Netflix’s historic win

Netflix’s House of Cards is an Emmy award winner.

The made-for-internet hit drama scored a win at the 65th Annual Emmy Awards picking up the gong for Best Directing in a Drama Series. This is an historic occasion as it is the first time a Netflix web-only drama series has won an Emmy award. While commercial success will ultimately decide the viability of a television show (whether broadcast traditionally or only online), industry recognition in the form of an Emmy evidences that the age of internet-based television is truly upon us.

Consider this – the Hollywood industry has recognised a show commissioned by a company that in effect threatens the business model of those integrated Hollywood studios, broadcast networks and cable channels.

The Wall Street Journal in a recent article ‘For TV Shows, It’s a Seller’s Market‘ noted that broadcast networks are “mere participants in a mad scramble.” NBC Entertainment’s President Jennifer Salke confirmed this view, telling the WSJ that TV show creators:

“…are taking them [new shows] to Netflix, they are going to HBO, they are hitting every cable outlet.”

The effect of this new competition between US broadcast networks, cable channels and online is greater consumer choice.

The growth of online only TV shows such as House of Cards and Arrested Development for Netflix and a number of shows which are in development for Amazon reveal that these online broadcasters have now reached critical mass where they can wear the cost of developing and producing high quality TV shows (in particular drama and comedy series). For example, Netflix in July 2013 was reported as having 37.6 million streaming users worldwide, with 29.8 million of those in the US. The number of streaming subscribers in the US is predicted to surge past the 30 million mark by the end of September.

In Australia, we have yet to see the effect of online outlets producing exclusive content at the expense of broadcast and cable networks. For example, in Australia screening rights to both House of Cards and Arrested Development are held by Foxtel. The difficulty for organisations trying to develop mass market online only shows for the Australian market is the population and potential user base is not present. The economies of scale that US giants Netflix and Amazon achieve and enjoy are currently unlikely to be possible in Australia.

This means that development of online only shows for the Australian market is likely to be some time off. It appears that if Netflix or Hulu open an Australian service there might be scope for a locally developed online only drama or comedy series due to their ability to make the show available to an existing worldwide subscriber base. However, it is likely any such show would need an appeal wider than an Australian audience to make the project commercially feasible.

There is now a clear shift towards more quality drama and comedy across multiple platforms. While it is likely that broadcast and cable networks will continue to achieve the most eyeballs and advertising revenue in the short term, series such as Netflix’s $100 million House of Cards, evidences that a new horizon is upon us and traditional media must take steps to protect their existing market share. It seems the delivery of drama via a broadcast slot each week is slowly being replaced or complemented by series being made available online all at once, where the consumer can choose how to consume that series (eg. in a binge viewing session) on a device of their choosing.

Expect to see more online-only high quality drama and comedy content in near future and more awards ceremonies recognising such content.


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