MG Siegler Mar 18, 2011
Three years ago, if you had asked people to choose between cable television and Netflix, the vast majority would have laughed at you. A DVD-by-mail service versus thousands of pieces of content always at your fingertips?
No one is laughing anymore.
Netflix has confirmed that they intend to pay for House of Cards a new show being produced by David Fincher (yes, he of Fight Club, The Social Network, etc) and starring Kevin Spacey (yes, he of The Usual Suspects, American Beauty, etc). Netflix is not paying for the full production of it, but instead they’re paying for the first-rights access to air it. In other words, they get the first “window” to show it to viewers.
And while the company is saying that this isn’t a shift in strategy, it could end up being potentially much more than that.
Up until now, Netflix has not had content in this first window. Instead, they’ve focused on the second or third or even fourth window. That is, they’ve shown content after it’s in theaters or on television for its initial run. And sometimes they don’t get content until after it’s been in theaters and then on television for quite some time. This catalog of content has been the service’s bread and butter.
But with House of Cards, the game changes. For the first time, they’re going to get people signing up to Netflix to get first access to content. And if it’s as good as the talent behind it suggests, they might get a lot of people signing up for that very reason.
And if that’s the case, they’ll be doing a lot more of these deals. And that would effectively make them a premium cable television channel — like HBO or Showtime. But they’ll be one with thousands more pieces of content for a lower monthly price. And they’ll be one not burdened by any artificial show times. Most importantly, they’ll be one not burdened by the cable television model — at all.
If Netflix’s new gamble here works, this is the absolutely the future. In three years, we won’t be paying $75 a month to a giant cable conglomerate. We’ll be paying $8 to Netflix and other players that pop up — like HBO (by themselves), perhaps. Sure, there will still be the monthly fee for Internet. But most of us are already paying that. We’d just be removing the ridiculous $75 cable television fee that gives us thousands of channels with content only on at a certain time — and most of which we don’t want.
Of course, the cable companies will push back against this. Maybe they’ll jack up the price of Internet even higher if you don’t also subscribe to cable television. You’d think the courts would stop something like that from happening, but they haven’t stopped these companies from basically having monopolies over entire cities and regions in the U.S.
But hopefully other alternatives will bubble up. Google or wireless or both or something we haven’t even thought about yet. The market will demand it.
The cable television model has been broken for far too long. For over a decade now we’ve heard the promises of a la carte content and pricing, but it never came because there was no real incentive for it to come. (By the way, how much do you want to bet we see it soon if this new Netflix maneuver works?) There is a reason that everyone talks about quitting cable. It’s a rip-off. The content is 99 percent shit. And the presentation is awful. And the overall experience is worse. You know, all the little things.
Now that model is being assaulted from all sides. And this Netflix bet is perhaps the best sign yet for a cable-less future.