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Netflix Original Programming: A New Way to Watch (and Create) TV

Early last year, we talked about Netflix’s announcement that it will now be distributing original content through its streaming service. At the time, they were preparing House of Cards, produced by David Fincher and starring Kevin Spacey, as its first foray into original programming. But plans changed, and on February 6 they debuted Lillyhammer, an original series about a mobster informant relocated under witness protection to Norway. All eight episodes of the first season are currently streaming on Netflix.

House of Cards is still in the works, as are at least three other shows: Orange Is the New Black, Hemlock Grove, and new episodes of Arrested Development. In short, this is no one-time deal—Netflix is fully entering the world of content development.

So what, then, does Netflix original programming mean for creators and consumers?

  • No pressure to maintain ratings or attract advertisers. Netflix has so far declined to provide ratings for Lillyhammer, explaining that they don’t have advertisers to appease and that ratings are not especially meaningful to them. While some viewers will watch the show now, the company expects many will discover it years down the road, in the same way someone might binge on past seasons of The Office or Doctor Who because they only just found the show through Netflix. This is a rather mind-blowing concept when you think about it: in an industry obsessed with ratings and live viewership, Netflix is cool with customers discovering a show for the first time years from now.
  • No pressure to produce TV shows on a normal fall season schedule. Netflix may have a premier date they want to keep, sure. But if a writer, director, or cast of actors aren’t available for fall production because of other commitments, then they can easily work around that.
  • A bigger focus on quality. Ratings and time slots don’t matter, so good shows won’t be cancelled because their Nielsen numbers are low. That, combined with funding coming from subscriptions, means content takes priority. Plus, the company has made it clear they won’t follow the one-episode-a-week model: a large batch of episodes or an entire season will be available all at once. This allows creators to actually plan out story arcs, character developments, and other details that are often lost when the creators don’t know how long their shows will survive.

Kitties like marathoning TV shows on Netflix, too!

Kitties like marathoning TV shows on Netflix, too!

As a viewer, Netflix’s original programming sounds like a win-win to me. Much of my Netflix usage involves marathoning TV shows I initially missed (Parks and Recreation and Farscape are two recent examples), and the chance to watch new shows in the same way is exciting. Given their millions of user ratings, years of rental numbers, and a surprisingly accurate recommendations engine, the company has enough data to make informed decisions on what kind of programming different consumer markets will like, and how large those audiences will be.

For television writers, directors, producers, and actors, this is also a wonderful thing. The service is providing a way to make a show outside of the pressures of network and cable television; it’s an opportunity for artistry that’s hard to achieve on other viewing platforms. Netflix’s hope, and mine too, is that such an opportunity will attract good talent and therefore some really amazing television.

Despite all this, some aspects do worry me. As mentioned before, Netflix hasn’t released ratings for Lillyhammer because they don’t see ratings as a useful metric for their programming. So will they just let content creators do their own thing, even if no one watches? Can the company afford that?

Let’s face it: One day, Netflix will stream content on anything with an on/off switch

Let’s face it: One day, Netflix will stream content on anything with an on/off switch

Chief content officer Ted Sarandos says production costs are comparable to that of network shows, but Netflix won’t have to spend nearly as much on marketing since ratings aren’t a factor. Instead, the company is hoping that good word of mouth will lead to new subscribers. But if the original programs become too expensive or don’t attract enough subscribers, then what? Is Netflix’s business model for original content sustainable? A similar model has worked for subscription-based cable channels like HBO, but only time will tell if the same will hold true for them.

Also disconcerting is that Netflix will not be releasing Lillyhammer or House of Cards on DVD. They believe that streaming content is the future and they are working on making their services available on as many platforms as possible—but all that still requires that every customer has a strong Internet connection. And what if they remove the show from their website? Even if the programming is never released on DVD, hopefully they will at least let customers download their shows at some point.

All in all, I hope Netflix’s jump into original content is a hit. Do you think it will be successful? If so, how will this change the television industry? Are you inspired to subscribe now that they have original content, or is that not a hook for you? Let us know in the comments!

Image credit to Jeezny, formatc1, and DennisSylvesterHurd.


Rachel Hamsmith

When not writing for the blog, Rachel is a data entry specialist at QLP. She spends most of her free time consuming a variety of geeky TV shows, movies, and books, as well as funny cat videos and other Internet oddities. Otherwise, she moonlights as an editor for a literary magazine and tries to spend as much quality time as she can with friends and family. You can also connect with Rachel on Google+.

Comments

  1. Bret Bonnet

    Liva la RedBox!

    • Rachel

      Redbox is awesome too! But Netflix is better. ;)

  2. Jeff Porretto

    This Netflix deal is loaded with so much awesome, it’s bursting at the seams! Who doesn’t like to binge on a show they missed the first time around? Well now we get to bing on NEW shows! Sign me up! Oh wait, I already am! Lillyhammer here i come!

    P.S. Arrested Development is going to blow the roof off of Netflix. That’s just one of the greatest things ever… EVER.

    Thanks Rachel!

    • Rachel

      Yeah, I’m curious to see what happens with Netflix after Arrested Development’s new episodes premiere there. I think it’s awesome, but I wonder how many people will grumble about having to pay a subscription fee in order to see the episodes.

      Hooray for TV show binging! And thanks for commenting, Jeff :)

  3. Juliette Vincent

    I’ve been curious about House of Cards and I can’t wait to see the new Arrested Development episodes! Looks like I should finally give in and upgrade my internet speed so my streaming doesn’t have to buffer every few minutes. :)

    I am sad that they won’t be putting them on dvd. There are many times that I don’t have access to internet and though I do like to put my favorite dvds into a digital format for my ipod I still pride myself on my hard copy collection.

    • Rachel

      Totally agreed about the DVD issue. I hope Netflix changes their mind at some point and puts out DVDs or at least downloads — it seems a waste of a money-making opportunity if they don’t, especially for something like Arrested Development (though I can’t imagine them NOT putting at least that show on DVD). We’ll just have to wait and see!

  4. Jaimie Smith

    I do not have Netflix but I am pretty sure that is one of the first things I am investing in when I eventually get my own place!
    Nice Post Rachel!

    • Rachel

      Netflix is awesome! Their pay hike kind of sucked, but in the larger scheme of things, they’re still a very affordable way to get tons of movies and TV shows. Thanks, Jaimie! :)

  5. Eric

    I’m all for this.

    Oftentimes I like the first episode of something I see – but even if I’m a regular viewer of the series as a whole – I find myself usually waiting until the DVD set release to catch up with the weekly episodes I miss.

    However, even after I get caught-up, I do like having a DVD copy of the program so I could watch it again in the future. I think the only thing more frustrating than the original cancellation of “Arrested Development” would be a re-boot of the series, only to be made a Netflix exclusive.

    Back to Joe’s post from awhile back, but there’s a definite pride of ownership when it comes to things like DVDs. Would you rather be lent a DVD from a friend with like interested, or be told to watch it your own damn self, because you have (or should have) Netflix? Eh…you do the math.

    I’m still not sold – nor will I be ever, really – with streaming anything. Will I buy a subscription to Netflix solely to enjoy “Arrested Development?” Nope. Power to them for bringing it back. Shame on them for making it a members-only club.

    Interesting post, Rachel. I’m sure this one will score a good amount of comments!

    • Jeff Porretto

      I going to have to take the opposite side on your point, “Shame on them for making it a members-only club.”

      Netflix paid millions to have the rights to the show, and only charges $7.99 a month to watch it (plus thousands of others). You might as well say shame on every premium channel ever created, especially since they all charge around double that and offer only a fraction of what Netlix does.

      If you think of it as just another channel to your TV, Netflix has INCREDIBLE value. All normal TV does is stream info from somewhere. So if you are going to ignore streaming everywhere else, you’re missing out on some great stuff!

      • Rachel

        I agree, Jeff — even despite their recent pay hike, the product you get for the price you pay is still really amazing. And you’re right about premium channels; Netflix isn’t the only one to do subscription-based content, and those other channels have been successful with the subscription model for many years. Great point, Jeff :)

    • Rachel

      I can definitely understand the frustration of having to pay a subscription in order to watch new episodes of Arrested Development. But hey, whatever it takes to get new episodes, right? :)

      I’m also with you on the sense of ownership that comes with buying DVDs. Can’t say I agree with not being sold on streaming video — in fact, I’m very much sold on it! — but streaming does rely on the content provider and gives the consumer little control over or ownership of the product. So yes, hopefully Netflix does offer DVDs in the future. If anything, they’ll reach customers willing to pay for the show but not willing to pay a subscription, such as yourself. :)

      Thanks for the comment, Eric!

  6. Alex Brodsky

    This is a phenomenal idea all around! Kudos to Netflix!

    The premium channels (HBO, Showtime, etc…) have shown that this model works. I bought Showtime for 3 months for one reason and one reason only: ‘Dexter’. An amazing show, but absolutely the only thing I watched the entire time I was paying for it. Netflix has one-upped them. I pay the same price for Netflix, but there are a TON of other things for me to watch. Netflix’s value has already surpassed that of the premium channels.

    As far as not releasing them on DVD, I’m sure down the road they will. But they’re going to play that close to the vest, in order to get people to buy the streaming Netflix package instead of just waiting for it to come to DVD.

    Great post, Rachel!

    • Rachel

      Great point, about premium channels, Alex — you’re definitely right that Netflix offers even more than the premium channels. I’m sure Netflix is hoping that some of these original shows will be the icing on the cake that’ll get people on the fence to finally sign up for Netflix.

      And I agree about the DVDs situation too — subscriptions are more important to Netflix right now than DVD sales, but I expect the DVDs to appear at some point down the line. Or at least, I hope they do!

  7. Jenna Markowski

    As a huge fan of binging on an entire TV series in one sitting, this sounds like an excellent idea to me! (Even though I don’t even have Netflix yet.) But when I do finally become a grown-up with my very own Netflix account, this seems like something I would totally dig. Plus, Arrested Development?! Boo ya. Does this mean that in the horrible, tragic event that Community gets cancelled, it could still find a home? I can get behind that initiative 100%.

    It does seem like a bummer that they won’t be on DVD, though, if only for the sole purpose that I love to brag about my TV on DVD collection and wouldn’t be able to add those shows to the bunch.

    • Rachel

      I really hope Netflix becomes a place where cancelled TV shows find a new life — that would be amazing!

      And as Alex mentioned above, hopefully Netflix does provide DVDs somewhere down the line. Personally, I hope if/when they do, they load it with behind-the-scenes extras just like any other box set. That’s another huge reason why I buy DVDs, anyway :)

  8. Candice J.

    Although they raised their prices (which sucks!), I’m still pretty in love with Netflix. Other than Family Video, I don’t even know where a video store is anymore. So having the luxury of movies I want to see showing up at my door or streaming to my tv. Its so convenient, it makes me want to slap my mama! (well not mine, maybe someone else tho.) I love their idea and approach and I’m hoping it catches on. I only have a limited amount of free time so If i could watch my favorite season in full instead of having to try and make time every week just to watch one episode. That would be AWESOME!

    • Rachel

      I love the convenience of Netflix, too! Watching a full season of TV can be a time-saver, OR it can be a time-waster if you spend a whole weekend watching a show instead of doing actual work … I just might be speaking from experience here, haha. I wonder how Netflix offering all episodes at once will change the fan experience, though. There’s something special about watching an episode and then freaking out about it with friends or an online community afterwards while waiting for the next one. That’s hard to do when all episodes are available at the same time and not everybody is watching them together.

      Thanks for the comment, Candice!

  9. Mandy Kilinskis

    If Netflix doesn’t release their Arrested Development episodes on DVD, they are making a grave mistake. That being said, I feel like they know that, and would LOVE the extra income of sells those. I don’t know all the logistics of the licensing, but since they don’t 100% own the show, I feel like they will have to.

    [/Arrested Development rant]

    I don’t have Netflix yet, and it’s going to take a lot more than “omg we haz original content now” to make me start shelling out money for it. In this case, Netflix is going to have to rely on word of mouth and reviews to get me really interested.

    • Rachel

      I’m sure Arrested Development will end up on DVD at some point, but like Alex mentioned above, probably Netflix will squeeze as many new subscriptions out of it as they can before offering the DVDs to consumers. Smart on Netflix’s part, but maybe a bit frustrating for fans, depending on how long that time frame lasts.

      Yeah, the actual quality of these original programs is going to mean a lot, too. So far I’ve heard favorable-to-mediocre reviews for Lillyhammer, but I’m hoping House of Cards is good. Hopefully the original shows eventually generate enough good word of mouth to win you over, Mandy. :)

  10. Joseph Giorgi

    Netflix has the name value to pull this off, but ultimately, it all comes down to the quality of the content. If they want to compete against the likes of HBO and Showtime (or even with network television), then they’re going to have to ante up to the steep production costs that come with the territory. I’m not saying that good content should normally cost a fortune, but rather that Netflix needs to be fully prepared to follow through with this type of commitment. They’ll inevitably have to develop shows that offer enough “star” power and production value to gain the kind traction they’re hoping for. They’re well on their way with House of Cards and Arrested Development, but sooner or later they’re going to need a LOT more. After all, people’s expectations are higher than ever when it comes to the shows they watch.

    That being said, I’m SURE that Netflix will be able to pull it off. I can’t wait to see them enter the original programming arena with guns blazing. The shows they’ve got lined up are gonna be fantastic, and they’ve certainly got the financial resources to keep the content coming.

    They’ll deliver the goods! And we, as Netflix subscribers, will be the real winners in the long run! :)

    • Rachel

      Yeah, I definitely wonder if they’ll be able to maintain the production costs necessary to deliver original content on a regular basis. I think these first initial programs that they offer are going to be hugely important, because if they’re successful and well-written, that will attract the quality and talent Netflix is looking for, which in turn will attract more viewers/subscribers. I do think Netflix can pull it off, though. Or at least I very much hope they do! :)

  11. Amy Swanson

    This is a really interesting idea, Rachel! I used to have Netflix, but then dropped them when they hiked up their prices. The quality we got wasn’t justified by the new price :( However, this idea seems like a good one for them! Get people hooked on original programming and see how long before they sign up for other services too.

    Great stuff, thanks!

    • Rachel

      I watch a LOT of streaming TV and movies, as well as DVDs, so I’m definitely getting my money’s worth from Netflix even with the price hike … but I know it’s not worth it for everybody. :) I’m sure Netflix would like to change your mind on that though, haha! Thanks for commenting, Amy. :)

  12. Jill Tooley

    As much of a Netflix fangirl as I am, you’d think I would have already known about Lillyhammer. But alas, this is new to me! I’ll have to check it out and see if it’s worth pursuing as a series. I’m particularly excited for House of Cards.

    This has the potential to be HUGE for Netflix as a company, especially if smaller-scale creators get the chance to produce original series. They could have the next Walking Dead or Mad Men on their hands, which would only bring good things to their subscriber lists. And let’s face it, after all the screw ups they made in 2011, Netflix NEEDS to redeem themselves somehow! By George, I think they might be on track. :)

    P.S. I love the point you made about time slots no longer mattering — I’m convinced that bad time slots are a big reason why so many excellent shows get canceled prematurely! (Well, either that, or they’re just unlucky enough to air on FOX…)

  13. Lee M

    I too am stuck in a marathon rut of watching seasons and seasons of shows over and over on netflix, currently 24! It would be great to see more original shows on there that I’ve not already seen on TV…

  14. Eric

    Netflix has really put themselves out there with the original content. I loved House of Cards and just finished up Hemlock Grove. Lillihammer is next if I can talk the wife into it. But, based on her reaction to the other two shows, it shouldn’t be a hard sell.

  15. Amanda

    Hi Rachel! I’m a college student currently writing a SWOT analysis on Netflix for a class and I wanted to cite your article. Could you tell me the date you published this?

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