retail news in context, analysis with attitude

by Kevin Coupe

There were all sorts of stories late last week about how Chelsea Handler, the host of "Chelsea Lately" on the E! Network and the only woman doing battle in the late night talk show wars, is leaving that network and will be launching an entirely new late night talk show on Netflix.

Except that it won't be at night. At least, not if you don't want to watch it then.

The move, the Wall Street Journal writes, "will test the online video service's ability to bring an old-style, live TV format to the on-demand Web generation. The show - which will debut in 2016, with episodes available for viewers to watch at any time - will feature Ms. Handler's commentary on topical entertainment and cultural issues, along with guest interviews … Netflix will likely release the talk show episodes in a different way than it has debuted its other original series, where it has released all the episodes at once to encourage 'binge viewing'."

In other words, just like the other late night shows. Except in an entirely different context, and likely with an entirely different set of expectations in terms of what will make it a success. Think of it as "House of Cards" meets Johnny Carson … a combination that appears to make no apparent sense, which likely is one of the things that appeals to Netflix about it.

Handler described the Netflix appeal this way: "I wanted to sit with the cool kids at lunch so I approached Netflix to make sure they were as cool as I thought they were."

Apparently, they were.

There is a piece of analysis in Variety that describes the Handler hiring by Netflix as "the most audacious move the TV industry has seen" since Netflix brought us "House of Cards," which challenged the way traditional networks release content by acknowledging - and catering to - the way people more and more like to consumer content.

The Variety piece continues:

"Why on earth are they even trying a talk show, which contradicts some of the most fundamental assumptions about the streaming service’s programming strategy?

The logic to its ballsy move is subject to interpretation, opening up some fascinating questions about Netflix’s future direction … From the beginning, Netflix chief content officer Ted Sarandos has been abundantly clear that what Netflix values most is a piece of content’s ability to continue attracting eyeballs long after its premiere. That’s why there isn’t a single episode in its vault of original and library content that isn’t at least semi-serialized storytelling. That’s why Netflix doesn’t care about ratings - because Netflix doesn’t care when you watch something.

"But the talk show represents the diametric opposite of the content Netflix has concentrated on to date. It is known to be the most perishable of TV formats. While cable has done some day-after syndication deals to repurpose broadcast late-night shows, there’s never been any kind of aftermarket for late-night content. The conventional wisdom is that no one wants to see monologue jokes about a headline from two days ago, or an interview with a celebrity tubthumping a movie that came out the previous weekend."

Variety suggests that there are two potential plays here.

"First, consider the possibility that Handler is just a detour. Fine, Netflix’s success has provided enough insulation in the event that taking a flier goes badly. But surely there’s a rationale for this particular flier … Netflix wants to be known to its audience and the creative community as a revolutionary upending our traditional notions of what TV is. It’s a smart tactic, though the actuality of its revolution-iciousness is questionable. To date, that brand positioning has rested largely on its audacious decision to provide all the episodes of a series at once. But the novelty of that will wear thin in time (and Netflix knows it was far from the first to introduce that behavior) … So Netflix has to do something to up the ante to earn its bona fides as a true innovator.  There’s no better way to do that than to take on what is inarguably TV’s hoariest, cliche-ridden format - the talk show - and put Netflix’s own distinctive stamp on it."

In other words, Handler's new show is less a programming decision than a marketing decision. (And, by the way, talk shows are among the cheapest programming that can be produced.)

But, there's another way to look at the deal:

"The other possibility is that she represents an honest-to-god turning point for the streaming service. The long tail may have always been a short-term strategy. Perhaps the Netflix brain trust has a vision for a second gear for original programming that it has barely hinted at to date, but Handler is the first glimpse at where it’s all going to go.

"At the end of the day, there’s one very simple metric for success that matters to Netflix: subscriber totals. And nowhere is it written that can only be increased with content that has equal drawing power whether it’s watched today or 10 years from now.

"But if that’s true, a talk show could be just the beginning of what programming is coming to Netflix. Maybe a newscast is next. Maybe something as insanely expensive as professional sports, like the soon-to-expire NBA TV rights, is under consideration. Maybe all this means that–gasp!–advertising is on the way!? Netflix execs have long denied interest in any of these things, but who knows?"

At this point, the MNB audience - largely made up of retailers and manufacturers in a wide variety of categories - may be reading this column and saying to themselves, We're not in the entertainment business. What the hell is Kevin doing bothering us with all this stuff on a Monday morning? After all, we have Amazon and Walmart to worry about. (Unless, of course, you happen to be Amazon or Walmart…in which case you have each other.)

My reason is simple. It is because Netflix is challenging the status quo, keeping people guessing, and yes, trying to disrupt the way business traditionally has been conducted.

And that fascinates me.

And it ought to fascinate you … or at least make you think and wonder how your traditional business model can be challenged by someone who doesn't give a damn about doing business the way it always has been done, or who has developed metrics for success that are not the same as yours.

Whatever happens … it is an Eye-Opener. And at the very least, stories like this demand that we all keep our eyes open.
KC's View: