Death of Cable

(3 minute read)

Do you subscribe to cable? If not, you're not alone. The statistics speak for themselves: As of Q4 2015, 48% of all U.S. households have access to a video on-demand service. The number of households who have broadband but don’t subscribe to TV grew 16% from 2012-2014. Paid TV subscriptions continue to decrease as SVOD (Streaming Video On Demand) continues to increase YOY. Forty percent of the decline in TV ratings is attributed specifically to the increase in streaming video on-demand services

While the consumer can choose from a variety of streaming subscriptions, Netflix remains King with 83 million subscribers around the world as of July 2016.


Netflix’s success is an excellent example of innovating by listening to the consumer. In our last post, we explained the way Netflix overcame marketing myopia with movie rentals by being in the media streaming business as opposed to Blockbuster’s focus on selling their product. 

As Netflix expanded from movies to television shows and original content, its customers remained the nucleus of the company’s positioning.


Netflix listened to and addressed the complaints they heard from traditional TV consumers:

  1. Advertisements are annoying and overbearing 
  2. Consumers want to watch TV on multiple screens, not just a television
  3. Consumers are impatient: Waiting 1 week for the next episode is too long
  4. Content must be engaging and relevant to the individual’s interests
  5. Pricing for cable is inconsistent and contracts are cumbersome
  6. The cost of cable or satellite is not equal to the benefit of the service provided

Netflix provides ad-free (avoiding 160 hours of ads per year for the customer), “binge-able” content, available on multiple digital devices. With over 1,000 TV shows and 4,500 movies, the options are endless but the interface is customized to each consumer’s preferences and behaviors to serve up relevant content. All of this for less than $12/month and zero contracts.


Video streaming, and Netflix specifically, took an existing model, listened to the consumer, and improved the business and technology based on the feedback. 

And they continue to focus on the future, ready to pivot as customer preferences evolve. As Reed Hastings, CEO of Netflix, puts it, “We’re figuring out every year how to use the Internet to make a great consumer experience. Every year is an experiment.” 

Much like Making a Murderer, pay attention to the evidence, or you might be found guilty of losing your customer focus. We can all learn from Netflix - keep your eye on the consumer, and the rest will follow.