Netflix got its start as the red-envelope movie rental service, later turning into the video streaming authority (bankrupting Blockbuster in the process), and now may be making yet another major move: bankrolling original content.
Deadline Hollywood reports that Netflix successfully outbid HBO and AMC for the rights to House Of Cards, an adaptation of the successful 1990 British miniseries. The show reportedly stars Academy Award winning actor Kevin Spacey, who we know isn’t cheap, and David Fincher, who is hotter than ever following the success of The Social Network.
Netflix purportedly put $100 million up front to get the show and even ordered up two seasons for a total of 26 episodes (nearly $4 million per episode) all without seeing a pilot. The original (and the books it is based on) promise to provide enough material to adapt. [Update: The WSJ reports that "a person familiar with Netflix's plans" says the amount will likely be far less than this, but did not give a figure. $100m is certainly a lot, but aggregate costs for a 26-episode show with two A-list Hollywood types at the helm isn't really that crazy, especially considering the material and how Netflix would want to make a splash.]
For the longest time, Netflix has built itself on providing easy-access content to users at a low price. Netflix never opted to pay high prices for new movies right after release. This news is a radical change and pretty ballsy on Netflix’s part – but it’s so crazy it just might work. Think of it like picking up the next Sopranos, only exclusively on Netflix, and Boom! profit. Subscriber rates will explode, so long as it’s the right series. The trick, as premium networks will tell you, is picking the series. House Of Cards has pedigree, but the caprices of TV audiences are difficult to predict.
It’s probable that Netflix has just been waiting for the right series on which to spend a bit of its huge mountain of cash. And committing without seeing a pilot — a rare move in the TV industry — means they’re serious. And you can bet that this won’t be the last show they buy, assuming it isn’t a huge flop.
More recently, Netflix has been striking deals with networks like Starz and CBS to stream TV shows and movies. And $1 billion for a five-year deal with Paramount, Lionsgate and MGM to stream their content. But will they be as willing to deal with a direct competitor?
If Netflix is successful at taking viewers from traditional premium media (HBO, Cinemax, Showtime) they could really shake up the industry. Imagine a scenario where TV viewers could easily cut the cord and still get new up-to-date quality content. All it would take is one of the many Netflix streaming boxes available.