And the Award for the Next HBO Goes to…


The quirky little start-up that once printed money by mailing you DVDs is hell-bent on morphing into the HBO—and the network, and the any-show, any-time streaming service—of tomorrow. Can Netflix and its pathologically modest founder, Reed Hastings, pull it off? Who knows? But it’s going to be fun to watch, starting this month with David Fincher’s $100 million House of Cards. The only guaranteed winner in the bloody battle for the on-demand future? You. On your couch

In the beginning, there was the tube. The cathode-ray tube, that is, and “The Tube,” that squat shiny box that ate up half the living room and all of your family’s attention. Then came cable, and videocassettes, HBO, DVDs, and the Sony PlayStation and TiVo, satellite and Blu-ray, and the ninety-six-inch flat-screen and a slew of awkward little boxes with those mysterious colored lights, all of which changed the way we entertain ourselves. But most important, there came the Internet and Steve Jobs and Jeff Bezos and Reed Hastings, who blew up all the old paradigms about who, what, when, where, why, and even how we watch, busting the chains that bind us to our cable boxes, to the never-ending scroll of 739 channels, to our prime-time prison.

Hastings, the CEO of Netflix, has a name for this prison and what it does to the people trapped inside it: managed dissatisfaction. “The traditional entertainment ecosystem is built on it, and it’s a totally artificial concept,” says Hastings. “The point of managed dissatisfaction is waiting. You’re supposed to wait for your show that comes on Wednesday at 8 p.m., wait for the new season, see all the ads everywhere for the new season, talk to your friends at the office about how excited you are.” If it’s a movie, he adds, you wait till the night it opens, you wait for the pay-channel window, you wait for it to come to cable. Waiting means pent-up demand, millions of people watching the same thing at the same time, preferably at night, when they’re pliant with exhaustion and ready to believe they need the stuff being hawked in all those commercials. Waiting, Hastings says, is dead.

Arrested Development is back!

Hastings is a rangy, goateed 52-year-old with a master’s in computer science from Stanford who left the Marine Corps officers’ training program to teach in the Peace Corps in Swaziland. It’s a mild California morning in November, and he’s sitting at a weathered teak table outside the modest house he shares with his wife and two teenage kids in hippie-inflected Santa Cruz, thirty minutes from Netflix headquarters in upscale Los Gatos. Barely 1,800 square feet and furnished with puffy couches and few personal touches beyond some family pictures on the mantel and four sleeping dogs his wife rescued from the shelter, it looks like the sort of pad a newly hired midlevel software executive might rent while he was looking for something to buy. Hastings’s only domestic indulgence is a $5,000 handmade Italian espresso machine—”the closest I’m going to get to a Bentley,” he jokes—in the cozy Sub-Zero-less kitchen.

But just because Hastings doesn’t care about boats and cars doesn’t mean he isn’t relentlessly ambitious. After all, the guy is betting everything on a breathtakingly expensive plan to transform his once humble DVD-by-mail company into a worldwide on-demand behemoth and a major force in original programming, a supercharged HBO. Within the next decade, probably the next five years, he figures, ours will be a seamless, multidevice on-demand world, a place where services like Netflix will be so fat with content that the idea of paying a $150 monthly cable bill for a bundle of unwatchable crap will seem as quaint as gathering around the Sony Trinitron with Ma and Pa on Tuesday at 8 p.m. for All in the Family.

Is It Time to Cut the Cable Cord?(click to enlarge)

On February 1, all of Hollywood will be watching the debut of House of Cards, David Fincher’s drama starring Kevin Spacey, for which Netflix outmaneuvered HBO. (Fincher, the director of Fight Club and The Social Network, has never before done television; Hastings gave him $100 million and let him make two thirteen-episode seasons.) Subscribers will be able to stream the entire first season of the pitch-black Beltway thriller—imagine the anti–West Wing—in a single sitting. Within months of that debut, two other series, Orange Is the New Black (by Weeds creator Jenji Kohan, from a memoir about a Smith girl in a women’s prison) and Hemlock Grove, an adaptation of the supernaturally tinged novel, will also stream exclusively on Netflix. And in the spring, Netflix will debut the long-awaited season four of Arrested Development, the beloved series that Fox canceled seven years ago. (Also on the tarmac:Derek, Ricky Gervais’s much maligned show about a dim-witted eccentric who works in a nursing home, and season two of Lilyhammer, Netflix’s first attempt at an original series, which debuted last February and stars Steven Van Zandt as a mobster taking shelter in a small Norwegian town.)

Netflix’s first original series, Lilyhammer.

The strategy may gut some media conglomerates along the way and could prove too costly for even a cash-rich company like Netflix to sustain, but one thing is certain: It will make a lot of viewers—bingeing on brand-new shows made by the hottest writers, directors, and producers—deliriously happy. “This is the direction that storytelling is evolving, where you’re going to have the most interesting story lines, the most interesting characters,” says Spacey, who is also an executive producer of House of Cards. “What a company like Netflix is doing is the ultimate expression of individual control, proof of what people’s attention span really is.”