Original Content Opens Doors for Netflix

The 65th Annual Primetime Emmy Awards Show was different from all the previous shows.  Of course, nothing seem out of the ordinary. Neil Patrick Harris did a fine job hosting. There was some controversy over the “In Memoriam” video for Corey Monteith, but there wasn’t much controversy elsewhere. The revolutionary difference between this year’s Emmy’s and the Emmy’s of the past are that this year, for the first time, shows released exclusively online were nominated for the awards.  These shows were, of course, release by the industry’s online streaming giant, Netflix.  The question I’d like to ask of Netflix is: “Is it worth it?”

orange is the new blackNetflix has been around since 1997 and has provided online distribution as early as 1999, so it’s kind of surprising that it took until 2013 for Netflix to release its first batch of exclusively original content.  Maybe it was their patience that paid off for them, as their four major releases this year, which cost hundreds of millions of dollars to produce, were heavily praised by critics and literally consumed by Netflix subscribers’ binge watching.

The releases from Netflix include the following titles: House of Cards, Hemlock Grove, Arrested Development, and Orange is the New Black.  All but Orange is the new Black landed an Emmy Nomination, because the release date of Orange did not qualify it for a nomination, it was widely praised by critics landing a 79 score on Metacritic.com, the highest rating of all four shows.  Even with the critical praise and heavy coverage among pop culture media, the amount of viewers who have watched any of these shows is unknown.

Promo video for Netflix Originals and their celebrated Emmy Nominations

No one is sure why Netflix won’t release the viewing numbers, but it appears that Netflix simply doesn’t want anyone to know, though they’d like us to believe the numbers are huge.  Regardless, it doesn’t appear to be hurting the company as their third quarter earnings are up 10%.  So not only is Netflix Original content critically successful, it is proving to be financially successful.   For you skeptics, the addition of original content is, at the very least, correlating with an increase in quarterly earnings.

The issue here is that Netflix needs to worry about whether or not this early success will continue.  Netflix prides itself on accommodating its subscribers by allowing them to binge watch all of their original content.  This can lead to consumers subscribing to Netflix for one month, binge watching Netflix Originals, and then simply leaving the service.  This kind of consumer behavior will not allow Netflix original content to continue to be profitable.

A spokesperson for Netflix commented in a Variety article saying this behavior “would create potential for price swings, given that this is a volatile stock, and accounting for content costs is a hot button issue.”  This suggests that the Netflix “Binge Watch” business model for their original content may not be financially viable, and that they may need to try a different strategy, more along the lines of cable, with its one episode per week approach.

The irony behind this is that Netflix was believed to be the “cable killer,” and yet not only is Netflix talking about mirroring cable’s business strategy, but it is also in talks with Comcast to join as a possible service in a cable package.  In this case, Netflix would be an add-on to the cable service you subscribe to, similar to HBO and Showtime.  I think there is absolutely a demand for this, as Netflix’s 30 million subscribers are still subscribing to cable, making Netflix more of a complement to cable as opposed to a competitor.

If Netflix joins cable, however, it will become known as a just another premium cable channel, handing over all of its potential power to the cable companies.  Personally, I’d find this incredibly disappointing.  Netflix has an opportunity to change the way we view and pay for media content and I’m counting on them to make the right decision.  Do you think Netflix should join cable or try to compete with them?  Post your comments below.

– Mitch Ingstad

6 thoughts on “Original Content Opens Doors for Netflix

  1. I think that if Netflix decided to go in on a deal with a cable company it would make viewing content easier due to not needing another device to stream on. You can pay $8 a month and buy an HDMI and hook up your laptop or Xbox to your TV, or you could just have Netflix’s content always available through your in guide TV menu. (This might be more suitable for older persons.) But I do enjoy Netflix’s original content, Orange is the new Black is one of my favorite things to watch on Netflix. And with their other original content series, I believe they waited until the perfect time to release them!

  2. Original content is definitely a good thing for Netflix. I remember reading an article about Arrested Development when the newest season was released on Netflix as an “original”. The article touched on the idea of this method of content delivery through Netflix as something that could completely revolutionize how we watch TV shows. Arrested Development’s new season was released all at once, rather than the traditional way of releasing new episode weekly during a show’s running season. I wonder if the future of television programming is going to shift in to this trend. I hate having to wait a week to see a new episode of my favorite shows, but I also think it helps add anticipation, excitement, and appreciation for the shows. It’s a love hate relationship, so there very well might not be a true answer to this question.

  3. Personally, I think that Netflix has a good thing going for them and they should not change that. If they are being successful in what they do, which they are, then they should not have to give up the good thing they got going. However, maybe they should consider selling the rights to some of the original content. May to HBO or another company like that, because then they still have an audience for it but they can get a cut of what HBO makes in its subscribers that watch their shows.

  4. I was extremely excited about Netflix Originals when they announced the renewal of the Arrested Development series. I was watching the show at the time so it added to the excitement. I’m more interested in the future of their original programming. I hope that they can acquire some series that might have disappeared off the networks. I just want to see Futurama come back. My favorite show of all time hands down has been cancelled an absurd amount of times even though it kills it in comedy. If not a renewal of the series I hope to see a 4th or 5th movie. The future is bright for Netflix

  5. I would definitely love to see Netflix continue to create original content. However, I’m hoping a rise in quantity will not equal a drop in quality. Right now the original programs like House of Cards, and Orange is the New Black are phenomenal. They are certainly a step up from one of Netflix’s earliest attempts at original programming, Lilyhammer, back in 2011. Though even this show isn’t bad, but merely a starting block to greater things like Cards, and Orange. One thing I would like to see more of that Netflix used to do is produce comedy specials. Zach Galifianakis Live at the Purple Onion was a Netflix produced comedy special that went straight to DVD and Netflix rental. I think that having more exclusively produced comedy specials would bring in great crowds. By the way, Purple Onion is one of Galifianakis’s best works. Not only is it funny, but it gets a behind-the-scenes look at him intermixed in the special, which is so much more insightful and enjoyable from a special. Over-all I believe that original programming is something all Television, and video providers will need to invest in to stay competitive and contemporary. Hulu early-on had a lot of original content. It wasn’t the most popular, but it was a quality entertainment given the budget.

    Another way Netflix can stay on top is by breathing new life into old franchises. Arrested Development is a prime example. Originally a 20th Century Fox title that Netflix acquired, Netflix has brought it back in full force with a whole new season and a movie in the works. Netflix can look into doing this with other franchises that may have ended too soon, not that Netflix has the means and the reputation to produce its own high quality work.

  6. As a compliment to their DVD and online movie streaming service, original content is fantastic for Netflix. However, if they were to try to take it away from the movie streaming service and make it stand alone, they would be in for a rude awakening. I don’t think that it would make enough money on its own to justify severing it from the current movie streaming service. As a compliment, it’s fantastic, but trying to make it stand alone would not work, in my opinion.

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