Netflix, Hulu Will Never Beat Television, Social Media Is Reason

Netflix and Hulu, the two premier online streaming companies in operation today, have enjoyed phenomenal growth to date. Combined, Netflix and Hulu account for just over 38 million unique visitors per month.

Five years ago, it would have been unthinkable that an online-only entertainment production would capture enough eyeballs to overtake its television counterpart. But last year, Netflix totally destroyed that perception with the release of House Of Cards.

The remake of the BBC Masterpiece Theater classic was seen by two percent of Netflix 33 million subscribers, or about 670,000 people, within the first two weeks of the release of Season Two. While it’s hard to obtain sound data on House Of Cards performance, that number, combined with the many awards the program has gained, have caused talk that online programming can replace television.

I think (and I say this as one who benefits from a shift to online video consumption, as I’m a YouTube Partner, and have been since 2008) is a massive reach. There are two reasons why that will not happen: the reach of television, and social media.

Let’s take Scandal as an example. The popular ABC Television Series based on the work of fictional Washington crisis pr strategist Olivia Pope, drew in a staggering 10.52 million viewers for its Season Three debut on October 3rd, 2013. That’s one third of Netflix’ entire subscriber base and all in one night.

Those numbers include viewers enjoying what’s come to be called the “second screen” experience. That’s where we use our tablet or smartphone to comment on what we see on the first screen, which is television.

The fact that Scandal is “appointment” television that’s free to watch leads to a kind of water cooler effect when combined with social media. We don’t just watch, we tweet on and type comments about what we see as it happens.

In the case of Scandal, a racy love scene between two characters Huck and Quinn, played by Gulierrmo Diaz and Katie Lowes respectively, became the focus of thousands of tweets – so many that “Huck and Quinn” became a Twitter Trend term.

It’s improbable (though not impossible) for Netflix and Hulu to match that kind of social media reaction. It’s not the numbers, but the fact that a person can elect to watch House Of Cards anytime they want after the download becomes available – there’s no “appointment” attached to the distribution schedule for the show online. That causes a disintegration of the audience, making it far less likely that anything more than a large volume of tweets and comments announcing that House Of Cards is being watched will happen.

So, the famous love scene in House Of Cards Season Two that featured Doug Stamper (played by Michael Kelley) and Tammy (played by Tanis Parenteau) would not get the same social media reaction as the Huck and Quinn lovemaking because its not on television.

You see, even if the scene were to pop up on Twitter, a person would have to be a Netflix subscriber to have seen it. By contrast, a Twitter user seeing the Huck and Quinn tweets has only to turn to ABC television to watch it.

The best strategy for Netflix or Hulu, and an entry point for YouTube, is to partner with YouTube, so that someone could just click over and watch the “appointment” oriented presentation of House Of Cards Seasons Three.

Let’s see if that happens.

On the other hand, it also points to the need for regular television networks to have better cross-platform distribution plans. At present, online presentation is treated as a second-class way of viewing, and that leads to second-class gains. (I’ll explain in more detail in the near future.)

Stay tuned.