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Kayla Upadhyaya: Netflix's $100-million gamble

By Kayla Upadhyaya, Managing Arts Editor
Published February 11, 2013

Over the past couple weeks, I’ve been dividing my friends into two groups: those who have seen all of “House of Cards,” and those who haven’t.

Netflix’s latest attempt to break into the original content business, “House of Cards,” stars Kevin Spacey, and is created by David Fincher, setting it apart from the niche of lo-fi web series. In fact, the streaming company poured a sizable amount of capital into the project: $100 million for two 13-episode seasons. That’s not pet-project funding; it’s an investment.

And Netflix decided to go all in, releasing all 13 episodes at once instead of spacing them out over a traditional weekly schedule. In doing so, Netflix fully embraces the growing binge-watching trend, which emerged at the advent of TV on DVD and exploded once DVRs and online streaming services entered the picture. You can watch all of “The Sopranos” in a matter of weeks if you want. That’s pretty magical — if not insane.

“It doesn’t make sense for Netflix to be making its own content,” my housemate said when she walked in on me watching my fifth consecutive episode of “Cards.”

To a certain extent, she might be right. But, once upon a time, people said the same thing about the network then known as American Movie Classics. What business did a channel intended to bring film classics to your home television have making its own programming? In 2006, network president Ed Carroll started looking for a way to expand, leading to “Broken Trail,” a Western miniseries built with AMC’s audience in mind. “Broken Trail” wasn’t an overwhelming success, but it got AMC into the original content game, and now the network boasts “Mad Men” and “Breaking Bad” — two of the decade’s defining series.

Netflix is after the same kind of rebranding. As explained by its chief content officer Ted Sarandos in GQ, the ultimate goal is “to become HBO faster than HBO can become us.”

Cable is the reason we’re living in what many call the “Golden Age of television.” Due to basic economics, the film industry has become increasingly reliant on franchises. Sony didn’t reboot the “Spider-Man” franchise so quickly to redeem the many missteps of “Spider-Man 3”; it just needed to hold the rights to the character, and releasing an undercooked retcon was all it took. The only explanation you’ll ever get for this year’s “Fast & Furious 6” has Ben Franklin’s face plastered all over it. As the box office melted into an amalgamation of sequels, prequels, reboots and reimaginations, television became the true center for entertainment innovation.

That’s not to say that the television industry isn’t similarly guided by where the money is, but in recent years — especially with the introduction of pay-cable — TV has consistently remained in the business of storytelling. With its distinct set of properties, HBO spurred innovation on TV: Because the network makes the same amount of money whether its subscribers tune in or not, it could take on niche programming that didn’t have to pull huge numbers. The starting point of TV’s Golden Age varies depending on whom you’re talking to, but most go with “The Sopranos” or its lesser-known predecessor “Oz,” both of which belong to the HBO arsenal of critically acclaimed masterpieces.

The other two premium channels, Starz and Showtime, followed suit. And while basic cable networks like FX and AMC continue to rely on advertising and ratings, they still allow for a whole lot of creative freedom. With “Mad Men,” AMC proved that you don’t necessarily need a huge audience to keep a show afloat: You just need an intensely captive one.

And yet, cable is a slowly dying industry. Sure, its business model has led to a surge in high-quality content as networks vie for viewer loyalty, and the number of cable users who pull the plug on their services is relatively low, but it’s getting harder and harder to hook new users. How many friends do you have with cable?