retail news in context, analysis with attitude

by Kevin Coupe

Here on MNB, I've been using Netflix as a classic example of a business that has consistently challenged conventional thinking as it has expanded its model. Almost from the beginning, when it was just a company that undermined Blockbuster's value proposition and pricing policy by shipping DVDs by mail and charging monthly subscription fees rather than per-movie fees, it defined itself as being in the entertainment business, not the DVD rental business. Which is why it has been shifting to streaming video as the technology and consumer trends moved in that direction (though it actually got ahead of the wave at one point, creating some distress on Wall Street), and more recently has gotten into what essentially is private label.

The theory at Netflix has been that to create a sustainable business model, it could not define itself only as competing with Redbox and the now-departed Blockbuster. Rather, it needed to compete with the broadcast networks and even HBO. The theory has proved out - Netflix now has more subscribers than HBO.

Among the more prominent of its private label offerings has been "House of Cards" the politics-themed TV series based on a British series of the same name, starring Kevin Spacey and Robin Wright, and developed by David Fincher (The Social Network, Fight Club) and Beau Willimon (The Ides of March). And when the series debuted last year, Netflix played to the "binge viewing" predilections of its audience (well documented because it was able to track the viewing habits of its users) by releasing all 13 episodes at once. Viewers could watch them all in one sitting, or one episode a day, or one a week, or however they wanted - because they, rather than the network, controlled the experience.

"House of Cards" returns for a second season next Friday, February 14. The release pattern is the same - all 13 episodes will be available for streaming at the same time.

And here's the Eye-Opening good news. Netflix has announced that it will produce a third series of 13 episodes of "House of Cards," probably to be released next year.

BTW … this month, Amazon is scheduled to continue its strategic approach to creating differentiated content by making pilot episodes of two series available for viewing on its site, promising to produce more if viewer support warrants it. Unlike the first time around, when the shows were all comedies, these will be dramas - "Bosch," based on the detective novels written by Michael Connelly, and "The After," written and directed by Chris Carter of "The X-Files" fame.
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