Netflix and the Networks: Personalization
Netflix has quickly become a cultural mainstay and is in fact now more popular than broadcast television, specifically CBS. Some may have doubted Netflix, but Ariel Napchi CEO of Hiro Media was not one of them. Ariel Napchi definitely appreciates how digital media has changed the entertainment landscape permanently, but he is far from the only one to see how Netflix has taken advantage of the medium.
Netflix is a very unique experience, unlike broadcast television which must try and appeal to a much broader audience. Netflix allows users to watch exactly what they want – when they want it. As Netflix’s library of movies and television continues to expand, so will its popularity. According to Ariel Napchi CEO of Hiro Media, Netflix employs an algorithm to tailor the Netlix experience to individual users. Which means Netflix is a far more personalized experience than network television.
Mr. Napchi explained that CBS is the broadcast competitor to Netflix because it has a viewership of 20 million, which is still higher than that of the online streaming service, despite a consistent drop over the years. A big source of cable television revenues and viewership comes from sporting events. CBS hosted three incredibly popular non-sport events in 2014. This makes for a more equal comparison because both CBS and Netflix rely on traditional television for their viewership and ratings, as opposed to sports or sports commentary.
Netflix, the Better Business Model
While CBS shows like CSI and Big Bang Theory continue to be popular, CEO Ariel Napchi says not even those shows can compete with Netflix. It’s not a battle of popularity, it’s a battle of business models, and Netflix wins out. Simply put, the level of personalization allowed by the Netflix platform is enormous, especially compared to the traditional structure of network television.
Mr. Napchi explained that the algorithm used zeros in on a user’s particular interests, which dulls the pain caused by a multitude of inane television channels. People can now watch at their leisure a show which will almost always be geared towards their interests. It is a matter of time, the Netflix personalization-driven user-based business model will win out. As will any business employing a similar model capable of adapting to the user at a moment’s notice.
Network television may have been a behemoth in the past, but they have been replaced. The ability to watch user-tailored content in an instant, advertisement-free, is too strong for the traditional mass appeal-based business model employed by network television. This is exactly why Netflix will eventually win the business battle.