBO, Netflix et al producing their own shows but they should licence these out to other broadcasters who then in turn offer simple pay-per-view options. That would be too simple though wouldn't it nor would there be enough shillings in it either.

The end of broadcast television will not be televised. This is the future, people deciding what they will watch and how they will pay for it, without being bothered by commercials.

HBO just announced their own equivlient in the states so thats never going to happen

It is OK if the broadband service is in place that can support streaming & download services. For vast areas of the UK broadband speeds are not adequate or reliable enough to give up broadcast services. In many large towns the problem is bad enough, but for rural dwellers like me, broadband speeds are a joke. I get about 4mb during the day & often under 1mb in the evening.

There are still some problems with netflix, e.i. using a horrible software product such as silverlight, and are supporting copyright.

I'm all for more and more stuff like this, except where it becomes necessary to have 6 different (expensive) memberships to view my favourite 6 different shows. Haven't watched regular tv now for at least 6 months, only streaming and DVD/Blurays. I wasn't aware of how much time I wasted watching ads until I started watching the same tv shows on DVD. The best example of this I can think of is 24. One season is 24 shows of 1 hour in length, right? WRONG! A one hour show averages about 18-20 minutes of advertising. So 24 should actually be called 16.

As it is, more than 50% of your cable bill is directly going to big sports, while just about every other channel accounts for only cents on the dollar. ESPN is about 40 cents of every dollar on your cable bill and streaming of sporting events is still mostly restricted to the major four (ABC, NBC, CBS, and Fox). We won't be seeing an end to those channels unless sporting events become reliably available in real-time online.

I get under 3mb in a village and Netflix works brilliantly for me. Even providing Dolby Digital 5.1 surround when the programme or film has it. I love it. And I have no problems. The app is great and works thru ps3 a peach!

That's a great point that no one seems to recognize. Major sports are intimately tied to the networks, and the two rely on each other... The TV Timeout was invented for this reason

I like owning a DVD collection and a lot of the shows and films I own aren't on Netflix. I'm all in favour of having streaming but it won't kill off TV (not for a long time at least) same as being able to watch a film on your phone or tablet won't replace the TV or going to the cinema, it'll just be another choice

This is my problem with streaming! Everyone wants a piece so as a consumer we have to get several subscriptions to watch the shows we want. Streaming won't really take off until there is a service that covers a wide area of tv.

It is quite clearly NOT the end of Broadcast TV. So much of tv would not fit into the format/delivery used by Netflix for House of Cards.

There are no commercials on BBC

So what you're saying is that because HBO and Netflix produce a better product than other distributors (TV networks) they should share? That's like saying that because a Whopper is better than a Big Mac, Burger King should license the recipe to McDonalds. (Just an example, really I hate them both).

If customers are having to choose between ''suppliers'' different products, the answer isn't to make everyone offer the same thing, the answer is for the big networks to start making better product or to license sports in a way that satisfies its customers instead of forcing them to subscribe just so they can get sporting events.

Tv License is £145, Netflix yearly subscription is £72. BBC has some great programs but they cant compete with the value of Netflix's catalogue, imo.

Netflix? Get real they have a completely CRAP movie lineup. Its barely worth $1 a month let alone $9. They need to get a decent selection of content before even thinking they can compete.

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