How did Netflix Start?

Uses and Gratifications Theory: The Importance of Netflix in Our Lives “Just one more episode, then I’ll study” is what most people have been saying as they are neck deep in the latest season of the popular Netflix Original Series “House of Cards”. Netflix is one of the most influential mediums of our generation. Netflix and other streaming services like Hulu and Amazon Video have the broadcast media companies scrambling to catch up. It has changed the way the current generation of people consume media. The theory of Uses and Gratifications can helps us explain why people are using media, cutting cable and using streaming services like Netflix and YouTube as their form of entertainment.

Founded in 1997 by Reed Hastings and Marc Randolph, Netflix started as a DVD rental and sales company, you could say it was an internet version of Blockbuster except none of the non-existent late fees for a rental that was returned on time… bad Blockbuster memories. In 1999, Netflix introduced their monthly subscription concept. At the beginning of the 2nd millennium, Netflix accumulated over 300,000 subscribers for their monthly DVD rental services. Unfortunately, they were losing money because cost of business was overpowering the incoming revenue. Hastings and Randolph decided they needed to try to sell their company and get out while they could. An offer was proposed to Blockbuster for them to take over Netflix, and turn the platform into Blockbusters online store, if you will. Blockbuster turned down the $50 million offer. Which left Hastings and Randolph scrambling. Fortunately, Netflix saw some good days after the deal with Blockbuster fell through. Like any business, they had their up and downs. In 2007, they had mailed their billionth DVD, and shortly after that they decided to move away from that business model.

They introduced video on-demand via the internet in late 2007. Throughout the years, they continued to build their library, which brought in more business to the point where we are today. Netflix is the gold standard for streaming services and original content for that matter. Coming in hot with just a hair over 137 million monthly subscribers which is approximately 49 million more subscribers than their closest competitor, Amazon. Netflix is one of the most influential companies our generation. Netflix started a revolution of streamed internet content. They acquired rights to many of the iconic shows of the past and the present to fill their library and give their subscribers something to watch. Iconic shows like: Friends, Breaking Bad, The Office, and Mad Men just to name a few. They’ve also flooded their library with what they call “Netflix Original Series”, and that includes titles such as: Stranger Things, House of Cards, Ozark, and Masters of None. Some of their original content has recently stirred up controversy, shows like: 13 Reasons Why and Making a Murderer.

These two shows, for example, bring to light things like mental health and the injustice of our justice system in America. 13 Reasons Why is about a young girl, who was bullied into suicide by her peers at school, and she made tape recordings about 13 people who contributed to her demise. Making a Murderer is a docu-series about a two men, Steven Avery and Brandon Dassey, but mostly Steven Avery. Avery was charged and convicted of murder back in 2007, but the evidence presented by the prosecution in the case was questionable, yet the jury convicted anyway. This show implies and attempts to prove that Avery was framed by a sheriff’s department in Wisconsin. These shows are controversial, yet relevant to our society because it brings light to things people don’t want to talk about or acknowledge in society. All of this leads to our question, how does Netflix and other streaming services help prove the Uses and Gratifications Theory? Let’s start off by explaining what the Uses and Gratifications Theory is. In the early 1940s, researcher began their research on what is now called “Uses and Gratifications Theory” trying to understand why people chose specific types of media. While that research was going on, women who listened to the soap operas on the radio were asked what they get out of listening to this program. According to Katz (1973), the women continued to listen to the soaps because “… emotional, wishful thinking, and learning”. They later classified those three reasons as gratifications.

From there on out, the researchers continued to pursue more understanding of how and why people chose their media. In its basic form, the Uses and Gratifications Theory attempts to explain the uses and functions of media for individuals and societies. There are three objectives to the Uses and Gratifications theory: 1. Explain why people use mass communications to satisfy their needs. 2. Understand the motives for an individual media use. 3. Find the positive and negative consequences of individual media use. (Rubin, 1983) We can use these three objectives to try to understand why people gravitate to media services like Netflix and specific shows on that platform. Let’s use a few hypotheticals to try to explain the Uses and Gratifications Theory and the objectives it seeks to understand: Haley is a hopeless romantic. She’s been let down by many guys up to this is point in her life. Haley loves to watch shows like Grey’s Anatomy and Love. A show like Grey’s Anatomy shows her the love she wants. She wants someone to love her like McDreamy loved Meredith. She also watches Love because she sees herself in the main character, Mickey.

A self-destructive girl who pushes people away who care about her. Finally, she finds someone who will put up with her antics. Haley watches these shows because to satisfy a need in her life that she wants fulfilled, but can’t get it; therefore, she puts herself in the shoes of the characters in the show, and lives their experiences. Some people have this need to feel to be included or “in the know”. Jack and his office friends are standing by the water cooler are talking about the latest season of Making a Murderer, but Jack is the only person that in the group that does not know what they are talking about because he hasn’t seen the show. Jack could ask them to explain the topic of the docu-series, but he don’t want to interfere with the conversation. Jack feels left our because he was excluded from the conversation because he has not watched the show. Jack uses the fear of being excluded to motivate him to watch Making a Murderer ensuring that he will be involved with the next talk about Making a Murderer. Both Haley and Jack practice the Uses and Gratifications Theory to fulfill needs in their lives. Whether it is needing to be loved by someone or being excluded in a conversation.

The Uses and Gratifications Theory is a way to explain their need to consume media in order to benefit their lives. The term “binge-watching” was coined during the rise in popularity of Netflix. According to Pittman (2015), binge-watching is watching multiple episodes a show in rapid succession during one sitting. There is nothing wrong with the idea of binge-watching, but like everything else it has its pro and cons. Pros: you could be binge-drinking rather than binge-watching. Cons: productivity takes a hit. That’s the big one. College kids now days are starting to experience issues with productivity and self-control when it comes to watching Netflix and other services. According to Bondad-Brown (2012), college students are one of the largest consumers of streaming services due to the lack of cable. She later mentioned that in a broader sense, millennials tend to consume streaming services over other generations. Once again, due to the lack of cable.

Most millennials don’t have cable because it’s too expensive and they can receive their entertainment through streaming mediums, like Netflix, much cheaper than they can through companies like Spectrum and DirecTV. This act is called “cord cutting”. Cord cutting is the opting out of cable companies and choosing to consume media digitally through devices like cell phones, gaming consoles, and computers. For a few years, cable companies assumed that people would eventually come back to cable, because live sports isn’t available, broadcast television isn’t on Netflix. Still people are refusing to fork over the money for cable/satellite. Cord cutting has forced cable companies to adjust the way produce their content (Shade, 2015). Many major media outlets are creating their own subscription-based system. For example, ESPN has created ESPN+, which is for those people who do not have a cable package and for those who have cable but want more content from the Worldwide Leader in Sports. ESPN+ gives people an opportunity search their library to find out-of-market and previously aired sporting events, along with their original content like the 30/30’s and Detail, which is produced by future Hall of Famer, Kobe Bryant.

You can get all of this for the low price of $5.99 a month. ESPN understands where the market is going, and they are doing what they can to remain relevant among millennials. Netflix has changed some aspects of our lives. It changed how we chose to consume media, why we chose the content we chose. The Uses and Gratifications Theory helps us answer those questions of how and why. Netflix changed how content is produced and provided to us. It is important for us to understand how Netflix along with the Uses and Gratifications Theory affects our lives. It is important to ask ourselves, why we consume such content? How does it affect us? It’s not something that warrants change, but it is something that every person should aware of.

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