McGehee 1

Digital Streaming’s Effect on Processing Entertainment

Thesis: With companies like Netflix and Amazon taking over the online entertainment industry,

it is plain to see that the traditional movie watching experience is in the process of becoming

nonexistent.

I. Introduction

II. History of Netflix and Amazon Video.

III. How are Netflix and Amazon taking over on-demand entertainment?

A. How did Netflix and Amazon start digital streaming?

B. How many users do Netflix and Amazon have?

IV. What is the traditional movie watching experience?

A. What is the traditional movie watching experience?

B. How does the use of online entertainment affect the customer differently than going to

movie theatres?

V. How is the traditional movie watching experience becoming nonexistent?

A. What is binge watching?

B. How is binge watching compared to traditional movie watching?

VI. How is this new way of processing entertainment affecting customers?

A. What are the effects of binge watching?

B. How do the effects of binge watching affect customers?

VII. Is binge watching better for the customer than traditional moviegoing?

VIII. How can movie theatre businesses combat binge watching and digital streaming?

IX. Conclusion
 McGehee 2

Wesley Kyle McGehee

English IV Honors

Angela Wilson

April 27th, 2018

Digital Streaming’s Effect on Processing Entertainment

Over the past two decades the internet has developed into a more simplistic way to

absorb entertainment. Today, instead of having to go to a movie theatre to watch a new movie,

people can open an app on their phone and have instant entertainment. Whether it be a new

Netflix original like ​Bright​ or a new Amazon Prime original like ​The Big Sick​, customers have

the ability to skip out on a movie theatre experience and watch a film in the comfort of their own

home. Rather than buying a movie ticket and snacks from concessions, they can purchase an

on-demand streaming service online and get a much wider variety of films and an added bonus

of TV shows as well. With companies like Netflix and Amazon taking over the online

entertainment industry, it is plain to see that the traditional movie watching experience is in the

process of becoming nonexistent.

In 1991, Tim Berners-Lee, a computer scientist and engineer from Switzerland, released

an invention to the public that would eventually become the gateway for the decline of public

movie viewing; the World Wide Web. Berners-Lee and his partner Robert Cailliau, refrained

from being too specific about the World Wide Web’s potential uses in their proposal for the

invention to the European Organization for Nuclear Research. They did this due to their

recognition of the invention’s capability (Bryant, 4). Six years later, Reed Hastings and Marc
 McGehee 3

Randolph took advantage of this new tool by incorporating it into their business, creating an

online DVD rental service called Netflix. Randolph claims that the two started the company after

deciding they wanted to make the, “Amazon.com of something” (Castillo, 3). Amazon had gone

public two years earlier in 1995, created by Jeff Bezos. Although the company originally only

sold books, Bezos is said to have had a vision of what the company would become; an

e-commerce powerhouse and, “an everything store” (Hartmans, 1 & 2). What Randolph did not

fathom was that within the next decade and half Amazon would become one of Netflix’s biggest

competitors.

Today, Netflix is known mainly for its streaming services and original content. However,

its streaming services did not start until 2007, and there was no original content until ​House of

Cards​ debuted in 2013 (BBC Newsbeat, 5 & 11). Jeff Bezos threw Amazon into the

online-streaming service arena when he launched the Prime Instant Video service in February of

2011. This service gave Amazon Prime members instant access to over five thousand movies

and tv shows, much of the like resembling Netflix’s collection (Stevens, 1). Then, two years

later, Amazon announced their first original series as well; ​Alpha House ​(Spangler, 5). As of

2018, Netflix has one hundred and eighteen million users globally and Amazon is projected to

have one hundred and twenty-two million users globally by 2022 (Molla, 1 & Columbus, 3).

With a combined projected number of almost a quarter of a billion users worldwide, Amazon and

Netflix are very clearly two main dominators in the online entertainment business.

When informed about both services’ amount of users, one can only wonder how this

affects the movie theatre business, as well as how it has affected the moviegoing experience. But

what exactly is the traditional moviegoing experience? After purchasing a ticket for one viewing
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of a certain movie, the customer then has the choice to buy a variety of snacks from concessions.

In some movie theatres however, in an effort to adapt for the customers’ convenience, a server

will discreetly take a customer’s order while they are already seated in the auditorium. Now,

instead of having to decide when to visit concessions during an interesting movie, the customer

can press a button and the server will arrive shortly and take the customers order, then delivering

the order once the food is ready (Chandler, 2). If the movie theatre is to have this service, such as

the South Lamar Alamo Drafthouse in Austin, TX, they will have a menu of made-from-scratch

food ranging from salads to sandwiches to even pizzas, as well as the traditional snacks such as

popcorn and candy (Cinema, South Lamar). After food service, the customer then has to watch

the movie, most of the time in one sitting in order not to miss any part of the film. Online

entertainment, on the other hand, wipes out most of the problems brought up with traditional

moviegoing. Firstly, it eliminates the process of driving out to a movie theatre at a specific point

in time. Next, after buying the online service or movie, the customer has the option to watch a

film as many times as they choose, not just once. The customer supplies themselves with their

own food, eliminating worry of getting food on time or having to leave to get food during the

movie. Lastly, the customer has the ability to pause the movie if they need to, whether it be to

take a bathroom break or answer a phone call. The ability to take these liberties is clearly one of

the main components in the competition between online entertainment viewing and traditional

moviegoing.

One other main component in the competition between online entertainment

viewing and traditional moviegoing is a process known as binge watching. Though this process

has been around since the age of DVDs and TV movie marathons, the phrase, “binge watching”
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was made widely popular by Netflix. As previously stated Netflix launched its digital streaming

service in 2007, originally focusing on films but eventually shifting more towards television

shows (McAlone, 4). This happened for two reasons; the first being Netflix found that movie

distribution was ill suited for digital streaming and the second being that the company saw an

untaken opportunity in the value of reruns of television shows (McAlone, 2 & 5). Netflix was not

able to acquire movies until a year after they debuted in theatres and even after acquiring the

movies they only showed them from twelve to eighteen months before the movies went to, “free

tv” (McAlone, 3). Taking this into consideration, Netflix then focused more on TV shows, both

narrative dramas like ​Mad Men,​ and short, “self-contained” shows, such as ​Friends ​and ​Seinfeld

(McAlone, 4). Being able to watch these programs on demand with no limit as to how many

episodes could be played created the cultural wave of binge watching amongst Netflix

consumers (McAlone, 5). After Netflix pioneered the popularity of binge watching in 2013, more

and more companies followed suit, creating a bigger demand for on-demand streaming of

entertainment. Amazon was one of these companies, unveiling their on-demand streaming

service Amazon Video in 2011. With Netflix and Amazon Video’s combined amount of users

having the ability to binge watch programs, over two hundred million, the way these users

process entertainment has completely changed.

Being able to watch movies and TV shows back to back with no wait for a small fee is

pretty enticing. Although binge watching makes the users of these digital streaming services

happy, it can have negative outcomes for the users’ health. This especially applies for those who

get too wrapped up in binge watching and stay up too late, giving themselves sleep deprivation.

A study published by the Journal of Clinical Sleep Medicine examined four hundred and
 McGehee 6

twenty-three young adults, eighty percent self-labeled as binge watchers, reported that binge

watching could lead to sleep deprivation. Together, all of the young adults averaged to binge

watch three hours and eight minutes of content every day (Clay, 3). Sleep deprivation can lead to

very serious health problems, such as obesity, diabetes, high blood pressure and even heart

disease (National Health Society, 14). Chronic sleep deprivation can also lead to long-term mood

disorders such as anxiety and depression (National Health Society, 19). Sleep deprivation is not

the only thing that can be caused by binge watching, however. Users who partake in the process

have the possibility of becoming addicted to binge watching, such as choosing to watch another

movie or episode over important responsibilities (Stone, 3). Binge watching also tends to be an

antisocial activity, according to a study made by Marketcast, an entertainment research firm

(Stone, 4). This study showed that ninety-eight percent of the binge watchers they interviewed

preferred to watch programs at home, and fifty-six percent preferred to watch programs by

themselves. ​Digital streaming may be more convenient for a customer, but it is clearly not

beneficial towards the customer’s health.

Binge watching and on-demand digital streaming are entertainment processing

powerhouses. When put up against the traditional moviegoing experience, it is easy to see that

on-demand streaming is a strong competitor. But is binge watching better for the consumer than

the traditional moviegoing experience? Although people love binge watching on-demand

programs, being inactive for long periods of time can lead to serious problems with the

consumers health. Sitting for long periods of time increases the risk of heart disease, diabetes,

and even cancer (Stone, 2). The best way for binge watchers to combat this is to take stretch

breaks in between programs, even something as small as standing up every once in a while could
 McGehee 7

help binge watchers tremendously. Binge watching has also become somewhat of an addiction.

Netflix surveyed over sixty thousand users on their streaming habits from November 1st, 2016 to

November 1st, 2017. What they found was that the sixty thousand approximate surveyees

collectively watched one hundred and forty million hours of content per day, adding up to over a

billion hours of content watched per week (Pearson, 3). With traditional moviegoing on the

other hand, the customer has to be more active in order to view programs. Even something as

little as taking trips to concessions at a movie theatre could give someone more exercise than

binge watching.

Companies such as Netflix and Amazon Video gain more and more users every day.

With more people switching to on-demand streaming, movie theatres are becoming less and less

visited. So how do movie theatres compete with on-demand streaming? As previously

mentioned, some movie theatres offer meals as a way to gain to more customers. Some movie

theaters also offer customers a full selection of alcoholic beverages, which is served before the

showing starts (Investopedia, 4). Another adaptation for movie theatres has been updated seating,

switching from traditional style theatre seats to recliners and sofas. The updated seating also

gives customers the ability to choose their seating ahead of time (Investopedia, 4). Some are

trying to get rid of the moviegoing experience as a whole, bringing new releases to the

customers’ homes. Movie studios are pushing for this to happen, offering in-house showings for

an extra fee before the standard ninety day waiting period after the movie premieres (Kafka, 4).

Netflix is also pushing this process forward by creating a straight-to-streaming library of movies.

With both Netflix pushing the industry this way, whether the industry prefers it or not, and the

move to make in-house premieres common, this could cost theatre owners potentially $3.6
 McGehee 8

billion dollars in revenue (Kafka, 5-6). Netflix and on-demand digital streaming could very well

be the end of movie theatres.

Movie theatres have been an essential part of american society since their creation. They

provide quick and simple ways to watch films and are a place to share many great memories.

Whether it be a family experiencing their children’s first movie, or two high school sweethearts

on a date to watch the newest comedy, people always have come to movie theatres in search for

affordable entertainment and enjoyment. However, with companies such as Netflix and Amazon

Video becoming big competitors of movie theatres, their existence may no longer be guaranteed.

Taking out the hassle of driving to a movie theatre to watch the new premiere and watching it in

the comfort of one’s own home instead is the final nail in the coffin for movie theatres. Binge

watching has potential customers for movie theatres glued to their couches. It has also put more

and more people at risk for life threatening diseases, such as cancer and heart disease. Although

binge watching has made customers happier, it has formed into somewhat of an addiction among

the users of the digital streaming services. Though theatres have adapted by updating seats and

widening the variety of food sold, it seems as if they are fighting a lost cause. If there is no

reason to attend a movie theatre, then people simply will not attend. Though it is possible that

movie theatres will survive as digital streaming continues to advance, they definitely will never

be at the level of popularity and enjoyment as they once were. What is most interesting is how

digital streaming will affect its users in the future. Is it actually possible that cutting down on

binge watching could help lower major health risks? Though the research points to binge

watching causing health problems, in all reality someone watching another hour or two of their
 McGehee 9

favorite TV show will not die from a heart attack. But it is not such a bad idea to get up and

move around every once in a while.

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