The streaming service is putting an increasing emphasis on original shows
“The goal is to become HBO faster than HBO can become us,” Netflix chief content officer Ted Sarandos famously told GQ in 2013. Back then, no one, including Sarandos himself, knew whether anyone was actually interested in watching original shows made by the company that used to mail them DVDs.
Today, Netflix’s bet looks doubly smart—other tech companies like Amazon, Microsoft and AT&T are making similar investments in original programming, while television stalwarts like CBS, ESPN and, yes, HBO are planning to offer their popular shows to viewers who don’t want to buy a pricey television bundle. The once-separate worlds of “television” and “online video” are going to collide this year, so it’s no surprise Netflix is battening down the hatches with a big rollout of exclusive original shows.
In his quarterly letter to shareholders released Tuesday, Netflix CEO Reed Hastings wrote that the company is planning 320 hours of original programming this year, triple the amount Netflix released in 2014. In addition to third seasons of early standouts like House of Cards and Orange Is the New Black, Netflix will also debut new shows like Marvel’s Daredevil action series and the new Tina Fey-backed comedy Unbreakable Kimmy Schmidt.
This will be the year when Netflix-original shows transform from a novelty to an expectation among subscribers.
This rapid shift in focus isn’t just coming because Netflix execs suddenly crave becoming creative auteurs—it’s a shift necessary to sustain the company’s business model. Licensing costs have soared as content makers realized the value of streaming rights and deep-pocketed competitors like Amazon entered the market. At the same time, HBO and others offering stand-alone versions of their channels to cord-cutters will change what viewers expect of cheap subscription services.
Great premium, original content is more necessary than ever — but it’s harder than ever to get a hold of. No wonder Netflix is trying to bankroll the content itself.
Indeed, Netflix noted in its shareholder letter that its original shows have been some of the most cost-efficient in the company’s stable. “Our originals cost us less money, relative to our viewing metrics, than most of our licensed content, much of which is well known and created by the top studios,” the company wrote.
The only trouble with Netflix’s plan is ensuring all this content they’re rolling out is stuff people will actually enjoy watching. The company has cast House of Cards and Orange Is the New Black as hits without divulging how many people actually watched them. It’s trying to do the same with Marco Polo, even though many critics have panned the show (Netflix has shot back at critics by pointing out that the audience rating for Marco Polo on Rotten Tomatoes is nearly as high as that of Game of Thrones).
As the company’s older shows grow long in the tooth, Netflix will have to keep infusing its lineup with new, buzzy shows. That’s a challenge traditional cable networks have faced for decades, and one HBO in particular has been skilled at navigating. Can Netflix do the same? This is the year we find out.