Friday, April 26, 2013

Netflix CEO Sees The End Of Linear TV

Netflix, despite its bumps and bruises, has navigated from a DVD subscription model to a digital one.  And according to their CEO, Reed Hastings, imagines a TV future that is all streaming and non-linear.  "People love TV viewing, but they hate linear TV, including DVRs and cable VOD services, argued Hastings: 'The linear TV channel model is ripe for replacement.' Stepping up to replace it are apps from companies like Netflix, HBO and ESPN, which deliver programming to multiple screens."And while I agree that the viewing model for consumers is changing rapidly, I believe that consumers will find a viewing experience balanced between linear and non-linear video consumption. 

As I read the article, I admit a bit of confusion when Hastings describes linear TV to include DVR and VOD. But I believe his description is more between the current cable/satellite model and a digital streaming one.  "Technical advances, including 4k streaming and personalized advertising, will speed up the transition from linear TV to app-based on demand programming, and TV Everywhere will make it easier for cable networks to transition into this new world." 

I prefer to describe linear TV as a sit back model where we are fed video that has been pre-programmed to air at a particular time and once aired is not accessible till its next airing.  A non-linear model for me is one that includes DVR and VOD and streaming services where the consumer chooses when and what to watch.  And  consumers are moving toward the streaming model because of the mobility and personalization factors.  But some streaming is in fact linear.  Huffington Post offers its HuffPost Live channel on its website.  And linear still matters for live events, especially sports, as well as news, weather, and other big events.  I expect broadcast and cable to deliver more live programming as a means to capture audience share from on demand.  With live comes an anything goes factor that is harder to edit out.  And for viewers that simply want a sit back TV experience, linear reduces the choices a viewer has to make.

So Hastings is right that streaming will impact viewing choices more and more.  And his decision to build a brand experience that defines and positions itself above the fray is a smart strategy.  "'For us to be hugely successful we have to be a focused passion brand. Starbucks, not 7-Eleven. Southwest, not United. HBO, not Dish.'”  Competition for audience will only get fiercer when you add up all the choices a consumer can access for their viewing pleasure.  And with so much non-linear choice, we may sometimes simply revert back to linear programming to simplify the viewing experience.