Netflix wants linear TV to die. CEO Reed Hastings has been beating the TV murder drum for over 8 years, and in the Investor call todayhe reiterated his belief, confidently saying that Netflix was in a great place because linear TV would be dead in “5 to 10 years.”
Hastings is financially incentivized to say so. One of the biggest competitors to the largest streaming service in the world is the range of completely free streaming channels that beam to any TV with an antenna, and their more expensive friends on cable TV.
Netflix needs linear TV to die because it needs the streaming holdouts that still use linear TV. It lost a staggering 1.3 million subscribers in the U.S. and Canada in the past three months, according to its second-quarter 2022 earnings report. With over 220 million paying customers worldwide, it has essentially found as many subscribers as it goes. It’s doing its best to gain subscribers: it’s got its inbound ad-supported tier (which won’t include all the content you’re getting right now), and it’s going to try and end the practice of account sharing, forcing sharers subscribe or go without streaming on any screen larger than a laptop. But if you actually have as many subscribers as you can, you need your competitors (linear TV, YouTube, TikTok, the outdoors, etc.) to do worse. So yes, of course, Hastings wants linear TV to overflow the bucket.
But will it really happen? The number of TV viewers has fallen, that’s for sure. After the increased amount of original content on cable TV came in the 2010s, the market fragmented and the power of broadcast TV stations declined. Grey’s Anatomy remains one of the most watched shows in the United States, despite increasing from an average of 20 million viewers per episode to… four million.
But TV broadcasts are still… you know… free. You do not have to pay for internet and on top of that pay a subscription fee (or 12). You can just turn on your TV and, provided you have a good enough antenna, get enough good content — the content Netflix is desperately trying to recreate on its own service. The Office, Friends, Grey’s Anatomyand CW’s entire line of teen dramas was consistently among Netflix’s most consumed content before being sent back to other services through licensing deals.
Broadcast TV is also about to get a major upgrade in the form of ATSC 3.0. While its rollout has been frosty, the new broadcast television standard promises all sorts of quality improvements that streaming comes at a premium for – if at all it can offer. ATSC 3.0 supports 4K and 120 frames per second, wide color gamut and HDR. Netflix currently charges $19.99 a month for that, and HBO Max has been so slow to roll out 4K that I sometimes wonder if it even knows what 4K is.
And broadcast TV is just one (free) part of linear TV. There are also all the cable channels that we still subscribe to, even though streaming should save us from outrageous costs and supporting content that we don’t want to consume. While viewership declines, cable remains the least obnoxious way to watch sports, and it’s the fastest, highest-quality service for watching TV that’s otherwise limited to a single app that may or may not be good, and you’re sure to get it. costs more than you want to pay.
Plus, there’s the fact that almost none of the major streamers have managed to match one of linear TV’s most soothing features: the entire linear broadcasting of content. A never-ending stream that you can switch on and off at your leisure, and that can act as soft background noise in your daily life. I long for something as simple as the ability to create playlists on Netflix and instead get an app that forgets I started Persuasion the evening before.
Linear TV struggles compared to Netflix. But how should linear TV die if streaming continues to have so many problems and struggle to compete on the hyper-popular content front? It feels more like streaming is chasing linear TV and whispering “die already”. But whether it dies in the 5 to 10-year window Reed Hastings wishes remains to be seen.
Revelation: The edge recently produced a series with Netflix.