6 Comments

Summary:

Netflix’s background in DVDs-by-mail means it is often seen as mainly a movies service. However, the balance has tipped more towards TV show…

Ted Sarandos, Netflix (horizontal)

Netflix’s background in DVDs-by-mail means it is often seen as mainly a movies service. However, the balance has tipped more towards TV shows in its streaming operation.

“50 percent and sometimes 60 percent of viewing is TV episodes now,” said Netflix’s chief content officer Ted Sarandos, during a joint keynote at the Mipcom conference in Cannes with Miramax CEO Mike Lang.

This is the key factor behind Netflix’s high-profile deal to stream episodes of Mad Men, and also its decision to ink an exclusive deal for David Fincher’s new remake of BBC drama House of Cards.

“That can be mis-perceived as Netflix (NSDQ: NFLX) giving up on movies, which it’s not. It’s just consumers saying what they want,” said Sarandos during his keynote. He also announced a new exclusive deal for a TV series called Lilyhammer, starring actor/musician Steven Van Zandt.

Sarandos said that Netflix intends to use its recommendation algorithms to seed the show with users who are most likely to enjoy it. “We really think we can use these same algorithms to launch a show very rapidly, and put it in the hands of the people who’ll love it the most,” he said, citing the previous example of Starz’ Spartacus show being promoted to Netflix users who had enjoyed the film 300.

Miramax is one of Netflix’s key partners, with Lang having joined as CEO in December 2010 with the ambition of striking a series of digital distribution deals. He previously worked as executive vice president of business development and strategy at Fox (NSDQ: NWS) Entertainment, where he was closely involved in the acquisition of Myspace and the creation of online TV service Hulu.

“In a way I’d like to believe our company is a bit more Silicon Valley than Hollywood,” said Lang during the keynote, while outlining Miramax’s strategy of working with traditional TV partners, new services like Netflix and Hulu, and launching its own direct-to-consumer offering on Facebook, iPad and Google (NSDQ: GOOG) TV.

“We believe that cross-platform is key to growing the digital transactions business,” he said. “We believe that all these different platforms can be complementary and co-exist together. We think everything starts with the consumer. They’re not focused on windows or on what schedule they can watch something or on which device.”

Lang also said that when he joined Miramax, the studio was “basically closed for business”, despite having a library of more than 700 films. “It was a case of innovate or die,” he said, before outlining why this means he loses little sleep worrying about piracy.

“Piracy really is not the bigger issue for our company or for our library. It’s been lack of exploitation, just not getting it out there,” said Lang. “Most consumers at some point in their life don’t want to pirate. The way to then react to that is to offer legitimate, great services for them.”

Lang noted that there is still a “robust market” for ownership of films, even in the physical world, citing the upcoming Blu-ray release of Pulp Fiction with a raft of extra content as a good example.

He also drew on his experience of the music industry when launching Myspace Music to suggest a key lesson that the film and TV industries need to learn.

“Apple (NSDQ: AAPL) is the strongest company in the music industry, and because there was not enough competition, and still to this day is not enough competition, as an industry it can’t then influence, packaging, merchandising… all the things that are vital,” said Lang.

“As the movie business we have to be very cogniscant of that. That’s why we did our deal with Netflix, and why we also did our deal with Hulu. We want multiple players to be successful… Our goal as an industry should be to have as many as possible, ad may the best service win.”

You’re subscribed! If you like, you can update your settings

This article originally appeared in MediaGuardian.

  1. Alan Tregoning Monday, October 3, 2011

    The reason more people stream TV shows than movies is because the Netflix streaming library is much stronger in the TV side than the movie side.  If Netflix could expand on the quality of their streaming movie content then the balance would shift back to movies.

  2. Exactly, their movie library, documentaries excluded, is pretty weak.

  3. Yeah, but even if the movie selection was better, there simply are more hours in TV series than the total number of movie hours.  Plus, in the last decade TV has become a better bet than movies.  So in spite of everything, I am happy about the direction Netflix is going in for streaming, anyway.  I prefer TV shows over movies 9 times out of 10.

  4. Their movie selection isn’t nearly as strong – the other reason most people don’t do TV episodes by mail is that they don’t want to wait a DVD at a time for a season.  Take the X-files for instance do you have any idea how long it would take to to get the 61 disks of the X-files a disk at a time. 

  5. Here is a good thread on Quora on why TV show consumption patterns are different or Watch Instantly versus DVD by mail: http://www.quora.com/Why-are-TV-show-consumption-patterns-different-for-Watch-Instantly-versus-DVD-by-mail?q=netflix+tv+vs+dvd

  6. Everything Miramax CEO says about offering content to consumers and piracy sounds great. But his message about Apple is confusing. He thinks that Apple had and has too much influence, so he wants to support multiple players to foster competition. So far, so good. But then he says, “may the best service win.” Well, maybe Apple iTunes was and is the best service? Then he’d be right back with Apple as the major player. To my recollection, it wasn’t as though there weren’t alternatives to the iTunes store 8 years ago, they all just sucked.

Comments have been disabled for this post