It’s another original series created by the streaming service and it takes their game up a notch. As USAToday wrote in this piece, it’s a $100 million gamble. If you’re a Netflix customer it’s easy to find. If you’re not, you can watch the first episode free at netflix.com/houseofcards for the month of February. We’ve been watching it and think it’s terrific. I also think it’s a terrific example of good business practices. Let me explain.The series is a political drama starring Kevin Spacey, Robin Wright, and Kate Mara and consists of 13 one-hour episodes, all of which are immediately available for streaming. Unlike regular TV where a series unfolds on a weekly basis, Netflix has released every episode of House of Cards at once. As it turns out, being a streaming service allows them to understand their customers’ habits fairly well. In this case, those habits involve bingeing on content for hours at a time. Because the business isn’t built on ratings and ad sales, aggregating the audience at the audience’s own pace based on this flexibility is a win for the user as well (hopefully) for the company. There is no pressure to get the audience to flock to the show in a narrow window. In other words, Netflix has recognized that the world has changed and they’ve changed their game along with it.
Marketing has changed as well. While the promotion Netflix is doing is somewhat analogous to that any TV network would do for a new show, Netflix has the added advantage of targeting those ads to the individual user based on their viewing history. It’s a rifle approach vs. a broadcast or even a cable network’s more widely targeted shotgun. Netflix believes they can spend less on marketing while generating higher viewership.
House Of Cards has changed the game in other ways. TV networks are often reluctant to give out long-term series commitments until they can see how well a show performs within their traditional business model. Netflix has already committed to 26 episodes over two years – a huge investment. Content creators have noticed and my guess is they’re suddenly a lot more open to working on first-run product with Netflix. While being on major broadcast TV might be good for one’s ego, a firm, long-term commitment is a lot better for the balance sheet.
Those are just a few examples. The real question is how we can do the same in our own businesses to take advantage of how things are changing. Any thoughts?