House of Cards has gotten a ton of attention lately for a few reasons:
- It’s an awesome show (though I haven’t seen it yet)
- All episodes were delivered at the same time (to satisfy binge viewers)
- It’s another major step for Netflix in delivering unique content to keep viewers locked into their model
Why is this model smart?
Content providers can use exclusive content to be valuable & differentiate themselves from competitors. Netflix has already done this with Lilyhammer. They’ve also continued tapping into "binge viewing" behavior in an organized way. Although it’s unclear what the biggest benefits of that behavior will be quite yet, they’re learning something valuable by being a first mover here.
People want access to content without restrictions and aside from being the only place to access it, Netflix’s distribution models is working for consumers with a “watch where you want, when you want" mindset.
What are the downsides of this model?
It’s really expensive and only works for top-quality content. Because its so expensive to do it this way (and therefore the costs of failure are high), it only works for top caliber content and therefore isn’t something that will be the only way things are done. It’s why “pilots" exist in TV - see if the audience likes it and then sink more money into it. Episodic content that follows this model also has a benefit of giving viewers a reason to come back to a service. In that sense I think we’ll see these models mix.
Piracy is still going to be a big issue. If you don’t subscribe to Netflix or the service, there’s no way to get the content except pirating it. That’s part of the reason Game of Thrones was pirated a ton (and consequently was so successful). Many of the dynamics in this post on the music industry could also apply to video content. We still haven’t seen a producer of content fully embrace the piracy engine to positive effect yet.
What does this all mean for the people playing this “game of thrones" in the content landscape?
The implications of all of this are good for startups - Americans watch over 5 hours a day of content and not all of it is that “top notch" stuff like House of Cards or Game of Thrones. Startups don’t need to unseat that “top value" content quite yet - they can let this game of thrones happen and focus more on the Torso of TV (read Suster’s post if you haven’t) and create a ton of value around providing meaningful context and discovery for the rest of the video landscape.