One way for Netflix to become more of a “must have” service and not just a “nice to have” could be to distribute must-watch original content.
So a few years after shutting down its Red Envelope business that invested in indie films, the company is reportedly getting back into original programming — via a huge investment in a series directed by David Fincher and starring Kevin Spacey.
Deadline Hollywood reports that Netflix has outbid several networks, including HBO and AMC, for the series, “House of Cards.” The deal could be worth $100 million or more.
If true, that’s a big bet on a single series — something Netflix hasn’t really done at all, focusing instead on older, cheaper content to stream from the major networks.
(The truth could be somewhere in the middle. As AllThingsD’s Peter Kafka tweets, it’s very hard to believe Netflix is doing this. Perhaps it’s teaming up with someone in exchange for a better viewing window?)
It could be a disaster and a huge waste of money. Or it could help Netflix become the leading, super-efficient entertainment platform of the future — both a producer of original series and a huge distributor.
That could really drive the cable networks and operators nuts. (And could ultimately force the price of bandwidth up, if Netflix streaming starts to replace cable TV watching.) Or any number of potential scenarios.
For context, Netflix had about 20 million subscribers at the end of last year, and HBO had almost 30 million. About 127 million households in the U.S. are passed by cable TV service.
Netflix declined to comment.
Update: The WSJ also reports that Netflix is in talks to distribute the series, but a “person familiar” with Netflix’s plans tells the WSJ that it is likely to spend “much less” than $100 million.
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