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3:47 am
Fri February 1, 2013

Netflix Moves Back Into Content Production With 'Cards'

Originally published on Tue February 12, 2013 11:26 am

Netflix customers will soon have a new option: Along with the company's usual offerings, viewers will be able to watch a new show called House of Cards, a political drama adapted from a British show, and starring Kevin Spacey. David Fincher (known for The Social Network and Seven) will direct the first two episodes. But what's new about House of Cards is that all 13 episodes will be available at once — and they were financed by Netflix itself.

Netflix actually started creating its own content several years ago, creating a film production and distribution arm called Red Envelope. "That was really to ingratiate themselves with the filmmaking community, especially the independent filmmaking community, but also to have some sort of original programming that wasn't too expensive," author Gina Keating tells NPR's Steve Inskeep. Keating's latest book is Netflixed: The Epic Battle for America's Eyeballs,

The company folded Red Envelope in 2008, but is now moving back into content production with House of Cards. Keating says Netflix's goals are a little different now. "This is a much bigger bet. It's a lot more expensive; it is going to hit their bottom line in terms of cost," she says, "and the objective here is to sign up subscribers — that's all it is. It's to bring people in the door, get them to see House of Cards, and then look around and see what else there is, and stick around." And at $100 million committed for two seasons, it is indeed a big bet.

Keating says House of Cards could revolutionize television production. "All of those episodes are going to be put up at once, so it could really subvert the traditional storyline telling, where you have multiple storylines that you need to carry out through different episodes."

With every episode available at once, House of Cards won't be appointment viewing. But, Keating says, that could work in Netflix's favor. "I don't think people enjoy appointment viewing any more. I think they still talk about the series that they want to see. They share — you know, I loved Weeds, I love whatever program they've been watching — and I think Netflix has an advantage that I don't think any other purveyor of content has, and that is 15 years of data on subscribers, not just on what they like, but also on how they use the service ... and they can program to that."

"They have a very powerful matching algorithm that underpins the way that your Netflix page works," she continues. "Everybody's Netflix page looks different based on what they've viewed in the past and liked. And then they can aggregate those communities to create audiences for content."

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Transcript

STEVE INSKEEP, HOST:

No matter what the broader economic numbers say, individual companies have a narrower focus. They want to find the business model that keeps them profitable in their slice of the fast-changing marketplace. Consider Netflix, a story in adaptation. By sending movies in the mail years ago, Netflix devastated traditional video stores. And then the video service moved online.

Now, this movie distributor is expanding production of its own programs. Today, Netflix debuts "House of Cards." It's a drama starring Kevin Spacey as a Southern politician in Washington. And the entire first season - 13 episodes - will be available at once. We talked about this with Gina Keating, who wrote a book about Netflix.

When did Netflix get the idea that in addition to distributing other people's content, they could begin creating their own?

GINA KEATING: They started that in - around 2004, 2005 with Red Envelope Productions. And that was, really, to ingratiate themselves with the filmmaking community, especially the independent filmmaking community; but also to have some sort of original programming that wasn't too expensive.

INSKEEP: So they didn't want to be known as a distributor of some kind of product. They wanted to be known as movie people.

KEATING: Exactly.

INSKEEP: And this has now expanded to the point where they have remade the famous British TV series "House of Cards." What is their objective now?

KEATING: It's a little different. This is a much bigger bet. It's a lot more expensive; it is going to hit their bottom line, in terms of cost. And the objective here is to sign up subscribers, and that's all it is. It's to bring people in the door - get them to see "House of Cards"; and then look around and see what else there is, and stick around.

INSKEEP: But you mentioned the cost. What does it cost to produce a TV series that includes Kevin Spacey?

KEATING: A hundred million dollars for two seasons, which is a very hefty price tag. But all of those episodes are going to be put up at once so it could really subvert the traditional storyline telling, where you have multiple storylines that you need to kind of carry out through different episodes. I mean, you can kind of make it however you want because viewers can watch them, really, in any order. So they're really revolutionizing a lot of things with "House of Cards."

INSKEEP: Although this also means - doesn't it? - there's not going to be appointment viewing. I'm not going to be eagerly waiting for the next episode of this, and talking with people about the next episode of this.

KEATING: No, but I think that really works in Netflix's favor, and very much against the cable companies and traditional broadcast. I don't think people enjoy appointment viewing anymore. I think that they still talk about the series that they want to see. They share - you know, I loved "Weeds," I loved - whatever program that they've been watching. And I think Netflix has an advantage that I don't think any other purveyor of content has, and that is 15 years of data on subscribers; not just on what they like but also on how they use the service, how they go on and off the service, what the lifecycle of the subscriber is. And they can program to that. So they have a lot of intuition about how subscribers are going to behave that I don't think any other movie company has.

INSKEEP: When you say they can program to that, do you mean that somewhere - the Netflix people would have you believe - they have done a lot of data-crunching on past subscribers and concluded there is a certain size audience for a certain kind of series that stars Kevin Spacey, and is based on a famous British TV program?

KEATING: That's exactly right. They have a very powerful matching algorithm that underpins the way that your Netflix page looks. Everybody's Netflix page looks differen, based on what they have viewed in the past and liked. And then they can aggregate those communities to create audiences for content. I mean, they did that with "Nip Tuck" and several other well-regarded but sort of scantily viewed series and really, brought them back. They really created audiences for a lot of content and now, they're doing it for themselves.

INSKEEP: Gina Keating is the author of "Netflixed: The Epic Battle For America's Eyeballs." Thanks very much.

KEATING: Thank you for having me.

(SOUNDBITE OF MUSIC)

INSKEEP: OK, so "House of Cards," all 13 episodes, debuts on Netflix today. Kevin Spacey plays a less-than-honorable congressman. Tomorrow on NPR's WEEKEND EDITION, Spacey talks about what drew him to that role.

KEVIN SPACEY: Regardless of the current status of the public's admiration or disgust with Congress or politics, politics has always been fertile ground for filmmakers.

INSKEEP: You can hear more from Kevin Spacey tomorrow, on NPR's WEEKEND EDITION.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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