Netflix is here to stay, TV licenses are fading away

Checking the networks schedule for the time of your favorite show; turning the TV on just a few minutes early, so as not to miss a single second; leaving the room during the never ending advert breaks to brew a cuppa; your siblings or other half shouting ‘it’s on’ when the adverts are over; rushing back in front of the TV with a half brewed tea. This is what watching films and TV shows used to be like, back in the old days.

All of this is now near non-existent. The way we consume content has changed drastically due to the invention of streaming services by Netflix. The multimedia giant studied the way people watch TV and said to themselves “What if we had, like, none of that?”. And with that they created a concept that changed the world forever: streaming services. Now people can watch whatever they want, whenever they want and pause it anytime without watching adverts; all of this for a monthly fee that’s lower than your average cable bill.

It almost sounds too good to be true; and it surely took some time to convince people. While it was not an instant success, Netflix increased in popularity quite rapidly. If in 2015, the streaming service only had around 50 million paying subscribers, that number tripled in just five years. From 2020 to 2022, Netflix saw continuous prosperity, surpassing 200 million in 2021.

Source: https://www.statista.com/chart/7677/netflix-subscriber-growth/

This innovative business model has proved so successful that many multimedia companies are now jumping on board. Disney, Paramount, Hulu, even Amazon have all launched their own streaming platforms with a paid monthly subscription.

But has this affected TV viewership? Yes, in a major way.

In the UK, watching TV involves purchasing a TV license. This license costs £159 per year and includes access to I Player, the streaming service offered by the BBC. The British broadcasting corporation has blamed their latest wave of lay-offs on income losses due to more and more people refusing to pay for a TV licence. While TV licensing blames this decrease on a “rise in evasion, which has become easier as TV viewing moves online and both aerials and TV sets become unnecessary to watch live TV and catch-up TV”, this is definitely not the full story. Observing the data side by side, the first time TV licensing saw a decrease in purchasing was in 2018, when numbers went from 25,964 to 25,927; that same year, Netflix was surpassing 100 million subscribers. The trend of inversely proportional growth continues: in 2019, the numbers of TV licenses decreased to 25671, while Netflix reached and surpassed 150 million. In 2020 TV license sales went down even further, while Netflix reached 200 million.

Source:https://blogs.lse.ac.uk/medialse/2022/02/11/time-for-fresh-and-radical-thinking-on-the-licence-fee/

And this is not surprising. In addition to the advantages already mentioned, television has done little to reach the youthful audience of present times. When you turn on the TV it’s either news about politics which you can read online, real estate shows featuring houses that millennials or gen Z can never even dream to afford, or game shows that nobody is interested in. Why pay £159 per year for this, when you can pay £6.99 per month, enjoy a much better user experience and get content that you are actually interested in? From my side, I find no reason.

Netflix reinvented the way we watch TV forever; now the viewer can have all of the gain, and none of the pain. The streaming service idea was a major hit with audiences (exemplified through the high and rising number of subscribers) as well as other multimedia giants who adopted it. Television viewership definitely felt the shake-up, with TV license purchases declining rapidly. British television is clearly aimed at a more mature audience, and does little to appeal to a youthful market. There may be a decline in interest even in older generations, as most people nowadays put the telly in the living room for background noise, rather than actively watching it. But can television save itself? Without a crystal ball, I could not tell, yet it does not look hopeful.