Netflix shows drown in hype, but company is yet to peak

With subscriptions on the rise, Netflix is like a Marvel villain targeting world domination, with a plan to be available everywhere on Earth by the end of 2016

Netflix is one of those things, like Twitter, Spotify or craft beer, that if you don't indulge in you may grow sick of hearing other people mention.

With its solid catalogue, its advertising-free service and (for now) its don’t- think-twice pricing, Netflix tends to be referred to in tones that imply it’s a cross between a legal high and a revolutionary new tool for living.

From an artistic standpoint, it has yet to outshine competitors HBO, Showtime and AMC. Orange Is the New Black, one of the key Netflix Originals, isn't as good as people say it is. House of Cards isn't as good as people used to say it was. As for the unbearable The Unbreakable Kimmy Schmidt, my spirit was indeed broken.

That’s a subjective verdict, of course, and the company is currently toasting 34 Emmy nominations that subjectively say otherwise. Awards and nominations are beautiful marketing tools, and for newer content producers they represent industry acceptance. Netflix doesn’t need Emmy validation, though. The Californian company is insanely successful.

Some of its content may be overhyped, but Netflix itself has yet to show signs of the same malaise. Reports of its second- quarter results contained the three magic words – “better than expected” – with 3.3 million new subscribers taking its tally past 65 million.

Like a Marvel villain, Netflix is targeting world domination, with a plan to be available everywhere on Earth by the end of 2016. Non-English-language shows and a slate of original films are two weapons of choice. It is so confident that it is talking about putting up prices, which might prompt existing subscribers to take stock.

Still, Netflix has got all the money in the world for promoting itself to potential new subscribers and keeping current ones glued. This soon becomes obvious in a market as small as Ireland.

Two 2015 Netflix campaigns linked to original programming are eye-catchers for different reasons. The first was a gloriously retro campaign for Better Call Saul, which it advertised on the doors of Eircom phone boxes. The second was the online home page "takeover" ads that it booked for the launch of another original show, Bloodline.

RTÉ rival

That these campaigns appeared on RTÉ’s website, with the invitation to “watch all episodes instantly” and tabs marked “get watching”, was striking, as over on RTÉ Television the broadcaster has a policy of not running ads for media rivals that include calls to action. Either the rules are applied differently online or RTÉ does not see Netflix as a competitor in the same way that it sees Newstalk as a competitor.

But it is one. Ominously for all linear channels, “Netflix” gets dropped into sentences in place of the word “television”. What did you do last night? Oh, I just watched Netflix for an hour or six.

Over time, it is reasonable to assume that Netflix, estimated to be present in at least one in five Irish households, will have an impact on viewers’ loyalty to old channel brands.The only option open to broadcasters to prevent this drift will be to make serious levels of investment in content that people want to watch.

Content production

Raising that finance may not be as easy for some as it has been for the publicly quoted Netflix, which began 2015 by announcing it would finance accelerated original content production with more than $1 billion (€905 million) in long-term debt.

Netflix executives are not in this game because they enjoy hanging out with Kevin Spacey and Tina Fey. Instead, they have calculated that producing original content is a more efficient way of doing business than acquiring exclusive content rights through expensive licences.

After spending $607 million (€549.3 million) on global marketing in 2014, the company is this year devoting a bigger slice of its marketing budgets to promoting Netflix Originals. With all that money poured into just the marketing, the actual content production budget must seem scary to its TV competitors, right? That depends on how they feel about a sum of $5 billion (€4.5 billion), its ballpark figure for 2016.

Netflix never reveals its "viewing metrics". It never says how many people watched a particular series, episode or film. But with these riches it can afford a few flops. It can also afford to set out to cater for niche and regional tastes. Not every series has to be as nakedly for-the- masses as, say, Marvel's Daredevil.

No company can expand forever. But right now Netflix is very far off peaking – which is more than can be said for some of its returning shows.