/// Will Netflix, YouTube, Hulu Content Create a ‘Second Revolution’ in Television?
Forget broadcasting. Streaming services like Netflix think the next money to be made is in narrowcasting, a strategy that both mimics and challenges the television business model.
For those services, it may be just in time. On Tuesday, Netflix stock took a dive despite a profitable performance because of investor worries over the rising cost of licensing content. Following the model of premium cable like HBO and Showtime, Netflix and other streaming companies are instead drilling deeper into the market by making their own premium shows with A-list stars like Kevin Spacey and directors like David Fincher and Eli Roth.
Netflix is in the middle of “the evolution of being perceived as a distributor to being a programmer,” Ted Sarandos, Netflix’s chief content officer, said earlier this month at TheWrap’s annual media conference, TheGrill.
As more televisions are connected to the internet, barriers between the web and television are collapsing. Though the enthusiasm of viewers is not yet proven, that will potentially allow the likes of Hulu and Amazon to exponentially broaden their reach. Already, streaming companies have staked out a foothold in the new frontier:
>> Netflix, which first lured viewers with classic movies and kids’ television, will air six original shows next year, including the David Fincher political thriller “House of Cards” and new seasons of “Arrested Development.” The budgets (reported to be $100 million for “House of Cards) are big and so are the expectations.
>> Amazon has continued to develop Amazon Studios, which options scripts and is developing films via crowd-sourcing. It’s announced more than a dozen projects in development, among them a zombie film involving Clive Barker and an adaptation of the self-published novel “Seed.”
>> Hulu is flirting with its own in-house lineup, with series like the campaign dramedy “Battleground” and a talk show featuring Larry King.
>> YouTube has invested $100 million in original programming, with more money on the way. Nearly a year after it first announced an ambitious channels initiative, YouTube announced last week that it was doubling-down on its investment and backing new channels from the likes of Russell Simmons and Adam Carolla.
These digital companies are overhauling the way that consumers watch shows and broadening the definition of filmed entertainment. At the start of every season, Netflix releases all of a show’s episodes simultaneously. The move is a nod to the binge habits of its members, Netflix says, who prefer to see an entire season in a few sittings as opposed to tuning in for the latest episode at a particular time every week.
It’s also an acknowledgement to the longevity of shows on Netflix or Hulu, where viewers can watch them for years to come. That allows the companies to take long-term risks that a primetime-based network cannot.
YouTube’s experiment may be even more radical.