In an article today aptly titled “Why Everything You Know About Binge-Viewing Is Wrong,” Variety reports that streaming giant Netflix is re-evaluating its plans for releasing, or least for financing, its original content.
While Netflix says—although it will not give actual ratings—that the initial viewing rates for originals like “House of Cards” and “Orange is the New Black” were impressive, Netflix may not be able to continue financing these series as it has been. In financial reports, Netflix execs have expressed worry over the sustainability of that model because it requires Netflix to pay for a series’ entire season in one lump sum, whereas networks amortize those costs over months.
In this way, Netflix may have to start looking at the traditional on-air programming tradition of releasing episodes once per week, although Netflix would retain the flexibility to release episodes more often. Variety says it best: “How’s that for irony: Netflix, which fancies itself a revolutionary in the TV business, may be forced to bring itself in line with traditional industry bean-counting precisely because of its boldest practice.”
And while the binge-viewing phenomenon is certainly not going away, Netflix’s worries are valid concerns in today’s TV environment where viewers may want all of the content now, but then never watch it again. The cost effectiveness of that plan is starting to show its cracks, forcing Netflix to look at new options for releasing its sought-after original content.
Read more about it at Variety.
Brief Take: Many processes in the TV business that no longer seem to make sense—such as premiering many shows all at once every fall—are dictated by financial constraints. Netflix is learning that even though it’s managed to be a significant disruptive force in the TV industry, playing with the big boys also means paying like them.
Tags: