What Netflix’s ‘House of Cards’ Means For The Future Of TV
- Ver Original
- Março 4º, 2013
It’s hard to watch Netflix’s’ House of Cards’ and not get the feeling that it’s not only great programming, but also a seminal event in the history of TV.
The story itself is sort of “Tony Soprano meets The West Wing” and it features an impressive cast including Kevin Spacey and Robin Wright, but there are also a number of elements that we haven’t seen before.
It’s the first major TV show to completely bypass the usual television ecosystem of networks and cable operators. It’s also the first time that a series has released an entire season (thirteen episodes) all at once, for viewers to watch at their own pace. Finally, it’s the first time that programming has been developed with the aid of big data algorithms. That’s a lot of firsts.
If there’s any doubt about the venture’s success, competitors are already rushing to emulate it. Amazon has already announced it is investing in original programming to compete with Netflix. For its part Microsoft, which has already been inking programming deals for its Xbox Live platform, just announced that it bought exclusive rights to an Indie movie and Netflix itself recently acquired exclusive rights to the hit series Arrested Development.
Clearly, the game has changed.
The New Entertainment Battlefield
For decades, the TV business was a fairly orderly affair. You had a clear potential market that you could technically cover and predictable ad rates. The value of programming market was driven by what those market conditions could bear and the calculation was reasonably simple: audience x ad rates – margin = programming budget.
The pecking order followed the market structure. Big networks would invest in original programming in order to win audience share as well as some lesser fare that could pad margins. Local stations would buy the rights to reruns and old movies. There was a level playing field where everyone knew who they were competing with and why.
Nowadays, that nice, tidy little world has fallen victim to what Vivaki’s Rishad Tobaccowala calls digital leakage, where industry borders dissolve and it’s increasingly hard to distinguish between friend and foe.
Here’s a quick overview of the players:
The Networks: While it’s easy to write off the old traditional networks, their business remains surprisingly strong, maintaining impressive operating margins and steady growth. They continue to play an important gatekeeper role, curating high budget content.
YouTube: Google’s YouTube is evolving into an ecosystem in its own right, even building its own production facility to create original programming. There are also rumors of it launching paid channels for the platform.
It has also inspired a new breed of start-ups, such as Maker Studios and Fullscreen, who are developing their own channels and networks for the YouTube. Fullscreen, similar to Netflix, it even has its own analytics platform, which can get the right content to the right viewers.
Cable Companies: Much like the TV networks, old-line cable companies remain a power in their own right, controlling access to consumers through both set top boxes and Internet service.
However, even here the playing field shouldn’t be considered static. Comcast recently acquired NBC from General Electric and is now a major player in both cable and programming (as is Time Warner), while Google Fiber has recently emerged as a potential competitor to the cable industry.
Paid Networks: Traditional paid networks continue to develop some of the most highly acclaimed programming on TV, such as HBO’s Game of Thrones and Showtime’s Homeland. HBO also offers an app, HBO GO, that could conceivably evolve into a competitor to Netflix, although it currently requires a cable subscription to use.
Apple???: While rumors of a full-fledged Apple TV abound, they still haven’t released a product. Moreover, although Steve Jobs thought that he had cracked the TV problem before he died, even if he were still alive it is unlikely he would be able to repeat the coup he pulled off with the music industry.
The TV players remain highly vibrant and profitable and are unlikely to be bowed, which is why Apple has had trouble inking content deals and, with their hard nosed approach, will most likely continue to falter. So, all in all, it’s a mess. No one seems to have developed a dominant model and Netflix’s “House of Cards” success will only muddy the waters further. One thing is for sure, the living room is quickly emerging as the new digital battlefield and this will be an exciting area to watch in the coming years.