HBO, CBS, and Netflix have al made headlines this week. As we had predicted here at FreeCast Inc, the floodgates are now open and the networks are lining up offer their content direct to consumers via new over-the-top services instead of requiring cable subscriptions. Now that other major networks are embracing video-on-demand, another company is starting to lose its luster: Netflix. The company missed its admittedly high expectations on Wednesday, sending its stock price sliding. The news, sandwiched between announcements from HBO and CBS of new streaming services that will inevitably compete with Netflix’s own, further contributed to a bad week for perhaps the most well known subscription video streaming company.
It’s no surprise that as traditional cable channels begin to offer the same type of service as Netflix, the company that was once in a league of it’s own is increasingly being seen for what it is: a glorified channel. When you think about it, channels are just bundles of content including TV shows, movies, and live events. Many people mistake Netflix, Amazon Instant Video, and Hulu for unique entities because they lack the hallmarks of the channels we’re familiar with, i.e. those that arrange content into a schedule, complete with commercials and all, and reach our homes via a box beneath the TV set. But the TV schedule was born out of necessity in a time when TV only broadcast over the airwaves. In the 21st century, the concept is all but obsolete as consumers, and now the networks too, embrace video-on-demand. The idea of watching show at a set time when it airs is dying, as busy consumers choose the convenience of watching what they want, when they want, and where they want, rather than waiting for a show to come on or interrupting other activities to catch it.
Aside from live content like sports and breaking news coverage, the next generation of television will see content go completely on-demand. That doesn’t mean that scheduled lineups will go away, but they will be little more than playlists assembled for (or by) nostalgic users of future TV services. But even then, if you want to watch a show now that doesn’t come on for several hours, you could certainly select it and do so. The key advantage of future video-on-demand TV services is not just the convenience of being able to watch your favorite shows at your leisure, but the savings made possible by only paying for what you want to watch. Sure, today’s cable TV might not be very convenient, and the numbers show that more and more people are watching video on smartphones and tablets, as well as with video-on-demand services like Netflix, those offered by cable companies, or DVR. But ask any cable subscriber what their number one gripe is, and price will surely top the list. And the reason is simple: if you only watch a few hours of TV a day, you’re still paying for 24 hours worth of programming on hundreds of channels.
With HBO, CBS, and perhaps soon ESPN no longer being cable-subscriber exclusives, the reasons to stick with cable TV and the high bills that come with it are quickly disappearing. And when every other channel from a typical cable package starts offering video-on-demand services of their own, suddenly companies like Netflix won’t stand out anymore. Netflix deserves a lot of credit for taking video-on-demand mainstream, but in 2014, that’s no longer a differentiating feature. Streaming video is no longer the next big thing, it’s just one of many current technologies. For anyone who had expected the Netflix hype to go on forever, this week has proved to be a lesson learned.