Talking tech since 2003

When Netflix first announced that they had acquired exclusive rights to broadcast and stream a new television dubbed “House of Cards”, I was incredibly confident that the company had struck gold.  In-house content had the potential to allow Netflix to expand beyond anybody’s expectations and gain a larger audience.  Of course House of Cards was a huge milestone for the media giant, but when the announcement first came about I think everyone was questioning how far the company would take their new venture.  This promising new page in the company’s future seemed to be very promising, and I for one was confident that House of Cards was going to be only the first of many original series that Netflix worked to acquire and bring on as part of their offerings.

As Jeff has previously pointed out Netflix’s implementation of original content is an important component that the company should really be considering in order to expand their outlooks and ultimately their bottom line.  But regardless of the promising potential that original content would bring Netflix, the company has officially closed the book on the question in the back of our minds by making it clear that they will not be actively perusing the acquisition or production of Netflix-exlusive original series.  While I can understand Netflix’s strategy of “playing it safe” and not getting involved in new areas of the industry, part of me honestly thinks that this is the wrong decision for Netflix and that the company is passing up quite a bit of potential by opting not to involve themselves in original content.

Think about it.  Networks like HBO and Showtime have done very well for themselves by producing exclusive series that draw people to subscribe to their offerings.  I even know a few people who subscribe to premium cable networks just to follow one specific show, so there’s no denying the fact that Netflix could indeed become more attractive to more consumers if they were to produce and advertise a handful of well-written and well-produced series.

Moreover, such a move would give Netflix a level of self-reliance that the company can only dream about now.  By undercutting other television networks and gaining rights to shows on their own, Netflix would not only help to free themselves from the grasps of other networks, but if they were to play their cards right they could even end up re-selling rights to their shows and content to other “traditional” television networks; completely turning the table in retrospect to how they work with studios now.

At the same time, I am certain that Netflix would end up putting themselves in a very awkward situation with existing media entities that they already have standing relationships with if they were to become competition to said networks.  After all, how willing do you think existing television stations and media entities would be to sell do business with their own competition?  Having said that, I honestly believe that Netflix would step on a few toes if they were to attempt to obtain original series and that their library and user-base would likely suffer.

And in terms of bottom line, I highly doubt that Netflix would be able to monetize new series enough to justify their acquisition efforts.  Sure, they would open themselves up to a wider audience that would have more of a reason to subscribe to the services, but as a whole I really don’t see it paying off.  Simply put, exclusive rights don’t come cheap – even for undeveloped series – and Netflix would have to invest quite a bit of capital and effort to go anywhere.  With their current pricing structure starting at eight dollars per month, I simply cannot fathom Netflix being able to juice more money out of their consumers to cover their venture.

So as disappointed as I am to see Netflix turn down the original content business, I can understand that the company simply isn’t in a position to branch out that far; for now, anyway.

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