Seth Shapiro's Business Innovation Blog

There’s been a media blitz over Netflix’s House Of Cards, and how revolutionary it is.

House Of Cards  is the most interesting show of the year. But it’s not revolutionary. Let’s break it down.

1. Exploding Commercial TV

House of Cards and Netflix have not exploded the restrictions of TV (show length, plot resolution) that endured for decades.

The Sopranos and HBO did that, by altering length of content from week to week and doing way with the need commercial breaks.

2. Redefining TV Narrative

House of Cards does not smash the self-contained, enter-anywhere model that reigned from the beginning of TV.  24 and Lost did that.  Those shows were less erudite than House of Cards – but their DVR-era serialism was a major breakthrough.

Before then, you could enter a TV series at any episode. Afterwards, you had to watch from the beginning.

3. Big Data-Driven TV?

A recent NYT piece claims that Netflix redefined TV by using viewer analytics – certainly a key to the future of media – to  ensure that HOC would be a hit.

But does it really require Netflix’s superb and proprietary data mining environment to know that David Fincher + Kevin Spacey + a UK hit remake + $100 million = media buzz?

No. Of course not. There was no secret sauce required to know people would watch. And assessing economic value via viewership numbers would require reviewing viewership data – which Netflix keeps private.

4. Invention of Binge Viewing?

Due to the way Netflix works,  HOC is the first show designed to be consumed as fast as viewers can handle it. In fact, the Netflix UI gives the viewer a mere 15 seconds from the end of an episode before it launches the following one.  Which, frankly, is awesome.  But it’s not new.

The real giant of Netflix binge-watching comes from a cable network. It’s a show with the least likely high concept in history: “high school chemistry teacher gets cancer, cooks meth”.

AMC’s towering creative achievement, Breaking Bad, has spawned year after year of true breakthrough viewing patterns – see here and here, for example. From Gus Fring to   Hank on the toilet, Breaking Bad (and its labelmate Mad Men) have completely remade the narrative arc of what TV means in our lives and times.

5. Netflix Kills Cable TV?

The news blitz is not about House of Cards anyway, not really.  It’s the return of an existing  presumption: that we are witnessing Netflix’s potential to conquer cable.

That will not happen.  As I’ve written before, this is a sexy thought – but its not based in reality. In the economics of media, Netflix is a buyer– that is, they rely on the major studios to license them content. Without big studios, Netflix’s offering to the public dries up – fast.

And the dirty public secret is that – far and away – the major revenue drivers in Hollywood are cable channels.  These are the networks that some hope Netflix can defeat.  But that’s the modern day equivalent of Orboros, the snake that eats its own tail:  no studio is going to spite its master to benefit Netflix.

To underline this, see the graphic above.  I use it in my USC course – it lists the content controlled by three parties: 1. Comcast/NBCU; 2. the three owners of Hulu; and 3. Netflix.

The dificulties of the Netflix-as-cable-killer argument were underscored today – when CEO Reed Hastings announced that Arrested Development would run for only one season.

The truth: Netflix is a great service playing a difficult game.

6. Making a Great Show is Enough. Really.

The reasons HOC is great are the conventional ones: stellar performances, exemplary writing and directorial prowess.  The talents of Spacey, Wright, Fincher & Co exhibit an extraordinary degree of nuance, intelligence and grace… In other words, it’s an outstanding TV show. Not a new kind of TV show.  It’s a great effort from a new “network” that continues to innovate, and to contribute disportionate value… much more value, dollar for dollar, than satellite or cable.

House Of Cards is a great looking and well-produced show. It’s a fine contribution to the television landscape, and probably television marketing campaign in 20 years. But marketing is a game changer – the show is not.


Posted in Blog by Seth Shapiro.

Leave a Reply