After many impressive milestones, Netflix continues to transform the way we consume entertainment. According to a recent study provided by Leichtman Research Group, more people report subscribing to Netflix than owning DVRs. The numbers are extremely close: It’s 54% Netflix subscribers to 53% DVR owners. The close numbers are significant as it marks the first time the balance has weighed in Netflix’s favor. Leichtman also notes that “back in 2011, 44% of US adults had a DVR while just 28% had Netflix.”
How has Netflix maintained such an accelerated pace? Analysts point to many factors. First, Netflix has produced many award-winning and popular shows over the years like House of Cards, Orange Is the New Black, and Stranger Things. It’s a follow-up to HBO‘s strategy from the 1990s and 2000s: Produce excellent content and subscribers will flock to your network.
Recent data from the US Energy Information Agency’s (EIA) Residential Energy Consumption Survey demonstrates that more Americans are living with fewer TVs in their households, with about 3% of households having no TV at all. That percentage was up from about 1.3% and has historically remained steady since 1997. The EIA also notes that “younger households tend to have a lower concentration of televisions per person and a higher concentration of portable devices such as laptops and smartphones.”
And that is the demographic, among others, that Netflix has successfully targeted. And Netflix, it appears, has no intention of slowing down.
The streaming giant generated a record-smashing $8.8 billion in 2016 compared to $6.8 billion the previous year. (Interesting note: The company posted negative operating cash flow of $749 million in 2015 and $1.5 billion in 2016. The reason? Investing in original content is expensive.)
Not resting on its laurels, the company is tinkering with different formats for the way its 93 million subscribers in 190 countries consume its content. Its newest innovation revolves around interactive technology and story branching options.
What if you could decide whether Frank Underwood from House of Cards should be locked in jail? Perhaps those adorable kids from Stranger Things should pursue another adventure? Netflix has plans underway to test a children’s show with the ability for the subscriber to choose the way the story plays out. If this catches on, other adult-oriented shows will join in the experiment. (Netflix hasn’t confirmed if this will be for new shows only or if fan favorites will also get this format.)
Filming all the different narrative branches will be expensive, however. But Netflix is counting on viewers wanting to see all the different storytelling branches in order to discover a new level of engagement that is unprecedented. And as analysts point out: This new format could appeal to gamers.
And that’s yet another demographic Netflix could capture as its number of subscribers continues to skyrocket.
Adam Anderson is the managing editor of Bizmology. He has worked at Hoover’s in several editor roles writing about various industries since 2004. He has his BS in media studies from the University of Texas. Follow Adam on Twitter.
Photo courtesy of Netflix.