Revolutionizing Entertainment Consumption

    The Diffusion of Innovations Theory is the theory of how, why, and at what rate new ideas and technology spread. Being in the midst of the dog days of summer, Netflix has been a source of entertainment lately and so I thought this would be a fitting widespread innovation to analyze. 

    Netflix is a company that has had incredible success and has revolutionized the way the world consumes television and movie entertainment. Although it wasn’t quite the company we know and love today, Netflix started in 1997 as a video-rental company by our very own Marc Randolph and Reed Hastings. In 1999, Netflix began offering an online subscription service through the internet in which subscribers chose movie and television titles from their website and then were shipped those titles in DVD form with prepaid return envelopes. Customers rented for a flat monthly fee as many movies as they wished. In 2007, Netflix started the infamous streaming option where subscribers could stream some of their movies and TV shows directly to their homes via the internet. In 2010, Netflix offered a streaming only subscription and by 2016 it was available in more than 190 countries. (Source)

    Netflix caught on and spread in the beginning because they focused on convenience. You picked the movies, they shipped it and had pre-paid envelopes so you just shipped them right back all for one monthly fee. When they introduced streaming, they caught on and spread for the same reason: convenience. Viewers had access to an archive of movies and shows to watch all from the convenience of their living rooms. While Netflix wasn’t the first company to create streaming, they were the first company to find real success in this area and that is why they had so many early adopters. Another reason Netflix found so much success was because they were the first communication technology to offer whole seasons of shows rather than one episode at a time which introduced the world to binge-watching. 

    Some people were late adopters because they weren’t as familiar with the internet and streaming and were loyal fans to their cable TV. But today, with more than 251 million subscribers, there aren’t many who consider Netflix a non-essential.  Netflix’s closest competitor, Hulu, has only 44 million subscribers. Some don’t adopt the idea at all because maybe they do not prefer to have the option of binge-watching readily available at all times. 

    The cons of a platform like Netflix is like most technologies now, they have an opportunity to learn about you through data collection. Netflix knows your viewing history which helps them predict your future viewing preferences. They know when and how long you watch for and which devices you watch from. Although it ultimately did not go through, there was even a campaign for Netflix socks that would detect when you fell asleep so that Netflix could pause the show or movie you were watching. A major con of consuming this service is absolutely the lack of privacy. 

    For most, it seems the positive of endless entertainment outweighs the con of lack of privacy. With communication technology, it seems that the cost-benefit analysis is mostly based on personal values and preferences.