Industry Report: Distribution and exhibition
Online streaming websites becoming producers of their own contents
by Emma Vigand
- The new series House of Cards has just been released on Netflix on February 1st. The DVD rental and online streaming giant is not the only one which is taking the plunge into making their own productions.
Netflix was born in 1997. It was first a simple shipping DVD rental company. It is only later that Netflix bet on the online streaming system. It costs now 16 dollars (12 euros) per month to have a subscription for unlimited DVD rental and online streaming. They invested into the new technologies long before all the main American networks, cable channels and their web competitors as Amazon. They have now 33 million subscribers and the biggest internet traffic in the United States.
Netflix is now taking a turn because for the first time they invest into their own production. The streaming website has always been dependent on the others channels to buy and to rebroadcast their contents. Victim of their own success, it was getting harder to negotiate with the big networks.
From now on, Netflix is an even bigger threat to the traditional networks. Since February 1st the series House of Cards is available only on Netflix. The online streaming website outbid HBO and AMC in the purchase of this series. The story is about an American politician who is working his way to the top, with Kevin Spacey as main character and David Fincher as director of the first two episodes. Netflix released straight away all of the 13 episodes on the website instead of putting one episode each week as usual. This shows that they also adapt better to the way people consume media nowadays.
Netflix is now expanding as well. They have already announced that they want to set up in Europe. The only problem is that the media chronology in the United States is very different from Europe. In France, movies can be released on video on demand after 36 months whereas it takes less than a year in the United States. However, there are some ways to get around the system and there already are some websites explaining how to create a Netflix account even in Europe.
The expansion is therefore on hold, but Netflix is getting even bigger in the United States. Reed Hastings, the CEO of Netflix, said that he wants to multiply by three the number of subscribers in the United States to reach the 90 millions. But the competitors are getting themselves organised as well. The streaming website Hulu has released four original series in the past two years and has announced three new ones for 2013. The online sales company Amazon is also setting to work and is now producing 11 pilots, from comedies to kid shows. All these companies which were dependent on the big American networks are now slowly catching up. However Netflix made clear that it is doubtful that their investments in original production reach the ones of the big networks. They estimate to make 200 to 300 millions of dollars this year. This sum is half of the budget in programme planning for HBO and Showtime.