The Netflix Network

After analyzing the company’s data-driven business model, Tim Wu argues that “much more so than a network that reaches viewers through a third-party cable operator like Comcast or Time Warner, [Netflix] knows what its customers actually like and how they behave”:

Right now, American viewers are averaging only about 45 minutes of Internet-streaming video per week, a blip in comparison with total television intake. Given that audiences trained for decades to respond to event-driven television, how realistic is it to expect more viewers to shift from traditional TV? John Steinbeck offered one answer: “It’s a hard thing to leave any deeply routined life, even if you hate it.” Any historian of consumer technology would add that machines change much faster than people.

Television in particular moves so slowly that the last time the concept of the network really came up for grabs was the late ’70s.

That’s when Ted Turner (the Turner Broadcasting System), Pat Robertson (the Christian Broadcast Network), and the founders of HBO successfully used satellites to begin to beam programming to cable subscribers. The ensuing frenzy resulted in the launch of a dozen networks, including ESPN, MTV, CNN, Discovery, and Bravo. Most of those channels are still around, not necessarily because of the strength of their programming, but because the reigning content hierarchy has been so entrenched.

Netflix believes it has a powerful factor in its favor as it tries to change viewers’ habits. “Human beings like control,” says [chief content officer Ted] Sarandos. “To make all of America do the same thing at the same time is enormously inefficient, ridiculously expensive, and most of the time, not a very satisfying experience.” There is a freedom achieved when your options extend beyond that night’s offerings and the limited selection of past episodes that networks make available on demand. Specifically, it’s the freedom to only watch television you really enjoy.

Previous Dish on Netflix here.