Netflix is not just the company that delivers programming to a hungry viewing audience; it has some thoughts about what the content should be as well.
What started as a company that sent movies you wanted straight to your home by mail, then began direct streaming video content, is now betting significant money that it can help shape how audiences connect with the content they want.
The company is taking on some aspects of a television broadcast network, including providing its own unique content.
"For the past two years, the Silicon Valley company has been making a major push into original programming, putting out an ambitious slate of shows that have cost Netflix, which had profits of $17 million in 2012, hundreds of millions of dollars. Because of the relative quality of some of those series, such as 'House of Cards' (a multiple Emmy winner) and 'Orange Is the New Black,' they’ve been widely interpreted as part of an attempt to become another HBO," writes Tim Wu in The New Republic.
"Because every episode of every show is made available to watch right away, they’re also seen as simply a new twist in on-demand viewing. But in fact the company has embarked upon a venture more radical than any before it. It may even be more radical than Netflix itself realizes," he said.
Wu says a "desire to be current is in some sense human nature," but in the case of television programming, it's really not necessary to have everyone follow the tradition of "event" programming where something airs in a specific time and you watch it or you have to view a recording later. He noted that Netflix CEO Reed Hastings has even shifted his own vocabulary when asked to describe the company. It's not a "tech start up," Wu noted, but a "network."
Wu thinks the company is making "calculated" gambles: "Whatever it calls itself, Netflix still has tech-company DNA; its game, in part, is data."
The company looks at how popular a celebrity is or a director is or both, and then analyzes the popularity of a type of film or show. It can then determine how big an audience whatever it produces might appeal to, Wu says: "And when you can do that, you don’t have to worry about pandering to, or offending, the masses."
He's not the only one paying attention to Netflix's strategy as it moves into a content creator role. CNN recently reported that for its first children's offering, Netflix was moving away from the release pattern it had used in the past. Fans of "House of Cards" were able to watch it all in a 13-episode weekend. For the children's series "Turbo: FAST," the plan is to release five episodes Christmas Eve," and release other batches of episodes — it calls them 'pods' — around future holidays," wrote CNN's Brian Stelter.
"Historically, we have said that original series will be released in ways that best support the story, so if it suits the show, it is always possible we could release in a different way," spokeswoman Karen Barragan told CNN.
Stelter noted that "other companies have been experimenting with release strategies as well. When Amazon's streaming service released its first original series last month, 'Alpha House,' it made the first three episodes available right away, and doled out the rest on a weekly basis."
Reuters just reported that Netflix, already available in 41 countries, "met with the French president's staff on Tuesday to discuss a possible launch of its streaming service in Europe's third-largest market, in what would be a blow to traditional television companies."
The article explained that "the service poses a challenge to traditional television companies that rely on advertising as well as pay-TV operators, and has been criticized by telecom companies for overloading their broadband networks with traffic."
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