Will Netflix kill the local TV station?

Few weeks ago, Netflix became available in most countries. This news was welcomed by every movie buff and TV series lover out there. People can now stream their favorite content anytime and anywhere at a small subscription fee without being restricted by proxies and having to go through the hassle of VPNs.

The beauty of Netflix and similar services such as Hulu, which is my personal favorite, is that unlike popular belief, you don’t need a super duper internet connection for it to work, but rather with a minimum of +2Mbps will allow you to stream and enjoy HD movies. Of course the connection should be stable and you should not be running other online services at the same time. It is actually faster and more cost effective to stream a video than to buy and download the HD version. Streaming in general is optimized to consume the video at less bandwidth vs the full HD download, and people will finally and gradually move away from the habit of storing movies that they will never watch again on infinite number of hard drives, when they realize that these same movies can always be found online anytime, anywhere.

Unfortunately, not everyone is thrilled about the news. The media industry is rather worried about Netflix’s sudden availability as if they never expected it to operate outside the US. Most local TV stations over the past decade missed every opportunity to ride the wave and embark on the technological journey of the internet. Instead of leading the online revolution and creating monetizable local platforms, they followed in the traditional shadows of regional cable giants feeding on their leftover content and providing local users with a second-hand service, by broadcasting older reruns and many times already watched content (on other online platforms). Their market share is mainly producing low budget dramas and game shows for their local audiences while fighting each other over the primetime evening news.

Local TVs are not being able to properly monetize their content especially now with advertisers shifting much of their budget to online platforms. One of the main reasons is that for the past years, they have been giving away all their content for free, they have poured everything on Youtube, and made people believe that content is not something worth paying for. Now, they are desperately looking for a way out because people can no longer wait for content to be aired in their country many days and sometimes months later. People eagerly look for fresh content to be consumed as soon as they find it wherever and whenever they are on any available platform. With the variety of connected devices, people can consume content from their mobiles, desktops, and mostly from their connected TVs (via smartTVs, Apple TVs, Google Chromecast, Amazon Fire Stick and similar devices). Today the connected TV screen is regaining its online viewing marketshare and competing with mobile devices because the large screen viewing experience is still unbeatable when it comes to watching long hours of media, especially when watching with family and friends.

Unlike what it seems, local TV stations are not the biggest losers, but rather the giant middlemen (i.e cables) that are fighting battles on various fronts: The content front with local channels, the distribution front with Telecom operators and IP TV providers, and finally the online front with international players like Netflix and Hulu, without forgetting the growing custom content that commercial brands are creating for their online platforms.

The opportunity is still there (at least for the time being) and local TV stations can still make it after all, but this cannot happen with the current mindsets and business models. Drastic change must happen in order to evolve and adapt to the current needs and opportunities. They need to dare to invest in new ideas, work on innovative programming, and most important create engaging interactive local and cultural content. TV stations need to realize that the size of an audience is not bound by the geographical boundaries of the country, but rather starts locally moving to the diaspora community in order reach regional and international audiences.