09:09 PM on 02/09/13 
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chiefjordo's Avatar
I really enjoyed House of Cards. A lot. But the economics of Netflix making it really don't make sense to me... I can't really wrap my head around it. I think that something like what they did will eventually be more commonplace, but I can't really make sense of how they would be able to afford to do that with any regularity.
10:04 AM on 02/10/13 
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I'm not disputing that Netflix makes a lot of money or that they can't take financial risks. But one could argue that a 100 million dollar expense on House of Cards would need to lead to 100 million dollars of additional (beyond what would've subscribed) subscriptions or renewals just for that. Otherwise it's just another asset in the streaming library... but it's not, it's one that they paid 9 figures for.

I think it's awesome that they're able to take the risk. And I'm sure having original content, particularly well-received original content, has intangible brand effects that could indirectly lead to additional subscribers. But if there's not an increase/retention beyond expected that offsets those high costs, I just don't see how it's profitable for them to spend that much on one of hundreds of options for people.

I did read through a lot of that- interesting stuff, particularly the Q & A. One thing I had wondered when thinking of HoC was whether they'd be able to earn through DVDs, but the Q&A kinda implied that those rights are owned by a different party.

Edit: I actually just considered the fact that, by releasing it all at once, they are completely at odds with their "one month free trial". If someone wanted Netflix to binge HoC, they could easily do so in one month, and then leave, never paying a dime... Of course, they could get hooked to the service as a whole, but it just makes it weirder to me.

I'm sure they (Netflix) must believe that these original content investments are monetarily beneficial for them, whether directly or indirectly through brand image, but I just wish I understood. I am happy to just sit and enjoy the content, though, I'll say that much!

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