How does Netflix aim to compete in the UK market?

NetflixIPAD

What has a failed moon landing got to do with the arrival in the UK of internet video streaming service Netflix?

Well the story goes that Reed Hastings, a computer engineer from California, was inspired to start the on-demand service after being charged late fees for failing to return a copy of Ron Howard’s Apollo 13 to his local video store.

It took him and a couple of his work mates a year to get things up and running, but they haven’t looked back since launching in 1998. Initially working within the confines of a traditional pay-per-rental model, Netflix has since built its reputation on the business model of flat-fee unlimited rentals without due dates. In the USA the service includes a DVD rental service, much like that offered by LOVEFiLM in the UK, but it is their ever-growing ‘streaming’ facility, which has spread like wildfire.

Arriving in the UK last month with more than 20 million ‘streaming’ members under its belt, there is no doubting it has established itself as the world’s leading internet subscription service for films and TV programmes. Indeed it’s so dominant that should you fancy catching a movie either at home or on the move you can do so on over 700 devices including game consoles, Blu-ray players, tablets, mobile phones and of course your television.

So how does Netflix work?

In simple terms the Netflix concept is based on the idea of streaming content to any suitable device. Users just pick a movie or television show from those available and can watch it immediately anywhere that they have internet access. As has already been touched upon, it’s a subscription service. A package costing £5.99 a month offers unlimited viewing on any device, while the no commitment policy offers the flexibility to cancel the subscription at the click of a button.

Why would you bother with Netflix if you are already a LOVEFiLM customer?

Interestingly, when Netflix launched in the UK it’s chief product officer, Neil Hunt, stressed that the new service was not aiming to compete with LOVEFiLM but viewed itself as a ‘complementary’ service. Many of the deals (to stream movies and television series) have been organised exclusively so material available to LOVEFiLM customers is not available to Netflix and vice-versa. Taking such circumstances into account customers are urged to try the services side-by-side before deciding which has the most compelling content and reliable delivery.

Given that their long-standing history of streaming content online, the team at Netflix believe they are not just a competitive force in the market, but also the most forward thinking and innovative. Eager to ensure that members enjoy the best possible picture quality they have focused on developing smart technology which is capable of automatically dealing with bandwidth congestion. For those users who like to be in control, the system can also be operated manually.

Why pay when on-demand television services from the likes of the BBC and ITV are free?

It’s a fair question really. As with LOVEFiLM, Netflix appears happy to bill itself as a complementary service. While the BBC’s iPlayer and alike tend to focus on recently released material which is stored only for a short period and designed to help viewers catch up on the odd missed episode of their favourite shows.

Netflix bills itself as a complementary service with a huge back catalogue of boxset series allowing users to binge on their favourites. While some material remains available elsewhere for free, Netflix is hoping that their easy-to-use archive will attract users looking for a one-stop shop.

Interestingly it is Netflix’s recommendation system and social discovery applications which they trumpet as their best features. Recognising that users can sometimes be a little conservative in their viewing choice, they’ve spent millions of dollars designing bespoke algorithms with a view to highlighting content which matches an individual’s personal tastes.

How focused are Netflix on providing a comprehensive archive of film and television material?

As you might imagine given the complex rivalries between film and television studios, it has not been easy, or indeed financially viable, for streaming services (and their video/DVD rental antecedents) to secure the rights to sell and rent an all-inclusive back catalogue of material. If you’re thinking about signing up with a view to always finding that obscure film you’re after, there’s a chance you’ll be disappointed.

However, that’s not to say you’ll find Netflix an unrewarding experience. Claiming to be a discovery vehicle, the system gears itself towards making suggestions tailored for users based on viewing choices and specific tastes. Yes, that means a narrower selection to choose from, but one which should engage viewers all the same.

If you fancy giving Netflix a try make sure you take advantage of Quidco’s exclusive Netflix offer! Get £15 cashback when you start a Netflix 30-day free trial and watch 5 hours of movies and TV shows. Get unlimited films & TV episodes instantly streamed straight to your TV, computer and various mobile devices.

How do you choose to watch films and television shows? Do you still rent DVDS at a local rental store or do you prefer to watch online? Do you think services like Netflix are the future? Let us know in the comments section.