Netflix’s online video streaming service and its impact upon the cable and broadcast television industries proved to be hot topics of discussion among analysts and executives gathered at the UBS Global Media and Communications Conference on Monday.
Unveiling the results of research conducted by his company, Dave Poltrack, the chief research officer at CBS, pointed to a three percent decline in broadcast television viewing so far this year. An official of one advertising firm released a forecast predicting that broadcast television’s share of the national advertising market will fall for the first time next year. As statistics show that households subscribing to Netflix watch significantly less broadcast television than homes that do not, Poltrack told his audience that “the growth of streaming is seen at this point to be the major disruptive force in the media landscape today.” Although Todd Juenger, a media analyst with Bernstein Research, cautioned that the drop in ratings resulting from the migration of viewers from broadcast to online streaming platforms would have a significant impact on advertising revenues, Poltrack argued that streaming services such as Netflix offer broadcasters the opportunity to syndicate old shows that can help build a viewer base for new programming. Because Netflix competes for viewers but not for advertising dollars, Poltrack described Netflix as “a formidable competitor” that can also be “a valued partner as well.”
Meanwhile, Ted Sarandos, the chief content officer at Netflix, suggested that cable operators and broadcasters should alter their business models to fit the new online streaming and video-on-demand (VOD) paradigm. Among other things, Sarandos said, cable operators should invest in new technologies that allow advertisers to “serve ads dynamically so that VOD services will be able to support the delivery of television shows in an on-demand fashion.” As such, Sarandos maintained: “if you want to fix the economics of ad-supported television, you have to fix the product.”