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Yesterday I posted a note on Netflix' vision for their company and the TV industry in general. They now see themselves as a "movie and TV series network" and predict rapid growth for Internet TV. Today, I came across a Nielsen survey that supports both of those contentions.

The survey showed that 38% of the people in the U. S. subscribe to or watch Netflix streaming video service. That is up from 31% last year.


I don't know about you, but that is a lot more than I would have guessed. It is about 119 million people if they consider the entire population -- babies and all. Note also that Hulu and Amazon also have significant, growing numbers of subscribers.

Netflix' view of themselves as a series network is also confirmed by the study. Forty five percent of Netflix streaming subscribers say the types of shows they watch when they stream are original programming -- series like "House of Cards."

And, when they watch those series, they tend to “binge.” Eighty eight percent of Netflix users and 70 percent of Hulu Plus users report streaming three or more episodes of the same TV show in one day. As we pointed out in our previous post, both consumers and creators like the full-season format of Netflix productions.

The survey also showed, that Netflix and Hulu are watched on a variety of devices:


The above figure also suggests a trend away from computers and game machines toward phones and tablets. People want to watch TV on any device at any time and at any place.

"Over the top" Internet television is not just for geeks any more -- 38 million people understand how easy it is to defect from cable and satellite TV, to "cut the cord." As the quality and variety of Internet TV material improves, it will be easy for them to drop their cable and satellite subscriptions. When we reach the tipping point, the transition will be rapid.

Check out the Netflix Long Term View document for investors. It is interesting because it reveals their vision of the company and for the future of television in general.

As to the vision of the company, they say they are a "movie and TV series network." Note that they see themselves as a "network" -- will Netflix, YouTube, Amazon and the BBC become the new television networks?

But, they are not just a network, they are a "TV series network." That is a testament to their success producing multi-episode series for Internet distribution. People like to watch TV without commercials. They also like watching two, three or maybe all the episodes in one sitting. They like watching TV on phones, tablets, PCs or television sets whenever they want to.

Creators also like the artistic freedom and financial security of the Netflix format. They have the freedom to craft a long story. We can think of the Netflix series "House of Cards" as a 661 minute story, to be watched in one or several sittings. The 13 episodes vary from 46 to 56 minutes in length -- the writers are not constrained by time slots and commercial breaks. They could have created more or fewer episodes if they that was the best way to tell the story.

For more on a creator's view of Netflix, watch Kevin Spacey's excellent 2013 James MacTaggart Memorial Lecture 2013 (below). Spacey, who produced and starred in "House of Cards," says he pitched it to the TV networks and cable companies, but he went with Netflix because they gave him total creative control, funded 26 episodes up front and did not request a pilot episode. He feels that pilots are an expensive, misleading digression. He is producing very long stories with evolving characters, and trying to cram that into a single TV pilot or a two hour movie is impossible.

How about the Netflix vision of the future of television?

They sum it up saying that "While Internet TV is only a small percent of video viewing today, it will keep growing because:"

• The Internet is getting faster, more reliable and more available;
• Smart TV sales are increasing and eventually every TV will have Wifi and apps;
• Smart TV adapters are getting better and cheaper;
• Tablet and smartphone viewing is increasing;
• Internet TV apps are improving through competition and frequent updates;
• Streaming will be the leading source for 4k/UHD video;
• Internet video advertising is becoming more personalized and relevant;
• TV Everywhere provides a smooth economic transition for existing networks;
• New entrants like Netflix are innovating rapidly and driving improvements.

Do you like "binging" on a commercial free TV series? (I just finished "Orange is the New Black"). Do you agree with Netflix' reasons for the future growth of IPTV? Are they enough to overcome the power of the incumbents?

Check out Kevin Spacey's lecture: