The 2013 Emmy Awards aired September 22. And this year, it was a little different than usual.
It wasn’t just that the starlets got skinnier and the dresses more expensive (though that’s certainly true). There was a new player among the nominees—one that might soon change the TV landscape for good.
That player, of course, is Netflix. The online streaming service experimented with original content this year, producing hit shows House of Cards and Orange is the New Black as well as a fourth season of Fox's cult favourite, Arrested Development (which had previously been off the air since 2006).
Netflix’s venture into original programming is paying off: 64% of Netflix subscribers report viewing its original content, with 43% saying that it was an important factor in their decision to keep the service.
And it’s not just subscribers that are taking note. Netflix made history by winning three Emmy awards this year. Best Directing went to House of Cards director David Fincher, while the show also won Creative Arts Emmys for Casting and Cinematography.
Netflix’s shows didn’t blow the competition away. House of Cards got beat out by traditional network programs in three out of four Primetime Emmy categories, and though Arrested Development got a few nods, it didn’t win any awards. But that’s no reason to overlook the online streaming service and others like it. They could very well soon replace television as we know it.
THE RISE OF ONLINE TV
Emmy host Neil Patrick Harris opened this year’s show by explaining to younger viewers that TV is “the thing you watch on your phones.” And he wasn’t that far off. Television viewership has been steadily shifting from the TV screen to the computer (and the tablet and smartphone) for the past few years.
In 2010, 64% of respondents to a Retrevo survey said that they watched some TV online. By 2012, the number of households with traditional television access had dropped by 500,000, and cable provider Comcast had lost nearly 400,000 TV subscribers.
According to market research firm RVA LLC, 40% of people today access some TV programming with online services like Netflix, Hulu, Amazon and iTunes. That number jumps to 70% for those under age 35—and more than 12% of that demographic report getting all of their TV and movie programming online.
WHY WATCH TV ONLINE?
Well, it’s cheaper, for one: subscriptions to online services like Netflix and HuluPlus cost less than $10 per month. Compare that to more than $30 per month for even the most basic cable packages and it’s not hard to see why viewers are foregoing traditional TV. Plus, many online streaming services are free. The lower cost appeals to millennials and price-conscious Gen-Xers alike.
And it’s easier than ever to get high-quality content online. As Internet speeds get faster and devices get smarter, online video content gets better. It’s now possible to watch HD-quality videos on almost any Internet-connected device (including TVs with devices like Chromecast, Apple TV and Roku).
Plus, online content is more personalized than broadcast television. Netflix can tell you what shows and movies you’ll like based on what you’ve already watched. Your cable provider can’t do that.
Perhaps online streaming’s biggest appeal? Convenience. People who watch television online aren’t tied down by program scheduling or seasons. They can watch the shows they want anytime they want and anywhere they want—new episodes the day after they premiere (or even when they premiere; old seasons months or even years later; watch one episode at a time, or 10 in one day.
And with devices like smartphones, tablets and gaming consoles, viewers can watch TV anywhere, not just in their living rooms.
WILL TRADITIONAL TV SURVIVE?
Online streaming services were threatening enough to traditional TV when they just replayed old content (and had to pay broadcasters for the rights to their programs). But now that many services, including Netflix and Hulu, are trying their hand at original programming, the Internet could pose an even bigger threat.
John Farrell, director of YouTube Latin America, predicts that online TV viewership will overtake traditional television by 2020. But according to some, that tipping point will happen much sooner, even as early as 2014. Recent estimates show that 75 million people watch video online every day and 40 billion videos are streamed every month just in the US.
What do traditional broadcast networks have to do to stay competitive? Two options are innovation and collaboration. Instead of fighting to compete against online streaming services, traditional TV broadcasters could work with the Internet to find their niche—and keep their viewers.
Traditional TV should also embrace online streaming instead of shying away from it. The Internet’s not going anywhere, and TV networks will have to learn how to make the most of it to stay on top. Many major networks, including ABC and Fox, are already taking steps toward this, streaming recent episodes of popular shows on their own websites. HBO even has its own streaming service – and mobile app – available to its 114 million subscribers.
Will traditional TV survive? You’ll have to tune in—most likely online—to find out.