The Netflix Effect How Netflix Is Changing The Rules For TV
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The 20,000 Foot View
Since reinventing itself as an online video subscription platform Netflix has transformed the paid video market. By delivering its online offering into consumers’ living rooms through connected TVs it removed the barrier between the TV and the internet. A competitive pricing strategy and commissioning attention-grabbing content bought the platform consumer mindshare both in its core US market and internationally. On-demand programming combined with commissioning shows targeted at specific consumer segments presents audiences with a compelling alternative to expensive Pay-TV bundles. The steady increase in cord cutters and cord nevers means that the traditional Pay TV sector is quickly having to learn best practice from Netflix in a bid to survive and thrive in this new market.
Key Findings
- Netflix’s fastest is coming from its non-US Its International subscriber base has between 2012 and 2015
- Netflix is subsidizing its international subscriber growth less revenue earned from its subscribers
- Despite slowing in US subscriptions between 2012 2014, ARPU was up
- Netflix’s fastest revenue source is international subscriptions a CAGR of between 2012 2014
- In 2015, will spend the same as and Hulu, its two main competitors combined, on content
- HBO’s annual budget is less than a of Netflix's total content budget-which licensing as well as original of consumers aged to have an online video subscription
Companies mentioned: Netflix, HBO, Sky, HBO Now, Sky Go, Apple, Apple TV, The Echo Nest, Next Big Sound, Comcast, Time Warner Cable, Brighthouse, Charter