Sunday, December 15, 2013

Netflix: Beyond the Binge

“History has shown that minor changes in viewing patterns can have enormous cultural spillovers”, said legal and Internet scholar Tim Wuwriting recently in The New Republic.

And much has been made of Netflix facilitating our new living room demonstration sport of binge watching, or consuming the equivalent of an entire season of programming in less than a week. But to me the larger question revolves around the availability of a combination of a self-serve platform and endlessly fascinating niche content. I couldn't be the only one watching things like a documentary from 2007 about middle aged oddball males who also happen to be rabid fans of 80s teen star Tiffany, or a docudrama from 2009 about bizarro 60s British music producer Joe Meek on Netflix, could I? In the past tracking down such things on VHS or DVD could be difficult, if not near impossible, but now such films get a chance to reach a larger audience and to have a longer life. From Netflix' perspective, no shelf space is being taken up, so the more the merrier, and from the filmmakers' perspective it's often a 'fourth window' license, so while the revenue stream may be thin, it's still revenue.

In this environment of nearly infinite choices what then, becomes of mass appeal products, mass markets, and mass tastes? Could programming once thought to be marginal or niche now have a chance to rise beyond cult status?  Or as Tim Wu put it in his New Republic article: “Netflix’s gambit…is to replace the traditional TV model with one dictated by the behaviors and values of the Internet generation…a culture united by shared tastes rather than arbitrary time slots…a strategy that runs counter to many of Hollywood’s most deep-seated hierarchies and norms.”

Fortunately, to help me think about such questions, I was able to attend a Q&A session the other week featuring a writer from the New York Times and a member of the creative team of House of Cards (hereinafter to be referred to as HoC). HoC, as you may know, is Netflix’ runaway hit, which recently made history by scoring 9 Emmy nominations and winning three, a first for a non-broadcast/online-only program.

Less fortunately, the event I attended was off the record, which means I won't be naming names, but rather conveying the spirit of the conversation that took place. For that reason I’ll refer to the House of Cards person simply as HoC and the interviewer simply as NYT. The topic for the talk was future of the television and online media industries, in this new environment characterized by such major shifts as shows not originating on television becoming huge hits, more than a billion hours of video being watched weekly on YouTube, and the very notions of what television, film, and video entertainment are constantly evolving. 

And the conversation went something like this....

HoC: For the last several years there has been little distinction between film and television, this really took hold with box sets about 10 years ago and definitions are now more arbitrary than ever. Is TV something that is ½ hour, once a week? If I make a 110 minute episode of House of Cards is it then a movie? Movies needed 3 reels because that’s what projectors were capable of. The floodgates are now open. Kids with digital devices in their hands don’t distinguish between a phone, a 65” screen in living room, or a laptop – they just care about the story and the characters. A story doesn’t know whether it’s TV or it’s film. Many TV shows are closer to novels than they are to TV. And at the end of the day who gives a f!@#. 

NYT: I have not owned a TV for 4 or 5 years; I remember watching HoC on my laptop and having that moment: this is coming into my computer, I can’t get this on a TV even if I had one. When you sat down to write it you knew it had to be episodic, needed to conform more or less to TV lengths…so how did you think about it? 

HoC: None of us had done TV before, so we saw it as a big experiment. We were not bound by conventions, and if anything we thought of it as a 13-hour movie. We had 2 seasons guaranteed up front – and that was extremely liberating. That meant I didn’t have to play the game of “arbitrary forced cliff hangers”, fighting the ratings game week by week, fighting for our survival; I could work on this as chapters in a larger story.

Sex and the City box set,
suitable for marathon viewing

With the advent of box sets in the early 2000’s -- HBO series such as Sex and the City, The Sopranos -- people started binge watching then; box sets were often gifts and people would watch the whole thing in a weekend. The behavior was there but the notion of ‘binge watching’ wasn’t yet developed. Things really took off when it became a one-click proposition to get a whole season of a show. 

NYT: 10 years ago Arrested Development’s 7 million viewers per week was considered a weak showing. It was on Fox and was considered “cancellation quality”. DVD box sets had just started to become a thing and it was perfect for that format. It’s not a coincidence that the show died on broadcast TV and is a hit on Netflix.

Arrested Development existed before the right medium for it did

HoC: And today Arrested Development’s TV numbers would be considered a massive hit.

NYT: My understanding on Netflix and original content is that Netflix doubled down on House of Cards vs. a 2 hour movie, because their data showed that what people wanted was shows like Breaking Bad, that they could dive into and watch at their own pace.

HoC: I didn’t get into The Sopranos until Season 4. I thought I was too cool for a faddish show and then I wanted to see everything; I got the box set and it was like consuming a Tolstoy novel in a week. But at the time it wasn’t a Eureka moment, like, “this is a whole new way of watching TV!”

Netflix responded to an organic phenomenon and said this is already happening, so why don’t we just deliver our product in a way that allows people to accelerate this behavior? A perfect way of watching and adapting to your consumer. It has nothing to do with creating the story. Except episodes and seasons matter less. Especially. as the international market has streaming services available.

NYT: How soon do you think that will happen, the breakdown of the format barriers?

HoC: It’s incremental. We’re playing around with ‘cheating’ within the hour-long format. There are so many legalities and infrastructure – copyright law, bandwidth. Netflix has been working on this for 10 years so it’s not surprising that didn’t get it right the first time. Once Google gets into the game even Netflix, with its $12 or $13B market cap, Google could buy all of the major studios in Hollywood with one check. And their data goes way beyond viewing habits. It will all be determined by these large Internet companies deciding when and how they want to get into this game. The question becomes to what extent will they partner with and /or purchase existing companies, so you may have competitors to Netflix, for example in Europe: LoveFilm  (Ed. Note: LoveFilm is owned by Amazon)

NYT: How do you feel about Amazon, Netflix, and other technology or distribution companies getting into content?

HoC: I think it’s great. It’s total chaos. And chaos is good for artists. It lets them exploit the cracks and crevices companies haven’t figured out yet. Look at independent filmmaking. It came to the fore in the late 60s when the studios were dying. That has since faded away. Do you think Apocalypse Now or The Godfather would ever be made by the big studios now? Not a chance.

But over time everything becomes institutionalized. And that’s the death of creation. I do think we’re seeing the death of brands when it comes to entertainment. You probably don’t even know what channel your favorite shows are on, because you DVR them, or get them on Netflix. And why exactly is Duck Dynasty on A&E, which stands for Arts & Entertainment? And does it even matter?

NYT: How do you gauge success now, it’s not as easy as the number of people that watched it, is it?

HoC: I would say it’s not. Look at [the HBO show] Girls. The numbers are meager.

NYT: I think the first airing of Girls gets something like 600,000 viewers, which ranks 157th or so. Over the course of the week it gets over a million. In an old network model it would have lasted about one episode before getting cancelled.

HoC: The goal now isn’t getting 20 million viewers, it’s hitting particular niches. When you start redefining what success is you also get to redefine what risks you’re willing to take.

NYT: The old model is to sell audiences to advertisers. Now, Netflix sells to me vs. networks, which sell [time]to advertisers, so I can watch for free.

HoC: But networks can’t just put their shows online. The infrastructure and partnerships aren’t there for, e.g, A&E to throw up all of Duck Dynasty online. But this doesn’t mean the networks are going to go away.

NYT: In the future won’t Netflix be better positioned?

HoC: I would say the TV and film industries appear to be learning the lessons the music industry did not.

NYT: HBO’s “To Go” service makes no sense to me. To use it online you have to subscribe to HBO on cable already.

HoC: And the recent tiff between Time Warner and CBS affiliates in Los Angeles and New York. The affiliates went off the air, they couldn’t agree on a price. The cable companies are regional monopolies. But monopolies shift over time. No one thought in 1912 that film would become the dominant art form of the 20th century. Chaplin was considered a clown. You paid a nickel to see him. Now we think of him as a genius. And video games make a billion dollars in a few days.

But the moment you start saying “in the good old days…”, you’ve lost. You’re out of the picture. There’s no way you can possibly be forward thinking or on the cusp. Let it go. It doesn’t matter. It’s not what it is any more. Nostalgia is the biggest waste of time. Things will never be the way they were. It’s far more exciting to flesh out a new way and say ‘now what’, ‘what could be’?

The best thing you could do if you’re interested in getting into the business of entertainment is think about what you do, what you want. The big companies are now interested in what consumers are doing, what their preferences are; it’s now viewer-driven. Start with yourself. That’s thinking like an innovator. Data tells you nothing in the land of entertainment’. Because it is irrational. It is the things within us that we don’t know are there.

This is the era of the craziest f’ing thing possibly working.


Bonus link! Click here to learn about how a team of researchers reverse-engineered Netflix' algorithms to reveal genres within genres within genres. And here for an infographic that breaks down the economics of Netflix' original programming.

Related Post: Podcasting; Art, Craft, or Reaching the Niches  

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