Take a Bow, Netflix: How the streaming service won 2016

2016 has been a damn good year for Netflix, with a number of award winning programmes being launched. We take a look at what has gone well for the streaming service and what is still to come

Let’s have a round of applause for Netflix. In July the streaming service gave us Stranger Things; in August the stylish The Get Down launched; in September we (spoiler alert) briefly caught up with Pablo Escobar in Narcos, and in October Marvel’s Luke Cage made his debut as a series lead in the imaginatively titled Marvel’s Luke Cage. To have one hit show in a year would be good, two is great, but to have four in half a year – and we haven’t even mentioned Black Mirror – is unbelievable.

2016 has undoubtedly been the year that Netflix has achieved supremacy in home entertainment, but the streaming service remains essentially a technology company and it’s this – the ability to analyse vast amounts of data about its customers’ viewing preferences, so it can decide what content to buy and how much to pay for it – that is separating it from traditional television networks. But with each successful launch, it’s hard to argue against the fact that Netflix is becoming more than just a technology company; it’s becoming a media giant.

shutterstock_449665576

Image courtesy of Maxx Satori / Shutterstock.com. Featured image courtesy of Twin Design / Shutterstock.com

Thanks to its new status, Netflix finds itself in the unenviable position of having to compete with companies with much larger resources because being a television network comes at a cost. A massive, eye-watering cost. In a letter to shareholders that detailed Netflix’s results for the third quarter of 2016, the company announced that although quarterly global streaming revenue had exceeded $2bn for the first time, its net income for the same quarter was only £52m and streaming content obligations – the money Netflix pays to license, acquire and produce content – just reached £14.4bn.

Being a technology company, Netflix seems to see innovation as the answer to any problems it has, so in 2017 we’ll see at least another 400 hours of original content – from 600 hours to over 1000 – and rumours suggest that Netflix may introduce downloads by the end of the year. But can Netflix thrive in the new media world it has created? And more importantly, can Netflix continue to hit home runs when it comes to content?

Room to create

Netflix explains that it is able to create award-winning content because of its ability to “support programs for both mass and niche audiences alike”. In a letter to shareholders the company said: “Since we are not shelf-space constrained nor reliant on advertising, we have the luxury to tell all kinds of stories in less traditional ways. The growth of internet TV globally has ushered in a new golden age of content, with consumers everywhere enjoying unprecedented access to amazing amounts of high quality programming.”

Like any good technology company, Netflix monitors streams of data to predict what shows will work and what won’t. But it isn’t all about data. Netflix, unburdened by genre, advertising revenues or ratings, can pretty much commission what it wants.

“The worst thing you can do at Netflix is say that you showed it to 12 people in a focus room and they loved it,” said Todd Yellin, the company’s vice president of product innovation, in an interview with the New York Times.

Marvel's Luke Cage. Source: Netflix

Marvel’s Luke Cage. Image courtesy of Netflix

Netflix doesn’t have adverts, so it doesn’t need to aggregate viewers for advertisers, care about ratings or make programmes that are written, shot and edited to accommodate commercial breaks. All of this means Netflix can afford to be bolder with its content. There aren’t too many media companies who will give a home to foreign language television programmes (Narcos) or programmes that have female or black leads (Jessica Jones, Luke Cage), but Netflix does.

There also aren’t too many television networks who give creatives the amount of freedom Netflix does. What started as a way to beat HBO to House of Cards has become Netflix’s standard practice, so shows no longer need a pilot and can be commissioned for multiple series without having to worry about ratings.

“Netflix are daring and try to tell stories that would never be aired on linear TV,” a spokesperson for Netflix told Factor.

Netflix eyes China

As Netflix attempts to get a foothold in new territories, like China, we’ll see more shows that cater to different nationalities and cultures. Netflix CEO Reed Hastings said at the DealBook conference in New York that the company is “hopeful that we’ll over time make a great Bollywood show, make a great anime show”.

The company is already experimenting with this. Narcos is produced in Bogota, Columbia, features Brazilian actors and is directed by a Brazilian, but most importantly is delivered in English and Spanish, which allows Netflix to target its Spanish-speaking audience.

50%, and growing, of nearly 1.4 billion people is the equivalent of hitting oil to Netflix

But it’s China that the company is really targeting because, as subscriber numbers plateau in Netflix’s established markets, China represents an untapped well. In a dollar bills appearing in Reed Hastings eyes and the sound of tills opening kind of way.

If Netflix wants to continue to spend lavishly on its own programming as well as secure licences for shows like Star Trek: Discovery and The People vs. O.J. Simpson: American Crime Story then it needs the increased revenue breaking the Chinese market would present. There’s a reason everyone from Disney to Apple wants to get into China: internet usage in China currently stands at 50% of the population, according to the World Bank. 50%, and growing, of nearly 1.4 billion people is the equivalent of hitting oil to Netflix.

“The regulatory environment for foreign digital content services in China has become challenging,” reads Netflix’s statement to investors on the subject of China. For the minute Netflix is attempting to solve its China problem by licensing content to existing online service providers, rather than operating its own service in the country, but the modest income this will accrue is nothing compared to the potential earnings that would come with getting Netflix into the country itself.

The Pill

In Bill Hicks’ Revelations stand-up performance he ruminates on how the stunts in Terminator 2 are ever going to be topped. Netflix may be in a similar position now because it’s hard to come out with hit after hit after hit. Hicks suggested using terminally ill people as stuntmen; this isn’t an avenue Netflix is expected to go down, but the company has some, only-slightly less, outlandish plans.

Speaking at The Wall Street Journal’s WSJD event, Hastings said that in the long term “movies and TV shows will be like opera and the novel…There will be substitutes”. One possible substitute mentioned by Hastings could be “pharmacological” meaning Netflix is possibly considering an entertainment drug that viewers could use to put themselves in the midst of a story.

factor-archive-30To be honest, the idea sounds like something borrowed from Bill Hicks, but it is indicative of what makes Netflix great. It’s a company that isn’t planning on letting its product become obsolete, and even though it becoming a television network, Netflix will never forget that at heart it is an innovative technology company. So while there probably aren’t any chemists working on Netflix’s pills yet, don’t expect the company to be satisfied with just producing hit television in the years to come.

School will use facial analysis to identify students who are dozing off

In September the ESG business school in Paris will begin using artificial intelligence and facial analysis to determine whether students are paying attention in class. The school says the technology will be used to improve performance of students and professors.

Source: The Verge

Company offers free training for coal miners to become wind farmers

A Chinese wind-turbine maker wants American workers to retrain and become wind farmers. The training program was announced at an energy conference in Wyoming, where the American arm of Goldwind, a Chinese wind-turbine manufacturer is located.

Source: Quartz

Google AI defeats human Go champion

Google's DeepMind AI AlphaGo has defeated the world's number one Go player Ke Jie. AlphaGo secured the victory after winning the second game in a three-part match. DeepMind founder Demis Hassabis said Ke Jie "pushed AlphaGo right to the limit".

Source: BBC

Vegan burgers that taste like real meat to hit Safeway stores

Beyond Meat, which promises its plant-based burgers bleed and sizzle like real ground beef and is backed by investors like Bill Gates, will begin distributing its plant-based burgers in more than 280 Safeway stores in California, Hawaii and Nevada.

Source: Bloomberg

The brain starts to eat itself after chronic sleep deprivation

Brain cells that destroy and digest worn-out cells and debris go into overdrive in mice that are chronically sleep-deprived. The discovery could explain why a chronic lack of sleep puts people at risk of neurological disorders like Alzheimer’s disease.

Source: New Scientist

"We can still act and it won’t be too late," says Obama

Former US President Barack Obama has written an op-ed piece in the Guardian giving his views on some of the greatest challenges facing the world – food and climate change – and what we can do about them. "We can still act and it won’t be too late," writes Obama.

Source: The Guardian

Juno mission: Jupiter’s magnetic field is even weirder than expected

It has long been known that Jupiter has the most intense magnetic field in the solar system, but the first round of results from NASA’s Juno mission has revealed that it is far stronger and more misshapen than scientists predicted.

Announcing the findings of the spacecraft’s first data-collection pass, which saw Juno fly within 2,600 miles (4,200km) of Jupiter on 27th August 2016, NASA mission scientists revealed that the planet far surpassed the expectations of models.

Measuring Jupiter’s magnetosphere using Juno’s magnetometer investigation (MAG) tool, they found that the planet’s magnetic field is even stronger than models predicted, at 7.766 Gaus: 10 times stronger than the strongest fields on Earth.

Furthermore, it is far more irregular in shape, prompting a re-think about how it could be generated.

“Juno is giving us a view of the magnetic field close to Jupiter that we’ve never had before,” said Jack Connerney, Juno deputy principal investigator and magnetic field investigation lead at NASA’s Goddard Space Flight Center in Greenbelt, Maryland.

“Already we see that the magnetic field looks lumpy: it is stronger in some places and weaker in others.

An enhanced colour view of Jupiter’s south pole. Image courtesy of NASA/JPL-Caltech/SwRI/MSSS/Gabriel Fiset. Featured image courtesy of NASA/SWRI/MSSS/Gerald Eichstädt/Seán Doran

At present, scientists cannot say for certain why or how Jupiter’s magnetic field is so peculiar, but they do already have a theory: that the field is not generated from the planet’s core, but in a layer closer to its surface.

“This uneven distribution suggests that the field might be generated by dynamo action closer to the surface, above the layer of metallic hydrogen,” said Connerney.

However, with many more flybys planned, the scientists will considerable opportunities to learn more about this phenomenon, and more accurately pinpoint the bizarre magnetic field’s cause.

“Every flyby we execute gets us closer to determining where and how Jupiter’s dynamo works,” added Connerney.

With each flyby, which occurs every 53 days, the scientists are treated to a 6MB haul of newly collected information, which takes around 1.5 days to transfer back to Earth.

“Every 53 days, we go screaming by Jupiter, get doused by a fire hose of Jovian science, and there is always something new,” said Scott Bolton, Juno principal investigator from the Southwest Research Institute in San Antonio.

A newly released image of Jupiter’s stormy south pole. Image courtesy of NASA/JPL-Caltech/SwRI/MSSS/Betsy Asher Hall/Gervasio Robles

An unexpected magnetic field was not the only surprise from the first data haul. The mission also provided a first-look at Jupiter’s poles, which are unexpectedly covered in swirling, densely clustered storms the size of Earth.

“We’re puzzled as to how they could be formed, how stable the configuration is, and why Jupiter’s north pole doesn’t look like the south pole,” said Bolton. “We’re questioning whether this is a dynamic system, and are we seeing just one stage, and over the next year, we’re going to watch it disappear, or is this a stable configuration and these storms are circulating around one another?”

Juno’s Microwave Radiometer (MWR) also threw up some surprises, with some of the planet’s belts appearing to penetrate down to its surface, while others seem to evolve into other structures. It’s a curious phenomenon, and one which the scientists hope to better explore on future flybys.

“On our next flyby on July 11, we will fly directly over one of the most iconic features in the entire solar system – one that every school kid knows – Jupiter’s Great Red Spot,” said Bolton.

“If anybody is going to get to the bottom of what is going on below those mammoth swirling crimson cloud tops, it’s Juno and her cloud-piercing science instruments.”