Like most binges, mine began on Saturday night. I planned to have one... maybe two. Before long, I'd had four... then five. By the time I'd finished the sixth one, I crashed and fell asleep. I woke up late Sunday morning and immediately continued the binge. By Sunday night, I'd had 13 and was desperate for more. But it was all gone. The entire season of House of Cards had been consumed and the only hope for a fix to my new addiction was to go back to my Netflix queue and watch the first 13 over again -- which, I assure you, I will do -- while waiting for season two of this amazing series to become available.
In the past week, I have listened to the media noise with great amusement. Speculation circles around the idea that there is nothing to stop people from signing up for a 30-day free trial of Netflix, watching the entire series and then failing to subscribe after the free trial ends. The phrase "there is nothing to stop people" has appeared in numerous articles and online postings, so I cannot attribute the idea's point of origin. However, it is interesting to note that the phrase suggests a consumer conspiracy to take unfair advantage of this company by abusing a standard sales tool that is common business practice. The assumption is that a mass action like this could prove ruinous to Netflix. Nothing could be further from the truth.
According to their website, Netflix has more than 33 million paying subscribers of their streaming service. 33 million x $8 (rounded up by a penny/subscriber for the sake of convenience) amounts to a monthly gross income of $264 million. Now, multiply that by 12 and ask yourself how much of a problem it is if even a million people try to take advantage of Netflix for 30 days. The math just does not support this speculation. However, the aforementioned media comments suggest that there is an overwhelming fear of what might happen next.
Quite a few years ago, I had the great good fortune to meet and speak with Netflix co-founder and CEO Reed Hastings at an industry conference. Netflix was still in their DVD-by-mail mode and had already acquired a couple million users. Even at that level, it was a disruptive market opportunity. Hastings genius was soon to become apparent when he found a way around the cost of doing business through hard copy deliveries via U.S. Postal Service. Certainly, there was a misstep when Netflix announced the abrupt shuttering of this Luddite model. Yet, it proved to be nothing more than a stumble -- far from the fall that Hastings detractors predicted.
Every industry needs to adapt their business models to changing market conditions and the demands of the consumer. Ironically, networks and cable channels initiated this process when they began marketing entire seasons of successful series via VHS and DVD. Thanks to these full-season boxed sets, the notion of "binge viewing" has become exceptionally seductive to a consumer base that has learned they have the power to demand program availability whenever and wherever they want it. Attempts to fight this trend and continue to dole out episodes on a weekly basis will be met with great resistance. And by the time that networks and cable channels come around, Hastings will have focused his genius on setting the next trend.