5 ms·

That becomes the question. The problem is that their current production slate indicates that they maybe have one -- maybe two -- standout shows to do a year. HB

That becomes the question. The problem is that their current production slate indicates that they maybe have one -- maybe two -- standout shows to do a year. HBO typically has 4 (right now that would be Game of Thrones, Girls, Boardwalk Empire and True Blood with The Newsroom being an easy slot for #5). Right now, Netflix's original programming track record is really spotty aside from House of Cards -- which is absolutely HBO quality and would likely have been an HBO show if Netflix hadn't outbid by such an absurd amount (granted it was the right strategy to make but I get why HBO didn't match)). Aside from Arrested Development, however, nothing on their current slate looks like it will rise above Starz quality. And that's a problem if you expect people to consistently pay $8 a month.

thezilch 14y ago
I'm pretty sure people consistently pay $8/mon, despite the original content. You literally need only stay out of my way, be easy to use on multiple devices, and only entertain me 2-4hrs/mon to keep me coming back.
- filmgirlcw 14y ago
  No, by consistently I mean without churn. See, what happens with Netflix, HBO, Showtime -- even regular cable -- is that subscriber churn happens. It's often cyclical. One of the reasons HBO staggers its release schedule for its programming is to try to get people to pay year-round (it's also why they introduced HBO Go -- in essence they gave up their home video revenue, or greatly limited it -- in exchange for keeping people subscribed year-round because of all the content they could get anytime). Netflix's own figures show that they can jump and fall by the millions per quarter. If you want people to continue to subscribe every month -- and not cancel after they see the show they like -- you have to have a constant swath of new and original programming.
  - thezilch 14y ago
    I'm sure Netflix has churn; I'm sure they have clients that turn the service on for only a few months of the year; I'm NOT sure that is the majority, which is what I assumed you and I were referencing when quoting "people." I'd literally pay 3-4x as much for the non-original content. Again, that is only 6-16hrs of content Netflix has to serve up, that is only remotely interesting. The convenience and paying for the business model I believe in does the rest. If HBO offered its service unencumbered of cable subscriptions, I'd still find it less valuable than Netflix.
    - sharkweek 14y ago
      I don't even think the 8 bucks a month savings would ever be worth the hassle to subscribe/unsubscribe on any regular basis. That's a brilliant pricing structure; one I never pay any attention to. They easily could get more out of me a month for the amount of value I get from it (and likely even more than that number if the quality of their unique content continues to shine).
      - lostlogin 14y ago
        This so very much. I find myself looking at software services, and apps, and saying $10? No way. But I'll buy a coffee or 2 a day without blinking. What's wrong with me/people? Why is stuff that's not physical so worthless?
  - kevinconroy 14y ago
    Even originally programming won't stop churn entirely. The originally programming is meant to pull in new subs and keep current subs engaged at higher levels so that they are less likely to churn. If you want to cancel your subscription for whatever reason already, it may not matter if they have 100 original series, you'll still cancel. It's all about increasing the lifetime value of each subscriber. One way is to keep them longer (e.g. reduce churn). The other is to upsell them to higher pricing tiers. We're not seeing that with the original content (yet), but what if Netflix managed to (for sake of discussion) get the rights to Firefly and made another season of it but only for people who signed up for a new "Premium Streaming" package. You'd see some complaints, but a slew of "Shut up and take my money" memes. I don't know if they'll ever do this, but it's the next logical step once they've established the original content as desirable.
    - tracker1 14y ago
      You know what keeps me as a Netflix customer was how easy it was to cancel. A few years back, before online streaming, I just wasn't keeping up with the disks.. so I decided to cancel. No phone queue for an hour, no muss, no fuss, just cancelled online. I seem to remember getting maybe one email a month, not two or more a week... And when they added the online streaming, I came back. I only use it a couple times a month, I find it hard to actually browse their catalog, but they do an okay job of suggestions. And I can usually find something interesting in a pinch. Most of all, I'm paying to keep them around, because of how good the experience was when I did cancel. Contrast this to XM, when I had 3 radios, and only wanted to cancel one. Took three phone calls, with hold times of over 40 min each, to be mysteriously disconnected when they couldn't convince me to keep service on a radio in a car I no longer had. After that, I cancelled the whole thing.
chatmasta 14y ago
But what's stopping Netflix from replicating this success? To what extent is the success of HBO purely a function of the capital they invest? i.e. what non-financial assets does HBO provide that contribute to the success of its shows? What does HBO bring to the table that Netflix can't?
- MatthewPhillips 14y ago
  HBO is already a premium brand, Netflix is not. Although nothing is stopping from Netflix from becoming one, getting over that hump is not easy.
  - filmgirlcw 14y ago
    Excellent point - I was going to add brand to my above reply but didn't in the interest of time (and because I'd probably attribute brand to experience). HBO has a quality seal of approval that has taken 15 years to cultivate. That can't be bought or earned overnight from one show. HBO consistently gets more Emmy nominations than every other network -- once Netflix is able to counter in that area, then it will happen. Still, getting over the hump can happen. Look at AMC. Before Mad Men and The Walking Dead, they were best known for the terrible original series Remember WENN (don't ask, it sucked and I was in 7th grade when it premiered). Now it's easily one of the best networks on TV. Same for FX. Justified, Always Sunny, Sons of Anarchy, Archer, The Americans are all fantastic and this was a brand that was best-known for playing Fox reruns until about 7 years ago.
    - philwelch 14y ago
      Here's the thing--I didn't even know, until your comment, what channel Archer was on because I watch it on Netflix. That's what HBO is looking out for.
      - filmgirlcw 14y ago
        Right, but the thing is, licensing Archer for Netflix is a fraction of what it costs to actually MAKE the show. That's the challenge.
jebblue 14y ago
Netflix just needs movies, we haven't watched HBO since the 80s'. Their programming was never why we watched anyway. It's all about the movies. If I want original programming, and we do, we watch the education channels, in HD, free OTA.
- mbell 14y ago
  As a counter point, I honestly see 'movies' somewhat dying out. Shows like Game of Thrones, House of Cards and several others now have the same production quality as movies and aren't hamstrung by the same limitations. e.g. how do you tell a deep story in 2 hours?
  - jimbobimbo 14y ago
    There're plenty of movies that manage to tell deep stories in 1.5 hours. Netflix is a treasure trove when it comes to quality entertainment.
    - __david__ 14y ago
      Depends on what your definition of "deep" is. Have you watched Game of Thrones? The story is very complicated and I can't imagine a 2 hour movie being made out of it without dropping a lot of story on the floor.
      - legitsource 14y ago
        You couldn't really make it work in 5 or 6 2-hour movies. There is much more material in ASOIAF than there is in Harry Potter or something similar, and they had to split that into almost 10 full length movies.
  - dagw 14y ago
    For what it's worth I consider the so called 'limitations' of movies their greatest strength. TV shows, given an almost unlimited time budget, have a nasty tendency to ramble unfocused all over the place, telling 20 stories badly as opposed to 1 story well. With a movie you have to pare down and focus on what is really important and have a clear vision of what you're trying to say. To my taste this almost always leads to a much better story.
gamble 14y ago
Hemlock Grove is also excellent. But the point isn't to make money on these shows. Netflix knows that once people sign up, they're unlikely to drop their subscription. At the moment, Netflix is known as a place to get older movies and last season's TV shows. They want to change that perception with some must-watch shows that entice people to sign up. Netflix itself is more than worth $8 per month even without original content, but they need people to sign up before they can see that.
anigbrowl 14y ago
I sub to Netflix to watch movies; I would like it if there was a wider variety on their streaming offerings but it's slowly and consistently improving. Original programming is gravy - although it's increasingly tasty gravy. HBO's been doing this for ages, whereas this is pretty new territory for Netflix. I think they're doing fine.

thezilch 14y ago

I'm pretty sure people consistently pay $8/mon, despite the original content. You literally need only stay out of my way, be easy to use on multiple devices, and only entertain me 2-4hrs/mon to keep me coming back.

filmgirlcw 14y ago
No, by consistently I mean without churn. See, what happens with Netflix, HBO, Showtime -- even regular cable -- is that subscriber churn happens. It's often cyclical. One of the reasons HBO staggers its release schedule for its programming is to try to get people to pay year-round (it's also why they introduced HBO Go -- in essence they gave up their home video revenue, or greatly limited it -- in exchange for keeping people subscribed year-round because of all the content they could get anytime). Netflix's own figures show that they can jump and fall by the millions per quarter. If you want people to continue to subscribe every month -- and not cancel after they see the show they like -- you have to have a constant swath of new and original programming.
- thezilch 14y ago
  I'm sure Netflix has churn; I'm sure they have clients that turn the service on for only a few months of the year; I'm NOT sure that is the majority, which is what I assumed you and I were referencing when quoting "people." I'd literally pay 3-4x as much for the non-original content. Again, that is only 6-16hrs of content Netflix has to serve up, that is only remotely interesting. The convenience and paying for the business model I believe in does the rest. If HBO offered its service unencumbered of cable subscriptions, I'd still find it less valuable than Netflix.
  - sharkweek 14y ago
    I don't even think the 8 bucks a month savings would ever be worth the hassle to subscribe/unsubscribe on any regular basis. That's a brilliant pricing structure; one I never pay any attention to. They easily could get more out of me a month for the amount of value I get from it (and likely even more than that number if the quality of their unique content continues to shine).
    - lostlogin 14y ago
      This so very much. I find myself looking at software services, and apps, and saying $10? No way. But I'll buy a coffee or 2 a day without blinking. What's wrong with me/people? Why is stuff that's not physical so worthless?
- kevinconroy 14y ago
  Even originally programming won't stop churn entirely. The originally programming is meant to pull in new subs and keep current subs engaged at higher levels so that they are less likely to churn. If you want to cancel your subscription for whatever reason already, it may not matter if they have 100 original series, you'll still cancel. It's all about increasing the lifetime value of each subscriber. One way is to keep them longer (e.g. reduce churn). The other is to upsell them to higher pricing tiers. We're not seeing that with the original content (yet), but what if Netflix managed to (for sake of discussion) get the rights to Firefly and made another season of it but only for people who signed up for a new "Premium Streaming" package. You'd see some complaints, but a slew of "Shut up and take my money" memes. I don't know if they'll ever do this, but it's the next logical step once they've established the original content as desirable.
  - tracker1 14y ago
    You know what keeps me as a Netflix customer was how easy it was to cancel. A few years back, before online streaming, I just wasn't keeping up with the disks.. so I decided to cancel. No phone queue for an hour, no muss, no fuss, just cancelled online. I seem to remember getting maybe one email a month, not two or more a week... And when they added the online streaming, I came back. I only use it a couple times a month, I find it hard to actually browse their catalog, but they do an okay job of suggestions. And I can usually find something interesting in a pinch. Most of all, I'm paying to keep them around, because of how good the experience was when I did cancel. Contrast this to XM, when I had 3 radios, and only wanted to cancel one. Took three phone calls, with hold times of over 40 min each, to be mysteriously disconnected when they couldn't convince me to keep service on a radio in a car I no longer had. After that, I cancelled the whole thing.

chatmasta 14y ago

But what's stopping Netflix from replicating this success? To what extent is the success of HBO purely a function of the capital they invest? i.e. what non-financial assets does HBO provide that contribute to the success of its shows? What does HBO bring to the table that Netflix can't?

MatthewPhillips 14y ago
HBO is already a premium brand, Netflix is not. Although nothing is stopping from Netflix from becoming one, getting over that hump is not easy.
- filmgirlcw 14y ago
  Excellent point - I was going to add brand to my above reply but didn't in the interest of time (and because I'd probably attribute brand to experience). HBO has a quality seal of approval that has taken 15 years to cultivate. That can't be bought or earned overnight from one show. HBO consistently gets more Emmy nominations than every other network -- once Netflix is able to counter in that area, then it will happen. Still, getting over the hump can happen. Look at AMC. Before Mad Men and The Walking Dead, they were best known for the terrible original series Remember WENN (don't ask, it sucked and I was in 7th grade when it premiered). Now it's easily one of the best networks on TV. Same for FX. Justified, Always Sunny, Sons of Anarchy, Archer, The Americans are all fantastic and this was a brand that was best-known for playing Fox reruns until about 7 years ago.
  - philwelch 14y ago
    Here's the thing--I didn't even know, until your comment, what channel Archer was on because I watch it on Netflix. That's what HBO is looking out for.
    - filmgirlcw 14y ago
      Right, but the thing is, licensing Archer for Netflix is a fraction of what it costs to actually MAKE the show. That's the challenge.

jebblue 14y ago

Netflix just needs movies, we haven't watched HBO since the 80s'. Their programming was never why we watched anyway. It's all about the movies. If I want original programming, and we do, we watch the education channels, in HD, free OTA.

mbell 14y ago
As a counter point, I honestly see 'movies' somewhat dying out. Shows like Game of Thrones, House of Cards and several others now have the same production quality as movies and aren't hamstrung by the same limitations. e.g. how do you tell a deep story in 2 hours?
- jimbobimbo 14y ago
  There're plenty of movies that manage to tell deep stories in 1.5 hours. Netflix is a treasure trove when it comes to quality entertainment.
  - __david__ 14y ago
    Depends on what your definition of "deep" is. Have you watched Game of Thrones? The story is very complicated and I can't imagine a 2 hour movie being made out of it without dropping a lot of story on the floor.
    - legitsource 14y ago
      You couldn't really make it work in 5 or 6 2-hour movies. There is much more material in ASOIAF than there is in Harry Potter or something similar, and they had to split that into almost 10 full length movies.
- dagw 14y ago
  For what it's worth I consider the so called 'limitations' of movies their greatest strength. TV shows, given an almost unlimited time budget, have a nasty tendency to ramble unfocused all over the place, telling 20 stories badly as opposed to 1 story well. With a movie you have to pare down and focus on what is really important and have a clear vision of what you're trying to say. To my taste this almost always leads to a much better story.

gamble 14y ago

Hemlock Grove is also excellent. But the point isn't to make money on these shows. Netflix knows that once people sign up, they're unlikely to drop their subscription. At the moment, Netflix is known as a place to get older movies and last season's TV shows. They want to change that perception with some must-watch shows that entice people to sign up. Netflix itself is more than worth $8 per month even without original content, but they need people to sign up before they can see that.

anigbrowl 14y ago

I sub to Netflix to watch movies; I would like it if there was a wider variety on their streaming offerings but it's slowly and consistently improving. Original programming is gravy - although it's increasingly tasty gravy. HBO's been doing this for ages, whereas this is pretty new territory for Netflix. I think they're doing fine.