Netflix has undergone such rapid growth that its brand has become a household name, synonymous with video streaming and with 109 million worldwide subscribers. Its success proves that film and TV may still survive in the digital age. But will its power within the industry potentially harm filmmakers by dampening creativity and narrowing the range of produced content.

Ashley Turing is the founder and CEO of LiveTree ADEPT, a London-based socially-conscious film and TV crowdfunding firm. Using a unique platform and its own cryptocurrency – LiveTree Seed (SED), Turing and his team believe that they can put power back into the hands of consumers and creative film-makers. But why is the industry in need of a revolution?

“Netflix is on virtually every device with a screen. It’s become a powerful force in modern culture. From an end-user perspective, Netflix provides a great service. But there’s a darker side to the Netflix phenomenon, namely its practice of using your data to maximise its profits,” says Turing.

“Next time you switch on Netflix, check out your ‘personalised content’ feed. This is compiled via algorithms similar to those used by Facebook’s newsfeed. It works like this: Netflix gathers data from its users’ viewing habits, which it then uses to rate everybody and everything involved in a production — actors, directors, set designers, even romance levels, plot conclusiveness and the ‘moral status’ of characters — to judge whether a piece of content is worthy of transmission. This user-data-based scoring system has a single objective: to maximise Netflix’s profits.”

“I personally find this annoying — I seldom want to watch what Netflix has decided I should watch — but, more importantly, it’s dangerous. It’s dangerous for creativity. It’s dangerous for consumers. And we need to rethink it,” he adds.

Netflix is a centralised operation, which explains why it is the way it is, says Turing. “In other words, the power resides in the top execs and it is answerable only to its shareholders, not to its users or the creatives who produce its product. In essence, it takes your data and controls it within a non-transparent structure.”

“The unstoppable growth of the centralised online giants — and I’m not just talking about Netflix here, but also YouTube, Amazon and Apple — is creating an entertainment marketplace dominated by content whose sole function is to make money. Brave, thought-provoking, game-changing content that adds to society’s creative and cultural stock isn’t part of their remit. I find that scary.”

For Turing, the fact that Netflix doesn’t share the data it uses to drive the algorithms that determine what content it shows to its subscribers is a problem. Even the people who create its content aren’t allowed to see the data. “This is bad news for consumers, because it limits choice and will ultimately result in a world of cookie-cutter content. And it’s bad news for content-makers, because creativity and originality will be sacrificed on the altar of profit.”

Digital rights management

“Unfortunately, the bad news doesn’t stop there. Digital rights management (DRM) is shaping up to be the next battlefield,” Turing warns. Netflix’s DRM policy is to license content in perpetuity. This means that content-makers cannot realise the true value from their IP from any other channel, which in turn means that their IP’s long-term value is irretrievably lost. “Again, this is disturbing, not least for the distributors whose job is to navigate the increasingly murky waters of DRM to realise the best price for content. Distributors are also beginning to be cut out of the deal.”

What’s the alternative?

If just one month of Netflix’s revenue were invested into LiveTree’s new digital token, Seed, it would be enough to reinvent the entertainment industry, says Turing. In theory, it would create a new marketplace that’s fairer, more efficient and more transparent. “More importantly, we could create a marketplace that would be sustainable because it would protect and nurture the product — creativity — that drives it, rather than exploiting it for short-term gain,” he says.

“In today’s world, dollars equal power. Netflix is using this power just like the Hollywood studios — themselves centralised ecosystems — to increase their power, profit and control. For example, it is now making lock-in deals directly with Hollywood stars, including Will Smith,” Turing adds. “Netflix also declines to license to cinemas, which means none of its films will ever be seen on the big screen. Ergo more money and control to Netflix; less choice and diversity for consumers and creatives.”

“All this has me worried about the future of creativity. Imagine if Netflix decided to up its subscription fee to $10? Or $15? Or $50? After all, who’s to stop it? That would put a severe dent in not only your entertainment choices, but your entertainment budget.”

“The spectre of creativity governed by profit rather than passion was one of the reasons we at LiveTree ADEPT started to think about what could be done to turn the ship. It’s possible, achievable and, actually, not that difficult.”