- Netflix has added the ability to download selected titles for offline viewing on smartphones and tablets
- Laptops and other browser based streaming devices are currently not included in the roll-out
- All users can utilise offline viewing regardless of country or subscription tier
- Supported content includes much of Netflix’s original content library, alongside a reduced selection of third party content and films.
Rights agreements may need to adapt
Netflix’s download option grants users in all Netflix territories the ability to download selected content. Importantly this includes locations with large established user bases such as the USA, UK and Nordic markets. Popular Netflix branded titles such as ‘Orange is the new Black’, ‘Narcos’ and ‘The Crown’ are available to download depending on country specific content rights. The limited third-party catalogue points to further negotiations needed with studios. As offline access becomes more common among streaming services in general, IHS expects that content deals bundling these options will become the standard.
2016 has seen a number of companies launch and market offline functionality. Services including ‘Amazon Prime Video’, DirectTV (in the US) and BBC’s ‘iPlayer’ (free in the UK) compete for viewer’s time in internet blackspots such as air travel and commuting. Traditional Pay TV operators are also increasingly competitive in terms of streamed content, with TV Everywhere (TVE) services becoming more feature-rich and reliable. Services like Sky Go allow offline viewing for subscribed content libraries while other pay TV operators such as Virgin are planning to follow suit.
Studios and major Indies will no doubt be carefully monitoring the impact that offline viewing modes will have on the transactional market. However transactional windows tend to be driven by new release movies, which feature little on these types of services. While there may be an element of substitution, it is likely that the mainstay will be unaffected and, where replacement is made, compensated for by adjusted rights deals.
Providing offline support has additional benefits for Netflix
The addition of download functionality will not only improve the quality of service in areas with limited internet connectivity, but it can also incentivize users to adopt higher tier packages. Downloading to view ‘on the go’ guarantees video quality, meaning that users on the HD and above tiers can always view this content in the maximum available quality by downloading content to their chosen device. This may also have the advantage of reducing server demands during peak viewing hours.
Offline viewing is not just for emerging markets
Netflix initially hinted that it was investigating the option to support offline viewing only in emerging markets. This was around the same time as its global roll out in early 2016 whereby Netflix was looking to address those users with more limited internet connectivity. The quality of the internet connectivity, particularly on mobile, is however not just an issue for emerging markets and Netflix is right to address this issue globally. Smartphone ownership is now ubiquitous in many countries, but the mobile internet experience can still be patchy with multiple factors impacting the quality of experience – particularly for users on the move. The ability to access Netflix content in situations without internet access such as on flights will also likely be welcomed by users in mature markets as much as elsewhere.
Mobile devices require OS versions to runat least iOS 8.0 on Apple products and version 4.4.2 on Android devices. The omission of PCs and Laptops is likely for security concerns, but these devices are less often used for viewing content on the go. Security on mobile devices is generally easier to manage preventing content from being ‘ripped’ from the app into a separate file. Access by modified versions of the native OS can also be managed in app by Netflix.
Launch is typical of Netflix strategy
Netflix’s CEO Reed Hasting first hinted at the service adding offline earlier in 2016, after which it was clear that the company was exploring its strategic options surrounding this feature. In November 2016, the company issued additional guidance that international markets with unacceptably slow internet speeds would be the focus of any such rollout. Netflix’s decision to include all markets is typical of the company’s entrepreneurial spirit where, as with the prototype Roku technology, old ideas are discarded as soon as they no longer fit the ideal solution. With Netflix now available almost globally, offering the same features to all users makes its proposition more consistent and also ties well with Netflix’s strategy of making global content rights deals.
Subscription service offline viewing is still in its infancy
The addition of download capabilities is new to streaming services, but has similarities with features implemented in a number of similar business models. Pay TV platforms deployed VoD solutions while the cost of data transmission was still prohibitive and reduced expenditure by predicting which content would be popular and preloading this to users’ set top boxes.
In the same way, Netflix could optimise its network capacity and improve the user experience by scheduling downloads to occur overnight. Netflix can also work to reduce demands on users’ mobile network and data limits by initiating downloads when a user is in a fixed location with consistent WiFi access. Finally, Netflix could use its comprehensive user viewing preference databases to predict on an individual level which content a user may wish to download, or regularly watches at that time. This would be especially useful for time-poor commuters; such a feature would tie in users with an added factor of convenience.