How Will Netflix Change the Way DTH Business Works?

How the direct-to-home business model is changing

It's no secret that the direct-to-home business model is changing. We live in a world where consumers want things instantly delivered. Companies that inconvenience them or require them to wait are seeing severe dips in sales. Just think about the way people watch television now. Streaming television shows, rather than watching cable, has become the new norm. Netflix is having a huge impact on the direct-to-home business world, and here's how.

Netflix Customers in the Millions

Netflix is one of the fastest-growing streaming companies in America. While they had an existing customer base of over 23-million when they were only delivering DVDs in 2007, they became a billion-dollar company when they started offering digital content. Even though their business model changed, they didn't see a major spike in subscribers until 2013, when it reported 33-million subscribers. Over the next three years, that number grew to 74-million according to Wikipedia.

This data, however, doesn't mean that cable television is completely obsolete. About 80-percent of American households still have television service. While this number is slightly down, it isn't as big of a deal as most people think.

Netflix is not a unique service, but it is the clear leader in the streaming industry. It was the first to introduce original movies and television series to its lineup. It is also one of the longest running streaming companies. Because of its history in shaping the entertainment industry, people often don't think about grouping its biggest competitors, Hulu and Youtube, in the same category as Netflix, even though they have the same features.

The Cost of Netflix

Most cable companies charge a lot more than Netflix does. This is usually due to the additional steps involved with delivery. For example, a person still has to visit the home to install the service and equipment is needed to maintain the service. Cable is also advertised as a premium service, whereas Netflix is advertised as a cheap alternative to television.

Cable providers can't simply lower their prices, at least not to the amount that Netflix is charging. That means they have to appeal to an audience that wants more and is willing to pay, rather than the thrifty consumer. For DTH businesses to remain competitive, they need to show consumers they have more to offer. Show them that the value of your product outweighs the cost.

Why Do People Still Have Cable Television?

Netflix and other streaming services are very popular. Rather than sticking with a traditional format, cable services are starting to adapt. These changes allow them to continue to appeal to millennials who don't like waiting for their favorite shows to air. For example, many cable networks are starting to offer exclusive streaming services to people who subscribe to their channel using DirectTV or Comcast. Cable networks are also investing in different media outlets, such as mobile apps.

By offering additional services, such as on demand streaming or apps, modern consumers are more apt to buy. This allows them to keep a steady amount of subscribers, despite directly competing with Netflix. Other DTH businesses are following suit, offering digital features to supplement the ones they already offer.

Demand Changes Over Time

One of the biggest problems people have with DTH businesses is that they don't provide the content people want to see. Most cable companies use old demographics to determine what they will air. This creates a uniform experience. Streaming companies like Netflix create a more custom experience, allowing people to pick and choose shows and movies they like. This makes people feel like Netflix has better overall content, because they only see what they want to see in their feeds.

Keeping Up with Innovation Saves DTH Businesses

Not all DTH businesses can transform themselves into the next Netflix, but there are several things they can do to adapt. Paying close attention to developments in technology can help you stand out from the competition. Pay attention to innovations in your industry and adapt them into your business as soon as possible.

By staying new and fresh, you can adapt your DTH business the same way the cable companies did. Don't let the competitors be the only ones to use the newest tools and resources. Add as much value to your business as possible by using technology to your advantage.

Netflix is changing the way most people think about doing business. If you want to appeal to a crowd that loves on-demand features and hates to wait, you need to adapt your DTH business as soon as possible. Think of innovative features you can include with your services, even if they are digital. Show your business is the most valuable option for the consumer. If you do this, your business can survive against even the toughest, newest competitors.

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