The year begins with new competition in the form of Netflix, available on a connected platform near you, but as Julian Clover writes there are challenges ahead.
So it’s finally happened. Netflix has launched in the UK and there it is at Number 5 in the Top Free iPad apps. Lovefilm is there as well, boosted by the publicity generated by its new rival and in its own right, though as an established service it would have had more opportunities for download in previous weeks.
The presence of both streaming services on the Apple platform proves at least one thing; collectively we’ve all decided that this is the year for smart TVs and all that is over the top. We’ve already heard that Netflix will be available on Samsung TVs and no doubt there will be more, though Netflix will first need to establish itself as a brand outside of the Twitterati and PowerPoint presentations of the conference halls.
What I’m currently failing to understand is the concept that the consumer need never buy a television again. True, after a few false starts there seems to be a consensus that TV manufacturers will update their sets in the same way that pay-TV operators have traditionally done, but that of course requires a revenue stream.
In trying to secure that the manufacturers are surely getting further towards a collision course with the pay-TV world. Except that the content is yet to match that found in pay-TV, at least in premium.
So when you are told that Doctor Who is available for streaming, you better warn the kids that it will be Christopher Eccleston and not Matt Smith who steps out of the TARDIS and for Harry Pearce his Spooks operatives are largely still intact.
There is the perceived threat of cord cutting to pay-TV providers, but unlike the US, Virgin and Sky are already there with electronic stores and the ability to take content around the home using just the devices being readied by Netflix.
I sense that much of the initial achievement by Netflix was against a US cable and DBS industry not so much taken by surprise as not quite ready to meet the challenges of over-the-top. We now see this changing and the European market has known for long enough that Netflix and its like were coming on over. So the larger operators at least have been able to lay the groundwork with their Go-type services.
As it stands Netflix and Lovefilm are more likely to be substitutional for the likes of Blockbuster than the pay-TV market.