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Game consoles built streaming — until it outgrew them

Also: YouTube is an SVOD giant

Hi there! My name is Janko Roettgers, and this is Lowpass. This week: Netflix and the PS3 go way back, and YouTube’s subscription business now rivals Disney’s.

It’s the end of an era as Netflix says good-bye to the PS3

It’s been a rough couple of days for gamers who also love to binge their favorite TV shows with their consoles: At the beginning of the week, Netflix began informing PlayStation 3 owners with an onscreen message that it would discontinue support for its PS3 app after March 2nd. And today, Hulu is pulling the plug on its app for Nintendo’s original Switch.

Netflix’s decision to discontinue its PS3 app, which was first spotted by multiple Reddit users, is particularly noteworthy: The console used to be at the forefront of Netflix’s living room tech efforts, only to eventually be outflanked by the growing popularity of more modern and capable smart TVs and streaming devices.

Netflix first launched an app for Sony’s PlayStation 3 in late 2009, with a twist: Instead of shipping a downloadable app for the device, the company initially distributed discs with its app to its members.

Netflix eventually began distributing its app through the PlayStation Store, and quickly became a hit. By 2012, the PS3 was the most popular streaming device among its customer base. “PS3 is our largest TV-connected platform in terms of Netflix viewing, and this year, at times, even surpassed the PC in hours of Netflix enjoyment to become our number one platform overall,” said then-CEO Reed Hastings at the time.

But the game console wasn’t just a boon for Netflix’s streaming hours. It also quickly became a key part of Netflix’s app development strategy. On other platforms, Netflix had to ship a new app version every time it changed anything about the app’s features or design. The PlayStation app, on the other hand, was based on HTML5, which allowed Netflix to swap out individual components and test features and design choices with subsets of its audience on the fly. This quickly turned the PS3 into a cornerstone of Netflix’s A/B-testing strategy.

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