These are tough times for Netflix, the company that changed our world and celebrated its 10th anniversary in Ireland earlier this year.
Last month it reported that for the first time since before it arrived here, it had lost subscribers. While it lost only 200,000 of its 222 million paying customers– the decline was enough to precipitate a collapse its share price. Within 24 hours of the bad news emerging, shares in the company nose-dived by 35 per cent to around $226.
That decline represented an eye-watering €50 billion drop in the company’s value in just one day, and things were only going to get worse.
In the middle of last week, the Netflix share price was around $196 and the graph of its value to investors over a five-year period looked like a gruelling mountain stage of the Tour de France with an long, brutal and steady incline followed by a terrifying descent at the end.
The poster-child for streaming content has responded with various measures, none of which are likely to gladden the hearts of its paying customers. First, it started to increase its charges – in Ireland the cost of a standard package for new Netflix subscribers is €14.99, up from €12.99. A more basic package has climbed from €7.99 to €8.99 while the price of its premium package – which allows subscribers to watch and download content onto four different devices at the same time – went up by €3 per month to €20.99.
And it warned that it planned to clamp down on people piggybacking on friends and family accounts, which means you may not be able to access your mammy’s Netflix from your house while she still picks up the tab in her house. And ads might be coming down the tracks, something which has long been a big no-no for Netflix.
But amid all the bad news, it is still celebrating its 10th anniversary in Ireland and by any measure, the journey it has been on – and the one it has taken us on since it arrived in Ireland in 2012 – has been nothing short of breathtaking.
In early 2008, Pricewatch wrote about Netflix for the very first time. We say we wrote about Netflix but we actually referred to it in the most fleeting fashion in an article about the high cost of DVD rental. In that article, we lamented the fact that a night in with the Bourne Ultimatum would have set us back just over a fiver and talked about the still-distant prospect of downloading films from the likes of Microsoft – a company which seemed to be making all the running in the world on downloads.
It was only the fifth time Netflix had earned itself a reference on the pages of The Irish Times.
First wave
Fast forward four years and we mentioned Netflix – which by then had stopped being a DVD rental company and become a video streaming service – for a second time. On this occasion the article was actually about the company and its move into the Irish market as part of the first wave of its expansion outside of the US and Canada.
“In the long term, internet TV – the idea that you can click and watch anything you want – is such a powerful concept that we are investing heavily,” we quoted the chief executive and co-founder of Neflix, Reed Hastings, as saying in the article, which ran to 289 words.
“While the company is promising subscribers ‘tens of thousands of hours of great film and television’ the initial content on the site appears limited, with few new releases available to Irish customers,” Pricewatch said somewhat unenthusiastically, displaying that ever-present prescience which made us our billions and allowed us to retire to a life of lavish spending before the age of 50 simply by spotting a game-changing tech revolution early on.
Sigh.
We had no notion that it would soon swell its subscriber base to well over 200 million, including around 600,000 in this country
No, sadly, we didn’t have a clue that a service we figured was worth less than 300 words was on the verge of changing the world.
We had no notion that it would soon swell its subscriber base to well over 200 million, including around 600,000 in this country or that it was creating a market that would allow others, including Amazon Prime, Disney, Now, Hulu Apple TV and HBO Max, to thrive.
We had no idea that it would soon be making a shedload of content in its own right, becoming one of the biggest television and film production companies in the world, adding more than 500 original titles in 2021 with plans to spend over $20 billion on programming this year alone.
Nor did we know we were being handed remote control of a world of television and films and freed of the need to settle down in front of the box at a particular hour on a particular day to watch a particular programme.
World of programming
It also opened up a world of programming that might otherwise have passed us by – Call My Agent, Lupin and Squid Game are three that instantly come to mind – and it rescued soon-to-be beloved shows such as Breaking Bad and gave others such as Friends a second – and perhaps a third or fourth – life.
It also gave us phrases like “binge watching” – something we only did in times past when we rented a video player and five VHS videos from Clan Electrics in Galway for one night only back in the 1980s – and “Netflix and chill”, a phrase that might not mean exactly what you think it does.
So profound has the impact of Netflix been, it is almost hard to imagine, as we celebrate the 10th anniversary of taking out our first subscription, the world before it came along.
Hard but not impossible and here are just some of the ways our world has been shaken up since it first came to town.
Net worth
When the World Wide Web was born in the early 1990s, the notion was that it would be a free-for-all and the very idea that anyone would ever pay for any online service was regarded as simply ludicrous. When, as ireland.com, this newspaper first asked people to pay a fairly nominal sum for some of its digital content as this century dawned, a certain cohort went ballistic. “How dare you? This is an absolute disgrace,” was the typical response. “It is the end of the free press as we know it in Ireland,” wrote one particularly enraged, if ever so slightly confused, individual under one story announcing the new subscription model.
The Netflix subscription model normalised the notion of paying for content you wanted and made it just a little easier for other content providers
Of course, making everything eternally free made things tricky for content providers – including this newspaper. While providing news and sport and features and music and television and film and all the rest online at no cost to anyone except the people actually generating the content might have been an attractive proposition for many users, it was never going to be a sustainable business model.
The Netflix subscription model normalised the notion of paying for content you wanted and made it just a little easier for other content providers to convince those who consumed their services that paying for it was the norm rather than the abomination some suggested it might be. While some people might still resent paying for digital content – be it video, audio or text – it is not the abomination some once viewed it as.
Cloud land
In a pre-Netflix world, many people (including Pricewatch) collected DVDs – or VHS cassettes or Blue Ray or whatever as well as CDs and vinyl – but in the post-Netflix world everything suddenly migrated to the cloud. Sadly, the cloud is not actually a cloud but a collection of very un-cloudlike computer servers with red and green blinking lights that drain huge amounts of power from our national grid, but that is an entirely different story.
The bottom line is, we don’t own as much stuff as we once did and are now happy to simply stream it from somewhere not as magical as we think to our tellies or the talking digital assistants that sit quietly in the corner of our rooms listening to us argue and play and watch Bridgerton. The plus side is, we no longer have to schlep to video stores to fight over what films to rent and we have access to virtually every song ever recorded on our smartphones while the CDs and DVDs and records that used to lie strewn all over our floor have disappeared.
The end of money
When Netflix came to town, actual money was still all over the place. That is not to say we had loads of it – sadly – but what we did have tended to come in the form of coins and notes. One of the most significant changes to our world in the past decade has been the relentless march of technology towards the once impregnable citadel of cash.
The assault was intensified in Covid times with more and more people and shops eschewing dirty money in favour of contactless and card transactions. While money is still with us, the signs are not promising that it will be with us when Netflix celebrates its 21st birthday in Ireland in 2033. Last year, contactless payments accounted for more than half of all card transactions, more than double the figure recorded in 2017, according to the Banking and Payments Federation Ireland (BPFI).
In just three years ATM withdrawals fell €7 billion to less than €13 billion, with three million contactless transactions recorded each day last December, up from 2 million a year earlier. That trend is only going to accelerate as more people move their spending into a contactless and digital world.
The end of the physical office
Pricewatch wrote that first article, the one which made fleeting reference to Netflix, from a disgracefully cluttered desk in The Irish Times offices on Tara Street in Dublin. We wrote the second one – which marked its arrival into Ireland – from the same desk which, in the intervening four years had only grown more cluttered. This article, however, is being written from a couch (sorry, a carefully laid out and ergonomically correct work space) several kilometres from the mother ship, a reflection of how work has changed for so many people in a post-Covid world.
The idea that hundreds of thousands of people would be able to work from home without any significant loss of productivity – and in many cases with a significant gain in productivity – would have seems outlandish a decade ago. But we are where we are and we are probably better for it – at least in some ways.
How much better? Well according to research published by the Department of Enterprise last week, people who work remotely can make savings of more than €400 per year in reduced transport costs and while they spend around €100 more on heating and electricity as a result of remote working, they are still better off by €304. The research also pointed to “significant” reductions in carbon emissions due to decreased commuting and it estimated that remote working has the potential to save 164,407 tonnes of CO2 per year. Then there is the whole work-life balance thing and the reduced stress levels as a result of the removal of the rush hour commute from our world.
The end of ads?
In times past, ads were a necessary evil when watching the telly. Every 15 minutes or so, there would be a jarring break in whatever was on followed by a equence of 30 or 60 second plugs for coffee and cars and detergents and toothpastes and whatever else the world’s mad men and women wanted us to buy.
Netflix effectively killed all those ads. Today months – if not years – can pass for a person who relies heavily on streaming services without them even seeing an ad on the telly – there is obviously product placement, something which is, arguably far more insidious, but the actual ads are a bit of a distant memory – at least for now. They could be on the way back and in a big way, too.
According to reports last week, Netflix is looking to roll out a cheaper ad-supported service in the US by the end of the year. The move will reverse a long-held position that ads would never be seen on the platform. In April, Reed Hastings said the company would consider rolling out an advertising-supported platform and would “figure it out over the next year or two”.
The year or two has become a matter of months and in the note Netflix told employees that “every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options.”
Twitter thoughts
We also went in search of the views of Twitter users and asked people if they were to identify just one change to our world over the past decade what it would be. There were many gloomy but entirely understandable references to the climate catastrophe the world is facing and conflict as well as these comments. Having read these and more, we are not entirely sure the world is in a better place that it was before we knew what Netflix was.
"The desire for instant satisfaction/wanting it all now. I want something and I want it now. Be it next day delivery, 20 minute grocery deliver (e.g Gorillas), instant beauty (filters/surgery/) the perfect partner: swiping next, next, next - not willing to work at things."– Hannah Barkhoff
"How social media (Instagram primarily) has destroyed so many young girls and women's confidence. Filters are the worst thing ever invented. I know they have always existed in magazines over the years etc. but now it's constant. Our girls being exposed to such untruths." – Niamh Sherwin Barry
"Replacement of people by computers in the delivery of state services, financial services, in the booking of all types of events and in what was previously called customer service." – Julie Brosnan
"The speed at which disinformation can be propagated. To the point where people will vote for people and adopt policies and behaviour that actively hurt them and their communities. Think vaccines, climate change..." – Mike Reidy
"The financialisation of everything: housing & education are notable examples. Healthcare's up next as today's NMH gift to private interests will demonstrate over time." – Karl Stanley
"Covid – it's changed the way we interact, the way we work (home office overnight/ move to the country vs staying in Dublin), the way schools interact with parents (less face to face), jobs availability (hospitality industry drained), health care (burned out)." – Sarah Hegarty
"The further deepening of consumerism as a form of identity and consumption as performative membership of the materialist quasi-religion, combined with greater concentration of capital and enfeebling of journalism, leading to the dire state we find ourselves in. Amused to death." – John P Russell
"The absence of cash on your person. Cash transactions replaced by tapping your phone, card or watch. Donations to charity bucket collections can even be performed with a tap. Would we have imagined this 10 years ago?" – Gina Naughton
