‘The heist of the century’ – Technologist

Every mogul in Hollywood and beyond has dreamed of it, but Netflix made it a reality. In less than 15 years, it has transformed a relatively small-scale, national business – television – into one that is both global and extremely profitable. On Thursday, October 17, it announced that its revenue for the third quarter of 2024 approached $10 billion (€9.22 billion), while profits neared $2.4 billion. Not bad for a video rental company founded in 1997 that only got into the TV business in 2007.

With its power and profits, Netflix is now crushing not only its direct competition but also the industry’s traditional players, the TV networks. NBC, CBS, ABC, and their French equivalents TF1, M6, France Télévisions or Canal+, know that they are in mortal peril and that several of them will be swept away by the Netflix wave. This story would make a fine show worthy of House of Cards, its first worldwide hit.

The first episode would focus on the origin of the concept of “delinearization”: Offering programs that can be watched with no fixed schedule. It rests on a fragile subscription-based economic model. Since the key is to build viewer loyalty, what better way to do this than with TV series?

Hectic and costly growth

Hence why it spent a lot of money producing them to attract subscribers. This would be the second episode, about the company’s hectic and costly growth. The stock market is willing to forgive losses as long as the number of subscribers increases. Then comes the third phase, the one about moving upmarket. Shows became more numerous, more expensive and more international. Stories from South Korea, France or Spain can now become global hits.

The fourth episode would introduce a plot twist. Subscriber numbers fall and profits lag. In an unexpected move, the company banned password sharing and raised its prices in 2022. It worked. Then came the coup de grâce. Netflix, which had previously promised not to inconvenience its subscribers with ads, changed its mind and introduced cheaper rates in exchange for mandatory commercials, thereby finding an additional source of revenue and reaching new target audiences.

The final blow came when the company took away old-fashioned TV networks’ last remaining argument – live programming. By the end of the year, Netflix will be airing boxing, wrestling and football games. And that’s just the beginning. Advertising will flood in, further abandoning the sector’s traditional players, who never left their purview. The heist of the century by a total unknown. A surefire hit with the public.