76% of Netflix Subscribers Think Netflix Can Replace Traditional TV

Netflix is a special company – the type of company that creates its own market space, rather than competing in an existing one. Netflix burst onto the scene in 1998 with a mail-delivery movie rental service that soon buried legacy rivals like Blockbuster and Hollywood Video. In 2007, Netflix began to offer streaming video, essentially inventing the modern subscription streaming service.

Now Netflix is in an interesting spot. Its movie rental triumphs are ancient history, and now Netflix is taking on a slew of new challengers, including other streaming services and pay TV itself.

We've crunched some numbers recently as we've tried to get a sense of how Netflix is navigating these ever more competitive waters. We've found that Netflix is shrinking its U.S. catalog as digital rights become more pricey, but that the company has also brought its international catalogs into balance by increasing their offerings in places like Canada and Great Britain. We've also watched Netflix pour more money into their growing number of original series, and watched as viewer preference followed the money.

But almost as important as where Netflix is going is where its most loyal users think its going. So we turned to our sister site, AllFlicks, to get a sense of how Netflix's user base views Netflix's future. The good people over there put together this survey, which asked 3,000 AllFlicks visitors and Redditors to tell us how they thought Netflix stacked up against other major entertainment business spaces.

Netflix vs. Pay TV

One thing we were really interested in finding out is how Netflix users view the service in relation to the traditional pay TV model (this is a cord cutting site, after all). Netflix's subscriber base includes large numbers of people that still have pay TV, so its not strictly a cord cutting service by any means. And Netflix's CEO has pinpointed other streaming services in general, and HBO in particular, as the company's biggest threat – seemingly downplaying his company's battle with pay TV.

But Netflix's subscribers don't agree. They see pay TV and Netflix as opposed, and (as you might expect), they're betting big on Netflix to win.

It's worth remembering that our survey group was somewhat self-selecting – AllFlicks is a Netflix-focused website, and as a result may draw Netflix's “power users” disproportionately. But this survey was conducted entirely independently of Cordcutting.com, so there wasn't any explicit cord cutting bias in the sample. In the end, the group of Netflix users we surveyed thought Netflix was likely to take down pay TV in much the same way as it once took down Blockbuster and Hollywood Video.

Among those who disagreed, live sports was a rallying cry. “Netflix can't totally replace tv due to live sporting events,” one respondent wrote. “I'll be done with regular cable the day [Netflix] starts streaming live sports,” said another. Other users pointed to news coverage as a reason to retain pay TV.

Netflix Users Think Pay TV Is Doomed, But Will Still Pay for Movies

Our respondents were pretty bearish on the future of pay TV, but they believe that movie theaters will survive the great Netflix revolution. Less than a quarter of respondents were confident that Netflix could replace movie theaters, a far cry from the three quarters who were willing to bet on pay TV's demise.

Just a few years ago, this result would have seemed obvious – Netflix only carried movies that had already run in theaters, so how much damage could they do to Regal Cinemas or AMC? But Netflix's new obsession with original content has led it to compete more directly with theaters. Just look at the big names that now star in straight-to-Netflix originals, or look at Netflix competitors like Amazon buying the rights to films at Sundance.

But there is a big difference between the Netflix experience and the theater experience. In terms of atmosphere, Netflix offers everything pay TV does – that is, nothing but your own living room setting. But, as one respondent put it: “The theater is still magical. Ya know?”

Netflix is certainly competing with theaters more than ever before, but our survey respondents weren't ready to bury theaters just yet. Might this result change in the coming years as the competition becomes increasingly direct? It's certainly something that's worth keeping an eye on.