In early 2011, the independent studio Media Rights Capital was going around pitching an American remake of a British political drama miniseries. Unlike its British counterpart, the American remake would feature as a long form show — allowing for complex characterization that film at the time couldn’t permit. Director David Fincher, who wanted to produce this venture, stated “I felt for the past ten years that the best writing that was happening for actors, was happening in television. And so I had been looking to do something that was longer form”.
And so they went around making offers to the usual suspects — HBO, Showtime and AMC, and so on. However, Netflix, that had been trying to get into original programming, swooped in and made the highest bid, willing to put forward not only what the producers were asking for, but commit to two seasons outright.
This had never been heard before in the history of television, and allowed for creative scaling to the long term. Kevin Spacey, who had been called in to produce and star in this new show, said “We know exactly where we are going”.
On February 1st, 2013, House of Cards saw its debut and immediately encountered critical acclaim. It became the first online-only web television series to garner major Emmy nominations. And it was just the start.
How did original content become a thing?
It all starts with HBO — The Wire, The Sopranos, True Detective, Game of Thrones, Six Feet Under, The Larry Sanders Show, Curb Your Enthusiasm, Veep, Silicon Valley, Girls, Sex and the City, Band of Brothers, Boardwalk Empire… the list goes on. Basically, HBO has put out some of the best and most enduring television content in history. HBO had stumbled upon a fundamental truth within television — not every show is going to be a M.A.S.H. or a Friends. And it’s better to stack your inventory with high quality shows for long term success, than focus on the short term with mediocre and successful shows.
And they weren’t just making great shows. It was the fact that they were providing users with a new medium and format — the shows didn’t have any advertising for content other than HBO’s own, and this lack of dependence on ad cycles, allowed content makers to feel free to venture into otherwise controversial territory involving explicit content and nudity. It gave users an HBO on Demand channel so that they could view content they specifically wanted to watch — a preview of the streaming culture that was about to explode.
It also invested heavily in all aspects of the production, from scriptwriting to direction to animation, and this helped raise the overall calibre of the programming. Now, HBO lies at an interesting point in its relationship with original content.
Netflix’s head of programming, Ted Sarandos, told GQ that Netflix’s goal was “to become HBO faster than HBO can become us”. And so far, both companies have been trying to emulate each others’ USPs. Netflix has aimed to produce 50% original content, a goal that lies eerily close to HBO’s original goals, while HBO has begun the split away from cable with its streaming service apps HBO Now and Go. They’re both big players, but it’s fairly clear that Netflix got a massive portion of its direction straight from HBO — and now, has gained enough momentum to sail past it.
Netflix also has deals with Disney that allow it to host every new Disney movie that comes out, and with potential buyouts from the likes of Disney and Apple, Netflix’s stock is pretty exciting at the moment.
The Role of Technology
When you think of Netflix, you aren’t picturing a tonne of lab coats, but the role of technology, research, and analysis, is actually massive. To start with, it’s an incredibly simple product. So simple, that you don’t think twice — that’s their hedgehog concept. Just a really straightforward mechanism that provides you a bunch of content and a UI that makes it easy to navigate.
But there are two primary technological parts of Netflix — one lies on the actual media consumption side, and the other on the navigational UX.
The first is compression algorithms. To the individual who does not want to go prowling through heaps of technical documentation, it’s making high quality video smaller in size, so that it doesn’t consume your bandwidth and make it impossible to accomplish anything else on the same internet connection. It’s making flashier films more vibrant, and subtler films feel more static. And it’s using technology to improve the media experience the same way dynamic compression in music can completely change the way you listen to a song. It’s the reason you can now stream content in 4K without any lag on your otherwise upsettingly slow internet connection.
The second technological component is recommendations — everyone now knows the incredibly detailed search criteria you can use to find the 20th century Russian political dramedy of your choosing — but not everyone knows how beautifully Netflix has designed its recommendations to benefit the user. Those ratings you see aren’t general ratings. If Transformers: Age of Extinction has half a star, it isn’t because the public thinks that it’s terrible (although it should). It’s because you had the common sense to rate Breaking Bad and Citizen Kane highly, and Netflix paid attention to your ratings. It looked at your general patterns, and it looked at the patterns of people who have similar tastes to you, and it came up with an elaborate recommendation and rating system to suit all your cinema needs.
Now how can you leverage this? For one, you can make multiple profiles for different moods — happy, sad, angry, energetic, mindless, and so on. And secondly, you can reliably find something you enjoy with the least clicks you have to. It just works.
Netflix also knows when you got hooked. It looked at everyone’s viewing data for a bunch of shows and discovered which episode really got people’s attention. Fun Fact: It’s never the pilot. And the beauty of this, is it fits perfectly into Netflix’s paradigm of producing good long term content and releasing all of it on the same day — the binge culture has Netflix to thank in its entirety.
At The Emmy’s Table
I’m going to try to make everyone’s lives simpler by merely skimming over the phrase ‘Netflix and Chill’ - a euphemism for making the beast with two backs. But beyond being an excellent background for waving the Weasley wand, Netflix has produced some actually watchable content; so watchable, in fact, that it’s consistently nominated at the Emmys — the most coveted television award.
Arrested Development, House of Cards, Orange is the New Black, Bloodline, Grace and Frankie, Unbreakable Kimmy Schmidt, A Very Murray Christmas, The Comeback Kid, Master of None, Hemlock Grove, The Square, Chef’s Table, Daredevil, Hot Girls Wanted, Jessica Jones, Making a Murderer, What Happened Miss Simone, Winter on Fire… it just goes on and on.
The idea is that a viewer isn’t going to come for just Breaking Bad, or just John Mulaney, but over time, that list of ‘I should watch that — is it on Netflix?’ builds up. And then you subscribe, and it’s game over.
Netflix already has all this great content under its belt, and its only pumping out more. It’s a tremendous company that has been through many changing technological cycles - including that of DVD to streaming - and come out unscathed. Undoubtedly, its subscriptions have begun to wane — the market is saturated to a point where essentially everyone has a Netflix account. Naturally, international markets are going to become even more key to its operations, but what about locally? Where does Netflix go from here?
They can likely beat HBO at its original content game over the next 5 years, but can they also beat its movie catalogue — its biggest moneymaker? Do other players in the market like NBC, ABC, PBS and FX join hands or do they try to emulate Netflix’s success with their own streaming platforms? Only time will tell…
If you’re interested in following up to see where Netflix is going, be sure to check out the results of its Third Quarter Earnings Review on October 17th.
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