Economics Behind The Netflix Effect

Imagine this, it’s a lazy Sunday evening and you just had a great dinner. Today, you have planned to watch the new Netflix series which you had postponed for quite some time. You also know that Monday is a holiday so, you decide to stay up all night and binge watch the show. By the time you have finished it, you got really curious about certain props that were used in the series and decided to buy some of that on Amazon. Well this is basically the Netflix effect. Ever thought, how does this affect our day to day consumption?

All over the world, Netflix subscribers grow by almost 10% every year. It is true that Netflix has an effect on our daily lives, believe it or not. The binge-watching capability of Netflix might be leading to shorter attention spans. Gone are the days when we would wait a week for new content; we watch whole seasons in a day and finish TV series in a few weeks. Along with smartphones, which are almost always at our disposal, Netflix has created a means for constant entertainment. If we are bored, we need not think for more than a few moments before we open up the laptop and begin a “Netflix marathon”.

If we are bored, we need not think for more than a few moments before we open up the laptop and begin a “Netflix marathon”.

Let’s take the example of The Queen’s Gambit. I am sure most of us reading this has somehow heard or even watched the series. It’s a beautiful fictional story revolving around chess. I personally loved it and in fact I stayed up all night to binge-watching it. But, the interesting thing to notice here is the aftermath of the release of the series. Just after the series was launched there was a huge spike in the demand for Chess sets. At the same time there were spikes in demand for chess books too. There were even spikes in number of registrations in Online chess websites. To put this into numerical perspectives, after the release of The Queen’s Gambit, the demand for Chess sets rose by over 150% and chess books by more than 600%. There was also the increase in registration numbers in the online websites by over 50%. At the same time, we even saw huge increase in the viewership of Chess streamers and YouTube Videos. Experts like Botezlive, GMHikaru, GothamChess and other chess streamers have seen huge rise in viewership in their Twitch and YouTube Channels.

Viswanathan Anand, the former world chess champion and the first grandmaster from India even said, “The potential for chess is huge; the future is what we make of it. I would like to see the younger population participate in the game more and represent India in world championships. The current spurt of interest might be the precursor to the change. Preference for the game has grown by leaps and bounds compared to when I was starting out. Chess is now being considered as a sport and has a huge fan base. The show has had a massive impact; people who have never spoken about chess ask questions now.”

But, there always lies one question which need to be addressed. Is the Netflix effect sustainable? In my opinion, with the current mind-set among the people to move towards online platforms for streaming, it is sustainable. At the same time, Netflix would need to see that this doesn’t become like the normal television shows where advertisements have swarmed in like bees. But, with shows like these streaming, I believe that Netflix will play a huge role in altering our consumption pattern in the near future.