CES 2016: Netflix Goes Hollywood

CES 2016: Netflix Goes Hollywood

By Francis J. Gorman

When you arrive at CES 2016, you notice the lines and the crowds, even though attendance was capped this year at 176,000 to stem the growing number of attendees. You also notice that the owner and producer of the show has changed its name, from Consumer Electronics Association to Consumer Technology Association.

The CTA, which began in 1924 as the Radio Manufacturers Association, changed its name to better reflect the more diverse nature of its members. Netflix and Uber, for example, are members of CTA, but not manufacturers of traditional consumer electronic hardware. The new name also accurately reflects CTA’s mission of supporting and broadly advocating for technology innovation.

CES 2016 shows increasing exhibitor diversity – beauty products, video streaming services, original video content producers, and automobile manufacturers to list a few. By exhibit-floor space, the automobile industry has become one of the largest exhibitor groups at CES. The number of automobile manufacturers at CES has steadily increased: this year, nine of the top ten automobile manufacturers are exhibitors. The industry has embraced consumer electronics and technology as it develops vehicles connected to smartphones and smart homes, electric vehicles, and driverless cars that that could reduce traffic fatalities. In short, the automobile joins TVs, computers, smartphones, and audio as a major market causing consumer technology innovations.

Keynote addresses are also demonstrating this increased diversity. On Tuesday night, before the official opening, Dr. Herbert Diess, CEO of Volkswagen Passenger Cars, presented a wide range of vehicle technology innovations, focusing on the connectedness and sustainability of the BUDD-E vehicle. It has Internet connectivity to the smart home, responds to swipe and gesture controls (the door with a wave of the hand, for example) and has an electric battery that lasts 230 miles on just one charge.

On Wednesday morning, Gary Shapiro, CTA’s president, and Netflix CEO Reed Hastings gave back-to- back keynotes. Shapiro emphasized the benefits to everyone that new technologies bring, citing health and medicine (remote medical diagnosis using smartphones), manufacturing (astronauts on the International Space Station making a replacement socket wrench with a 3D printer) and distribution (drones making deliveries in remote areas and rooftop deliveries in urban areas).

But it was Hastings’ presentation that really excited the audience. He recalled how Netflix began in 1997 with a few people and offered a monthly, flat-fee subscription service mailing DVDs to customers with no return date. When streaming video technology arrived, Netflix latched on, but it took 10 years for the Internet to become sufficiently robust to support reliable streaming of video to an internet-connected device. Netflix’s key marketing principle is entertainment on demand, not on a schedule dictated to viewers by broadcasters.

Today, Netflix is establishing a global TV network. Hastings announced that during his address the streaming service went live in Singapore, Poland, Turkey and many other locales, bringing the total number of countries with Netflix to 130. Netflix is also a powerful producer and distributor of original video content, series, documentaries, and films. He took credit for “binge viewing” by releasing at one time all episodes of Netflix’s series.

The consequences of Netflix’s disruptive innovations includes financial resources and expansion. Netflix can now gather the best producing, directing and acting talent in projects to create and produce original video. Ted Sarandos, the company’s chief content officer, presented the array of Netflix productions released and in the works. Sarandos then hosted a conversation on stage with comedian-producer Chelsea Handler (“Chelsea Does”) and actors Will Arnett (“BoJack Horseman“), Krysten Ritter (“Jessica Jones“), and Wagner Moura (“Narcos“). It was like a Hollywood studio promotional rollout, and the executives at Disney, Time Warner, MGM, and Universal better be taking notice.

This first appeared as a guest article on January 7, 2016, in Danny Jacob’s blog in The Daily Record.