Netflix: Still Chill in 2016?

No other online media brand has been as successful as Netflix in 2015, as both subscribers and investors were very upbeat about the company’s business. Netflix has offered a slew of acclaimed offerings licensed from traditional TV networks as well as remarkable original programming that resonated very well with the critics and audiences. The stock price for the NFLX ticker symbol has ballooned to almost twice its original level within a span of just few months. But will the streaming TV’s top network grow as spectacularly in 2016?

In December, amid an uncertainty regarding the viewership of the global on-demand TV network, the shares fell 8 percent, and forecasts from S&P Capital IQ Consensus Estimates quoted earnings of 2 cents per share, basing on the revenue of USD 1.826 bln. While Netflix was still among the S&P 500 top performers, its shares had also taken a 9 percent hit when ITG Investment predicted the online broadcaster wouldn’t draw in as many subscribers in the US as it had originally hoped. The number planned for was 1.3 mln new customers, while the cautious prognoses from ITG put it at around 1.13 mln. With the news that Netflix failed to engage additional 1.15 mln US viewers (allegedly due to the credit card system upgrade), the company’s shares took another 8 percent dip. Combined with a USD 1 price hike for the service introduced at the time, it seemed NFLX had become too much of a wild card for the investors.

The downward momentum was finally arrested in early January, when the company announced global expansion. Its shares rose 9 percent, cancelling out the earlier loss. As the streaming service suddenly opened up to many new areas, millions of new subscribers were given an opportunity to view its programming at a great price.

„Netflix is in nearly every country of the world but China,” announced Reed Hastings, the company’s CEO, with boundless pride. He was adamant that this is a new dawn for Internet TV everywhere. „You are witnessing the birth of a global TV network,” he promised. Indeed, the expansion opened up a vast, untapped market for Netflix, but execs are still not ready to take on China, long considered the promised land of online TV. „We may be able to get started this year and thus deliver on ‚whole world by end of 2016’ or it may take longer,” reads the company’s statement.

Reed Hastings, Netflix CEO

While it hasn’t quite begun to conquer the Land of the Dragon, Netflix is now present in nearly 200 countries across the globe, including India, Russia and Poland. The international numbers have already exceeded expectations, with predicted number of 3.5 million new viewers confidently surpassed by a quoted 4 million increase in the international subscriber base. That gave the NFLX stock another 7.5 percent boost.

These are all very impressive numbers in their own right, but many question the ability of Netflix to stay on top – it’s risky business, Internet TV. And, of course, traditional TV big-hitters are among the most vocal in their criticism of Netflix – or rather, of how popular the online platform makes it out to be.

A few days into 2016, NBCUniversal, one of the biggest traditional, or „linear” TV networks, has revealed Netflix viewer numbers as collated by an analytics company, Symphony Advanced Media. In short, they turned out to be a lot less impressive than initially expected by the industry experts. In fact, the numbers seem to be positively tiny: Netflix’s flagship show, Marvel’s Jessica Jones, scored a paltry 4.8 mln viewers in the all-important 18-49 demo. Head of Research at NBCUniversal, Alan Wurtzel, was unimpressed. „I don’t believe there’s enough stuff on Netflix that is broad enough and consistent enough to affect us in a meaningful way on a consistent basis,” he said, underscoring the importance of the wider and more lasting appeal of the traditional TV.

The audience numbers were taken by analysing audio tracks being played for around 15 000 viewers. The idea was that if a show is being streamed, you can discern which one is watched by comparing what is heard to the actual sound stream of the show. Sounds a little convoluted, but Netflix never posts its viewer data and its apps and services cannot be measured directly for privacy reasons.

Shortly after the surprising reveal, the newly global online TV network retaliated, getting into a bitter war of words in various media outlets. They were also firm in their belief that the data are „remarkably inaccurate„. The main criticism of the revealed figures was, however, their actual validity as a measurement tool of TV success or failure. Unlike regular TV, online sub-based network doesn’t rely on ads, therefore it doesn’t need to target any demographic at all. Netflix can focus on providing quality programming to engage various niche or interest groups (e.g. sci-fi aficionados) and not the middle-of-the-road mainstream TV that appeals to most.

The arguments eventually got pretty heated and attacks – personal. „Why would NBC use their lunch slot to talk about our ratings? Maybe because it’s more fun than talking about NBC ratings… I hope they didn’t spend any money on it,” quipped Sarandos on the research carried out by the rival network. „An NBC executive recently said Internet TV is overblown and that linear TV is ‚TV like God intended‚. Our investors are not as sure of God’s intentions for TV,” read the company’s rather snide statement.

The viewer numbers were a bone of contention ever since Netflix had made bold claims its bigger than traditional TV earlier in 2015. Feathers were ruffled in December, when Sarandos posited that Netflix’s new original drama „Narcos” had greater viewer numbers than HBO’s super-hit „Game of Thrones”, a claim unsubstantiated by actual viewer data. Chief exec at FX (one of the premium TV networks) John Landgraf remained unconvinced, saying, „If Ted doesn’t give ratings, he shouldn’t then be saying, ‚This is the biggest hit in the history of blah blah blah.’… Ted shouldn’t say something is successful in quantitative terms unless you’re willing to provide data and a methodology behind those statements. You can’t have it both ways.”

But even though clearly there’s some discontent bubbling right under the surface, there’s more to the relationship between Netflix and traditional broadcast services, than jealousy or animosity. Les Moonves, the stalwart CEO of CBS, deems this a love-hate relationship. „Netflix is our friend. And our competitor,” he was quoted as saying in November. He was referring to the fact that Netflix actually buys most of its non-original content from the traditional networks in multimillion dollar deals, including such hits as FX’s Archer and CBS’s Arrow, Flash and iZombie, all very popular shows. NBCUniversal’s attempts at diminishing the non-linear rival’s achievements can be viewed as nothing more than posturing, because the way of the future is, at this point, pretty clear. Just this season, the CW (a network owned by Time-Warner) viewer numbers in the prime-time dropped by a substantial 13 percent, according to Bloomberg, and many other major networks are scrambling to fill the void left by viewers leaving in droves for cheaper, ad-free solutions online.

The big boys do understand which way the wind blows, though they would never admit it openly. Already most major alphabet networks are planning to launch their own platforms to get a piece of the streaming TV pie before competition. This would mean that once the syndication contracts are up, the copyright holders (in this case, major TV networks) will be able to stream their shows on their own, generating direct subscription fee revenues. CBS, for instance, reportedly intends to pull its greatest hits from Netflix in order to bolster its own upcoming online presence. They’ve also announced they will only broadcast their newest series, the reboot of Star Trek franchise, via their web service.

Whether it’s going to be a hit or a flop, quality is the name of the game now, and Netflix is no longer the lone maverick able to deliver great online programming. At the recent Golden Globe awards, Amazon streaming service took home two prestigious awards for its original series called „Mozart in the Jungle”, while Netflix’s creative minds went home empty-handed, even though they had a lot more nominations – nine in total. Amazon’s shiny new statuettes are the only two given to a streaming TV network this year, marking a significant step-up in quality among online broadcasters. Christine Short of the crowdsourced financial analytics company Estimize considers this a possible threat to Netflix dominance on the web-TV market. According to her, „Streaming is only a small part of the Amazon business model … yet they are still able to take a bite out of Netflix’s bread and butter business.”

The popular „Netflix and chill” phrase, a veiled invitation for a casual sexual encounter, proves how pervasive the network has become culturally.

That said, there’re also positive signs that Netflix will continue to grow. Take, for instance, its plans for new content in 2016: over 600 hours of programming, 31 new shows, many new documents and movies. The 2016 line-up is positively brimming with hot properties, from the second season of „Jessica Jones”, to the continuation of the prison soap „Orange is the New Black”. Last year, its investment into new material has reached an unprecedented USD 10.4 bln, up from an already staggering USD 8.9 bln in 2014.

In fact, they may have overspent. Investors are starting to show signs of wariness towards Neftlix’s wildly unstable fortunes, and being strapped for cash will do nothing to assuage their fears. Netflix’s operating income has fallen by more than USD 600 mln in 2015, showing that the company is very serious about investing every penny it earns into new content. But as the market has shown already, that alone might not be enough to keep subscribers hooked, especially once the major networks fully invest themselves into the game of streaming TV.

Of course, if you’re among these subscribers, you’ve got one heck of a 2016 ahead! Netflix spared no expense to make sure you stay sub’bed throughout the year. And if you haven’t ever watched Netflix, now’s the time to check out its free trial – it’s global, it’s easy to use and it’s got oodles of content for you to binge-watch at a moment’s notice. Just be quick about it – Netflix might not stay that way forever!


subscriber – tu: klient serwisu
upbeat – pozytywny, optymistyczny
a slew of sth – masa czegoś
acclaimed – uznany
to license sth from sb – uzyskać od kogoś licencję na używanie/sprzedaż czegoś
remarkable – niezwykły
original programming – własne programy telewizyjne
to resonate with sb – przypaść komuś do gustu, zostać dobrze odebranym przez kogoś
audiences – widzowie
ticker symbol – skrótowa nazwa firmy używana w raportach/indeksach giełdowych
to balloon – spuchnąć, gwałtownie się zwiększyć
(in) a span of X – (w) przeciągu X, (w) trakcie X
spectacularly – spektakularnie
amid – pośród, wśród
uncertainty – niepewność
regarding – odnośnie (do)
viewership – tu: dane na temat widzów, informacja o oglądalności
on-demand – na żadanie, dostępny na życzenie
forecast- prognoza
estimate – wielkość przybliżona, wycena
to quote – przytaczać, notować
earnings – zyski, zarobki
revenue – przychody, wpływy
top performer – tu: firma, która wypracowuje największe zyski
to take a hit – boleśnie coś odczuć, zostać dotkniętym przez coś
to predict – przewidzieć
broadcaster – nadawca (TV/radio)
to draw sb in – przyciągnąć kogoś
cautious – ostrożny
to fail to do sth – nie zrobić czegoś, nie dać rady czegoś zrobić
to engage – zaangażować, przyciągnąć
allegedly – rzekomo
due to – z powodu
upgrade – unowocześnienie, aktualizacja
to take a dip – dać nura, opaść
combined with X – w połączeniu z X
price hike – podwyżka ceny
wild card – dzika karta, wielka niewiadoma
downward – skierowany w dół, mający tendencję spadkową
momentum – rozpęd, impet
to arrest sth – zahamować coś
to cancel sth out – wyrównać coś, znieść się (nawzajem z czymś)
boundless – bezgraniczny
adamant – stanowczy, niewzruszony
new dawn – nowa nadzieja, początek nowej ery
to witness sth – doświadczyć czegoś, być świadkiem czegoś
vast – szeroki
untapped – niewykorzystany
exec (executive) – menadżer wyższego szczebla, członek ścisłego kierownictwa firmy
to take sth on – podjąć walkę z czymś/o coś, spróbować w/z czymś sił
sth long considered X – coś, co od dawna jest/było uznawane za X
thus – zatem
to deliver on sth – dotrzymać słowa i dać/dostaczyć coś
statement – oświadczenie
to conquer – podbić
to exceed expectations – przekroczyć oczekiwania
confidently – pewnie, śmiało
to surpass sth – przekroczyć coś, przewyższyć
boost – wzmocnienie, czynnik pobudzający
impressive – imponujący
sth is X in its own right – coś jest X same w sobie
to question sth – powątpiewać w coś, podawać coś w wątpliwość
big-hitter – wielki gracz, poważny gracz na rynku (pot.)
vocal – głośno/otwarcie wyrażający opinię
to make sth out to be sth – starać się pokazać, że coś jest jakieś
to reveal – ujawnić, wyjawić
to collate sth – zestawić coś (dane)
in short – pokrótce
initially – początkowo
positively – wręcz, zdecydowanie
flagship – flagowy, sztandarowy
paltry – marny, śmiesznie mały
all-important – niezwykle ważny, arcyważny
demo (demographic) – warstwa/grupa demograficzna
research – badanie, badania
unimpressed – niewzruszony
stuff – rzeczy
consistent – konsekwentny, spójny
to affect sb – wpływać na kogoś, wywierać wpływ
meaningful – znaczący, istotny
to underscore sth – podkreślić coś, uwydatnić
lasting – trwały
appeal – uznanie, zainteresowanie
audio track – ścieżka audio
to discern sth – dostrzec coś, zauważyć
convoluted – zawiły
to retaliate – odbić/odeprzeć atak, kontratakować
bitter – zawzięty, zażarty
war of words – wojna na słowa
outlet – placówka, kanał
belief – przekonanie, sąd
inaccurate – niedokładny
to rely on sth – polegać na czymś
ad (advertisement) – reklama, ogłoszenie
to provide – zapewniać, dostarczać
niche – niszowy
aficionado – wielbiciel, fan
middle-of-the-road – umiarkowany, dla przeciętnego odbiorcy
mainstream – należący do głównego nurtu, mainstreamowy
eventually – w końcu, ostatecznie
lunch slot – tu: przerwa na lunch
to quip – zażartować
to carry out – przeprowadzić
overblown – przesadzony, sztucznie rozdmuchany
sth is like God intended – coś jest takie, jakie powinno być
snide – drwiący, złośliwy
bone of contention – kość niezgody
bold – odważny, śmiały
to ruffle some feathers – działać komuś na nerwy
to posit – założyć, przyjąć
unsubstantiated – niepotwierdzony, bezpodstawny
premium – tu: płatny, dostępny za dopłatą
unfazed – niewzruszony, nieprzejęty (czymś niespodziewanym, co się wydarzyło)
unconvinced – nieprzekonany
quantitative – ilościowy
in X terms – pod względem X
willing – chętny, skłonny
you can’t have sth both ways – nie można mieć za dobrze, nie da się zrobić omletu nie rozbijając jaj
discontent – niezadowolenie
to bubble – kipieć, gotować się
jealousy – zazdrość
animosity – wrogość
stalwart – wierny, wieloletni
to deem sth sth – uznawać coś za coś/jakieś
love-hate relationship – relacja, w której jednakowo się kogoś kocha i nienawidzi
competitor – rywal
to refer to sth – odnosić się do czegoś, odwoływać
content – treść
to diminish sth – umniejszyć coś
posturing – pozerstwo, puszenie się
prime-time – czas najwyższej oglądalności
to be scrambling to do sth – w pośpiechu coś próbować zrobić (np. aby naprawić problem)
void – pustka
in droves – tłumnie
big boys – wielcy gracze
…which way the wind blows… – w którą stronę wieje wiatr, na co się zanosi…
to admit – przyznać
alphabet network – sieci telewizji typu ABC, CBS itp.
to get a piece of the pie – uszczknąć kawałek tortu, zarobić/zyskać na czymś lukratywnym
syndication – jednoczesne pokazywanie serialu/programu na wielu różnych kanałach
to be up – skończyć się, dobiegać końca
copyright holder – posiadacz praw autorskich
subscription fee – opłata abonamentowa
reportedly – podobno, rzekomo
to pull sth from somewhere – wycofać coś skądś, usunąć
to bolster sth – umocnić coś, poprawić
upcoming – nadchodzący
franchise – tu: seria, produkty/programy pod jakąś marką/nazwą
via – za pośrednictwem
flop – klapa
lone maverick – samotny buntownik
prestigious – prestiżowy
empty-handed – z pustymi rękoma
to mark sth – oznaczać coś, sygnalizować
step-up – podwyższenie, podniesienie (np. jakości czegoś)
crowdsourced – pozyskiwany przy pomocy zwykłych użytkowników (nie klientów) za pośrednictwem sieci w ramach kampanii (zbierania funduszy, danych itp.)
to consider sth sth – uznawać coś za coś/jakieś
threat to sth – groźba, zagrożenie wobec/dla czegoś
to take a bite out of sth – uszczknąć coś, osłabić
bread and butter – tu: będący źródłem utrzymania, głównym zajęciem
line-up – oferta, lista
brimming with sth – pełen czegoś
unprecedented – bezprecedensowy
to overspend – wydać za dużo/więcej, niż się ma
wariness – rezerwa, nieufność
fortunes – losy, dzieje
strapped for cash – mający krucho z gotówką
to assuage sth – osłabić coś, załagodzić
operating income – dochód operacyjny
hooked – zainteresowany, zaciekawiony (czymś)
one heck of a X – niezły kawał X, niesamowity X
to spare no expense – nie liczyć się z kosztami
trial – okres próbny
oodles – mnóstwo, masa
to binge-watch sth – oglądać całe seriale/serie filmów pod rząd, np. urządzając maraton filmowy/serialowy
at a moment’s notice – od ręki, bez przygotowania

by Prochor Aniszczuk

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