Netflix: More than a House of Cards

The analysis initiated in this post continues on Netflix and the Halo Effect: Retention and conversion, the numbers that count, published on May 20, 2013.

The widely anticipated Netflix original series “House of Cards” was finally released online February 1, 2013. The show, directed by David Fincher and starring Kevin Spacey and Robin Wright, will definitely entice viewers to indulge in serious binge-viewing sessions since all of the first season’s 13 episodes were made available at once to 33 million Netflix subscribers worldwide.

However, finding out how successful this decision was over the next few weeks  might be practically impossible since Netflix is notorious for keeping its ratings under wraps. But I guess it’s okay to go against the grain when you gobble up over a third of evening bandwidth usage in North America, have a 12% penetration rate in Canadian homes in just two years (Netflix says it’s actually double that number, and about 25% in the USA) and your product is available on close to 200 different game consoles and screens. No wonder Netflix causes so many reactions.

Love them or hate them, Netflix has done everything in their power to ensure “House of Cards” is a success. It’s the first fiction series in history to take into account so many different development and distribution variables including platform, content, technology, data, ergonomics and interface, rights and catalogues, market capitalization, infrastructures, mobility, production, competition, business models, corporate culture, integration, traffic, ratings and subscriber loyalty.

The launch of this series has created two distinct schools of thought. On the one hand you have financial analysts who fear that Netflix’s tremendous corporate  and stock growth have led to a “forward escape” that’s disturbing the delicate balance between first-run on-demand series and catch-up streaming packages. And on the other hand you have competitors and industry professionals who see the production of this type of large-scale series for specialized or niche services as the return of a golden age of American TV. But everyone agrees this is definitely a turning point in television history since other OTT providers like Amazon and Hulu, as well as other new players on the European scene (including LOVEFILM in England), are investing more money in producing original content.

So while “traditional” stations promote their big TV events that rely on endless advertising and word of mouth to create audience anticipation, Netflix provides subscribers with a sort of “all you can eat, whenever you want” buffet that’s more in line with their video library origins. So why has Netflix decided to develop original content at this time? It could be due to the increase in cost of existing titles, the competition getting stiffer or the desire to finally get that 10% of subscribers who are enjoying the service’s free trial period to commit to a paid membership. Or maybe it’s a combination of all three.

The “House of Cards” phenomenon is changing the rules of the social TV game. By giving subscribers access to an entire season’s episodes all at once you’re shunning the second screen social TV forums where people usually chat about your show in real time. In the hours and days following the online release of “House” episodes social media enthusiasts posted status updates on how far into the series they were to avoid reading or writing spoilers. Dave Winer, a seasoned blogger who is considered one of today’s most influential web voices, wrote:

“One thing that’s missing from “House of Cards,” that you get from other serial dramas like “Breaking Bad” or “Homeland,” is the ability to discuss it with people online. It’s tough because people are either a few episodes ahead or behind. I don’t want spoilers, and I don’t want to be a spoiler. We need to invent new communication systems, where only people who have made it through Episode X can discuss with others who have made it exactly that far.”

Is Netflix creating a new television experience that will force us to change our current ways? We can’t deny that OTT and binge-viewing are already part of our new audiovisual consumption habits. And now that the bidding war to get OTT rights to smash TV hits has begun, producing original content could be a medium-term solution to staying competitive in this universe.

 

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