Netflix recently outlined their vision for the future which, surprising to nobody, will see online streams completely replace traditional means of watching television. The company makes some compelling arguments in the 11-page document titled “Netflix Long Term View”, highlighting a number of factors they believe will lead to the demise of television as we know it today.
Increased adoption of Internet-equipped televisions will play a heavy role in sending the traditional television packing. Also, Netflix feels that online streaming services will be able to adopt 4K faster than traditional cable and satellite operators – provided the bandwidth is there, of course. What’s more, the fact that newer companies are able to innovate and improve faster than well-established media also says a lot about the future.
In the interim, Netflix is well aware that they can’t offer the same variety as cable providers or even iTunes. Instead, they are focused on providing an experience that caters to customers’ wants and needs. Specifically, they are thriving on the freedom of on-demand and the flexibility of being able to watch on any screen, anywhere at any time.
Naturally, this level of flexibility doesn’t come cheap. Netflix said they have to shell out more than $2 billion a year just for content licensing. Another $450 million annually is allotted to marketing efforts while more than $350 million is budgeted to enhancing their online service. Even original series like House of Cards is an expensive endeavor – costing $100 million to produce just for the first two seasons.