TV stations dig their own graves as Netflix causes ratings to plummet

Netflix, a copyrighted video website, has become a new force impacting the traditional television industry. The industry has reached a consensus that the ratings of American television experienced a strange decline last year and has continued to this day. The biggest "culprit" behind the scenes is Netflix, which is becoming more and more popular.

Now there is more evidence for this conclusion. Analyst research shows that Netflix accounted for 46% of the decline in ratings for US TV stations last quarter.

Michael Nathanson, a technology industry analyst, recently released a research report stating that Netflix streamed 10 billion hours of video last quarter, accounting for 6% of the time American consumers spent watching TV and video programs.

If converted into indicators related to TV station ratings, 43% of the decline in ratings was caused by Netflix.

The analyst pointed out that Netflix's trend of diverting TV viewers and cannibalizing TV ratings will continue. If we look at the share of traditional TV and video viewing time, Netflix will climb to double-digit share in the next four years, which means that the decline in TV channel ratings will mostly come from Netflix.

For traditional TV stations, TV channels and Hollywood that provide TV series, they have indeed "dug their own graves."

As we all know, traditional TV stations and Hollywood production companies have provided Netflix with the rights to replay TV series and reality shows. Copyright sales have high gross profit margins, and these companies are happy to sell copyrights. However, Netflix has relied on these copyrights to develop rapidly, which in turn has affected the TV station's ratings.

There are now some signs that TV stations and Hollywood production companies have realized the dangers of their practices and have begun to cut back on the sale of TV series copyrights. However, at Netflix's first quarter earnings conference recently, management said they had not seen a reduction in the supply of TV series copyrights.

Netflix's CEO Hastings has already made preparations. He does not want to rely solely on TV station leftovers and is expanding his investment in original dramas.

In fact, Netflix's original plan was launched with the success of "House of Cards", which also promoted consumers to migrate from TV channels to video websites.

The American technology news website Recode summarized Netflix's business model that relied on TV stations to achieve success: first, it used "old TV series" that had already been broadcast by the TV industry to build its own business and erode the audience of TV channels.

Subsequently, using the revenue from on-demand “old TV series”, Netflix began to produce its own “new TV series” so that they could further divert viewers from TV channels.

It is not difficult to find that this business model has become a virtuous circle for Netflix, but a vicious circle for TV stations and the TV industry.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.