Not content with dominating the DVD-by-mail and streaming markets, Netflix has reportedly expanded its content offering by outbidding several TV networks for a scripted original series.
The series, which is a remake of a British drama series called House of Cards, stars Kevin Spacey and is helmed by The Social Network director David Fincher. Netflix is reported to have outbid HBO and AMC for the series by offering nearly $100 million.
Analyst Michael Pachter believes the acquisition of this type of original content is the next logical step for Netflix, which already spends an enormous amount of money on content. Says Pachter:
“They need to spend $1 billion or so on content, so 10% of their costs on original programming is an appropriate risk to take and see if it works . . . Their growth at this pace is unsustainable unless they start to take market share from HBO/Showtime, and the biggest obstacle to overcoming those two is the lack of original programming. It might make sense for Netflix to try to compete head on.”
Do you think a gamble on an unproven series, albeit one with an impressive pedigree, is the right move for Netflix, or will this deal be looked back on as a costly blunder? Leave your opinion in the comments, Insiders.
(via Home Media Magazine)
They will spend that kind of money for original content. But when it comes down to spending money to get current content. They act like they don’t won’t to do that.
Calculated gamble. Much like HBO’s decision to carry and produce original content.
The success depends on whether Netflix can find something unique–maybe even an interactive format.
If true a good bet by netflix management. They keep evolving which must annoy the sh*t out of the established players.
The irony of netflix paying ‘retail’ for content as opposed to the ‘wholesale’ they’ve been getting by buying from studios is duly noted. Bewkes must be pulling his hair out.
Agree, Netflix is evolving and good for them. Now I think Redbox needs to start evolving…. I’m thinking Redbox could continue on with the low cost $1 kiosk dvd rentals BUT also get it’s toes in the streaming business –only with a twist. Maybe take a clue from Groupon. Say if a certain number of Redbox customers agree on a certain day to sign up for a certain new release, the cost of streaming that one agreed- upon new release movie will be streamed to those customers for a low cost of $1 if watched within 24hours or so….Thinking, thinking….
Can’t wait to check it out, I love most HBO, AMC, etc stuff… Can’t wait to have one more show I can’t live without!!!
If it’s a prestige move it should be a success, but financially they’re not going to draw enough viewers to make it successful.
I have a hunch Netlfix will just be DirecTV on the internet, showing movies that are at least 6 mos old. Now Netflix wants you to watch shows rather than movies right? They will not be able to afford streaming new release movies. What is it again, $10/mos for all you can stream? A basic $30 Netflix seems likely. That and maybe new release movies will be vod, $2-$3 ppv, seperate from the rest of the site, again like DirecTV.
Zediva is the newest movie streaming movie company, apperantly they are what a streaming RB might be in the future. The DVD plays on thier end and streams the video to you. They are buying thier DVD’s at the real wholesale price to bypass the 28 day delay and guess what? They can’t charge $1 rental or the $10/month price. Zediva, charges $2 ppv. If you want to watch it again, it will cost $1 re-rental within 14 days. It’s a little bit cheaper than Vudu, though they don’t have as much content. It also seems they will rotate content much like the RB kiosks.
Hmm. Already a vote down huh.
Anyway. I was checking out Zediva and the $2 rental price is just a promotional offer right now. I smell $3 prices to be announced later on, mirroring the Facebook deal. Their dvdy by mail is made so you don’t want to use it. You pay shipping for it.