Netflix wants to own your entertainment

According to Deadline Hollywood, Netflix has become a content creator (not just distributor) by outbidding HBO and AMC to underwrite the production of House of Cards, a 26-episode drama series directed by David Fincher. Deadline Hollywood says that the deal (probably worth more than $100 million) is for Netflix “probably the biggest gamble in its 14-year history” — and “could change the way people consume TV shows.” Here’s what Netflix gets out of becoming a content producer:

  • An opportunity to own the streaming entertainment experience. Netflix can exert more control over its product — not just streaming someone else’s movies but owning the creation, marketing, and distribution of its own entertainment. It’s as it iTunes became a record label.
  • New possibilities for pricing and bundling content. It will be interesting to see what kind of premium pricing and/or subscription incentives Netflix will bundle into the distribution of House of Cards.

The deal has its risks, too, not the least being Netflix’s two-year commitment to the drama series. If the series bombs, Netflix is stuck. By contrast, Netflix bears far less of a financial burden by sharing content created by someone else.

Another risk comes to the Netflix brand: a poorly received product will tarnish Netflix because the company has a stake in its creation. By contrast, we don’t blame Netflix when we rent a disappointing movie from its library as we know it today; we simply return the movie and try again, or stream something else.

Netflix has hedged its bets by investing into a project whose executive producer and director is the highly regarded David Fincher. Moreover, Kevin Spacey (whose work has been inconsistent in recent years) will star and executive produce.

You can expect more companies to act as publishers for one simple reason: thanks to the proliferation of self-publishing platforms like GoAnimate and YouTube, people have become their own content publishers and expect brands to follow their lead. In effect, Netflix isn’t breaking any ground here — the company is merely following the example set by you and me. But with a lot more risk and reward.

Brands get animated

The Wall Street Journal recently discussed the popularity of sites such as GoAnimate and Xtranormal, which make it possible for anyone to create an animated movie. The sites supply the animated characters; all you need to provide is a script that you can type in real time to generate a movie. The sites are becoming more popular as content creation platforms for both consumers and businesses (Geico being a notable example).

I waved the WSJ article at my 9-year-old daughter, and in no time we were creating a movie together — “Tour of a Space Shuttle” — on Xtranormal. The process is as easy as the site claims (“you type something; we make into a movie”). My daughter (using my account) really created the movie all by herself.

Obviously you don’t need to have a child at home to embrace these kinds of platforms — just the willingness to be as open minded as one.

I encourage any marketing executive to check out the article and find out what brands are doing to create more playful experiences (for little cost).