Will Netflix cutting out the middle man lead more viewers to cut the cord?

Senior Television Writer
03.16.11 126 Comments


During the brief, glorious run of the catering comedy “Party Down,” I encountered very few people who actually watched the show on Starz. (Which is the reason the run was so brief, if glorious.) Most watched it via Netflix’s streaming video service. One person I met was even surprised to learn that “Party Down” was available anywhere but Netflix.

That’s an extreme case involving a microscopically-rated show, but the ubiquity of Netflix Instant – particularly for people who have Blu-Ray players, video game consoles or other devices that allow them to stream movies and TV shows directly to their TV sets – is becoming a real threat to the traditional TV business. Why bother spending a lot of money for a cable subscription – and/or why bother trying to watch any show live, with commercials – when there are thousands upon thousands of hours of fine shows available to stream on whatever schedule is most convenient for you?

The growth of Netflix, and the rise of both cheap TV downloads on iTunes and Amazon and ad-supported streaming sites like Hulu, have created a situation where you can watch many of the best shows on TV without actually needing cable – or even a TV. And that makes it easier and easier, particularly in these budget-conscious times, for people to “cut the cord” (to borrow the phrase most TV execs use to describe this phenomenon) and just use their computers and other devices to live an On Demand TV existence.

One of the things standing between Netflix and complete media domination is the idea that they’re a content distributor but not a content supplier. They make it possible to watch other people’s shows and movies, and with the exception of things like the Starz deal (where that channel’s shows become available on Netflix at the same time they’re airing on TV), most of their content is older stuff. (You can watch previous seasons of “The Office” on Netflix, but have to go to NBC, or an NBC-affiliated property like Hulu, to see the current season.)

And all of that may be about to change with the news that Netflix is negotiating to acquire its first big-budget first-run scripted series: “House of Cards,” adapted from a British miniseries and backed by Kevin Spacey, David Fincher and other big names. If the deal goes down – and isn’t, as the Wall Street Journal speculates, just a feint to get leverage in ongoing negotiations with traditional media companies – then it’s a potentially enormous move. Already, there are people who think of Netflix as no different from HBO back in the day: a place to watch favorite old movies and shows on a continual loop. But if they start producing their own shows that (unlike “Party Down”) really aren’t available anywhere else, then they become like HBO circa “The Sopranos”: a rich, restraint-free platform that doesn’t have to play by the rules of traditional television, provides added value for subscribers and one more reason for those subscribers to turn away from the networks.

And if this deal does go through, and “House of Cards” is successful, then it opens up the question of how many other shows can be made and successfully marketed outside traditional means. There’s obviously the question of promotion, where Netflix has a large subscriber base but not the history of marketing new content directly to them in the way that the broadcast networks or HBO have been able to do for so long. If Netflix were to go hardcore into original programming, I’d be curious to see how many of those shows would be able to rise above the clutter of the many pre-existing shows and movies on the service, and how many will just fall between the cracks. Remember those heady turn-of-the-millennium days when original web series were going to be the hot new thing until no one figured out how to bring a big enough audience along to pay for anything good?

So there are a lot of variables here, but the possibilities are fascinating. As Poniewozik noted in his own take on the story, for instance, Netflix producing its own shows might eliminate the problem of shows that don’t fit the brand of a particular network, an issue that was brought up after the failures this season of “Lone Star” and “Terriers.”

What I wonder most, though, is what will be the tipping point for most people before they’re willing to cut the cord and just let the Internet supply TV shows and movies for them. Cutting the cord is still a fairly small phenomenon, though it’s over-represented among the readership of a site like this. For those of you who ditched your cable, I’m curious what the Eureka moment was when you realized you could do it and not miss much. And for those of you who still get most of your TV the traditional way, what would you need in order to abandon cable, pull down the satellite dish, etc?

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