- Risk of actors or directors having a fall out. (Or something else occurring that makes episodes not coming out on time if at all.)
And you make a good point that thats why Netflix is trying with 1 show and not 10.
But aren't all these risks you listed further minimized by experimenting with a $10 million show than a $100 million show?
My thinking is: Netflix does not care about risk at all. If they wanted to minimize risk, they would have gone with lower priced shows. Or they would have gone with a lot more shows. The only reason they have gone after a high priced mainstream show is as a negotiation tactic. To make a stand against studios and cable companies. "Play ball with us. Because if we can't play together, we will compete together."
Actually they are not reducing their risk by keeping the number of shows low. Here is why:
Upto 211 degrees, nothing happens. At 212 degrees, water boils.
Similarly, will 1 good show make a lot of people subscribe to Netflix? Even if the show is orgasmic - I doubt it. There is no momentum here. No tipping point. 2 shows won't do it either.
I don't know what the minimum number of new shows is that would get a lot of folks to subscribe. But for myself, I would put it near 12 or so.
If Netflix wanted to reduce their risk, they should have targeted niches that are not so expensive. Mainstream entertainment is not a good idea to start with. Something like History channel or World Travel is.
But going with low risk niches, would not generate so much publicity for them. Would not make the studios and cable companies take notice. Netflix is in a fight with them - and so this is a strategic move to get noticed. Not a risk reduction move.
Netflix has already damaged their brand of original shows for me. After years of starting something and having it suddenly canceled and left unfinished I now don't bother to watch any original Netflix programming unless it's already a completed series.
I'm sure it makes sense in the short term to cancel things that aren't bringing in enough revenue, but when you have years of aggressive cancelations it also causes some long term damage that might end up harming the platform even more than spending a bit more to make a quick series conclusion.
They also lose out on potential long tail value of a completed show, like how arrested development wasn't the most popular at it's initial run but later made up for it in DVDs and streaming. People won't want to start watching something they know doesn't finish even if it would otherwise be a great show for them, so it becomes a complete waste of production money instead of a possible future asset.
Most corporate decisions these days seem like they're made to maximize a short term stock or revenue bump... and then the execs rake in a huge bonus and jump ship before the future fallout hits.
I agree entirely but that's what makes Netflix's choice all the more interesting. They have the opportunity to serve the long tail but thus far they haven't (with their original programming at least). Instead they've spent 100 million on 1 show on the belief that it would pay off big - in both attracting new customers and retaining existing.
There's some good observations here, but I would stop short of the claim that "for viewers, this can only be good." It's not good that some great movie libraries have already been stripped from Netflix because the contract renewal was going to be too expensive. It's not good if Netflix goes all-in on original programming and fails, potentially taking the rest of the company down as well. It's not good if Hollywood feels little pressure to make it easier for consumers to access their content because they're getting great contracts with traditional distributors.
It's also interesting that this article makes no mention of Netflix's 3 other original series that are not as popular as House of Cards and Arrested Development - Netflix is probably making as many flops as hits at the moment, and that adds an important qualification on the risk/reward calculation of its strategic investment in original series - the headliner shows have to not only justify themselves (as the article describes), but carry the duds as they come along as well.
I don't know, I don't think we give network/cable TV enough credit.
I'm pretty intrigued by stories of how certain shows flopped in their first season (or two) but managed to persevere through some persistent TV exec who kept it funded until they got the story right.
Plenty of examples of mainstream TV shows that went this route. Seinfeld, The Office, It's Always Sunny In Philadelphia, the list goes on.
TV execs really care about the product. By contrast, I don't think Netflix cares about the product. I think Netflix cares about the data about the product, which ultimately means dropping an original after 2 seasons.
It works I guess, but I've haven't had a Netflix subscription in a while, and on those occasions where I do renew it I just take a peek for a month before leaving again. More than enough time to watch 2 seasons of TV.
I'm arguing that isn't always true. Yes, some shows knock it out of the park in season 1. Other shows take a few seasons to really hit their stride.
It appears Netflix is taking a SV/VC approach to shows. Spend big, fail fast, and count on a small number of massive hits to succeed. While this may pad revenue in the short term, I'm not convinced it's the best long-term play. If subscribers get annoyed at short production runs and inconsistent programming, they leave and go to Disney or Hulu or Amazon.
Of course, I'm not in the industry at all, so I could be wrong. But, as a consumer, it is annoying to have Netflix push a few shows really hard, only to have them cancelled after 8 episodes.
> You could instead make intentional decisions to fund miniseries and content with clearly defined "endings".
Netflix funds plenty of original miniseries, movies, comedy specials, and other close-ended content. But the high-risk, high-reward, could-be-tentpole series get an understandably-large share of media attention.
Unfortunately I can't edit my post but I suppose the modification would be to widen my point: i.e., that my frustration actually applies to shows made by a variety of networks, but picked up by Netflix.
The result is actually the same though: the library of shows Netflix hosts (whether their own or otherwise) becomes less valuable due to the number of them that have been cancelled before reaching a conclusion.
Netflix is not trying to grow their subscription base.
The "risk" to which he was referring to is the risk of the show failing completely by some metric (e.g. no one currently subscribed to netflix is watching it), and all that money being effectively flushed down the drain.
It's the risk of going overbudget. Or the risk of actors and directors having a falling out.
There's dozens of factors that go into making a show successful and this test is to see how Netflix as a company can handle them--either directly or by proxy. If this test is reasonably successful then maybe in the future, they will make a play to have original content garner them more subscribers as a competitor/partner to say HBO or Showtime.
Well Netflix formula is throw a bunch of stones in the ocean and see what sticks and then make more of it. Its a bad strategy because users waste time watching content they would rather not watch. HBO imo is the only platform that focus on quality rather than the number of shows.
I must have expressed myself really badly, since people are reading the opposite of what I intended.
Netflix bet the farm on computer-generated plots, which is partly how they have such an immense quantity of content - yet the badness shines through. OTOH the handful of decent shows they have are all fully fledged concepts that they bought.
Like most people I really have to rethink the value-per-$ of this proposition, but if Netflix just erased all the crap maybe 10 up-to-snuff and 2 to 3 really good shows a year would remain. Worth paying what it is? If every new show was like "1983" or "Fauda"...
This is a classic dilemma which doesn't have any clear answer.
Individually, I assume Netflix has the data to back up the fact that each show should have been cancelled -- that no matter how critically acclaimed or how devoted the fanbase, the shows simply didn't have enough fanbase to justify the cost.
But then in aggregate, it adds up to an unintended narrative that could prove to be harmful to the bottom line: that Netflix cancels shows. So people stop watching the first season to see if a show survives into a third... stop recommending Netflix... and it's harmful to the bottom line.
The thing is, there's no obvious answer. If Netflix didn't cancel any of these shows, it would go out of business and/or not have the money to fund future (hopefully successful) ones. It's the same way with Googling canceling products: it's ridiculous and money-losing to keep around every failed product, but individually they add up to a reputation.
It's a classic damned-if-you-do, damned-if-you-don't. People love it when companies experiment and launch lots of new products/shows -- that's where innovation comes from. But then they hate it when the unsuccessful ones get cancelled, because every product/show has some set of users/viewers who love it.
But I see no solution, except for companies to continue cancelling unprofitable things, and people to continue complaining about it.
I wonder if the real goal is the secondary effect. If you watch a show on Netflix and enjoy it, that’s good for customer satisfaction. If you watch their exclusive original content, not only are you satisfied but now you are telling all your friends about something only Netflix can provide.
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