I had the opportunity of going to the first Cable Show that HBO showed their product at many years ago. In those days, the big networks were ABC, CBS and NBC. While cable was gaining as a TV delivery medium, most of the channels available were also available over the air. However, some channels were beginning to be created just for cable, such as the Food Network and HBO was proposing something very interesting at this time in what they called premium programming. This meant that along with paying for the cable feed, a user would need to subscribe to get their special HBO services, which in those days was just movies.
HBO popularized the premium channel concept and literally laid the groundwork for other premium programming. Now there are dozens of premium channels to subscribe to and well over 75% of the US households are cable subscribers today. In fact, in these passing years, cable companies have become the most powerful medium for video and TV content distribution and have become a big player in Hollywood and the movie industry.
At this cable show I got to meet with HBO execs that shared their vision of being the go to service to watch movies. While their early offerings were minimal they already had their sights on acquiring movie content from all over the world and establish themselves as the primary premium channel in the US. I remember distinctly them telling me that what they had was groundbreaking and could change the way people view TV content in the future. However, I am pretty sure that even in their dreams they did not envision a day when they would actually create original programming and become an actual television production company as well.
Industry Firsts
As the Emmy nominations approached last week, there was buzz in Hollywood and Silicon Valley that Netflix’s two shows that are now originally produced for them, Arrested Development and House of Cards, could become the first shows designed specifically for on-demand and over-the-air content distribution to receive an Emmy nomination. Up to now this has been the purview of dedicated production companies who created content just for the networks or the cable networks and an upstart like Netflix, with its OTA approach to content delivery was not supposed to have the skills or wherewithal to do anything other then just be a medium for OTA content delivery.
You have to give Netflix CEO Reed Hastings a lot of credit for the kind of visionary thinking that drove him to create original programming just for Netflix. It is ironic that less than two years ago he was considered evil because he split the subscription prices for mailed DVD’s and Online content into to separate services and industry execs and users alike complained to high heaven that this move was bad and unfair to their subscribers. But clearly Reed knew what a lot of us insiders knew that the days of DVD’s being mailed for viewing were numbered and delivering the same content OTA and on demand was the future of this type of content delivery.
With House of Cards and Arrested Development, Reed and Netflix has raised the stakes and as many insiders understand, OTA on demand services like Netflix, Hulu and others are really the future of many types of content delivery and with this move Netflix in essence has become the HBO of this new age. Of course, HBO has their own version of OTA services called HBO Go and more and more dedicated content providers are following suit with similar services since they all understand that OTA on demand on any device is the true future of content delivery. But Netflix’s leadership position at this time in history cannot be underestimated since Hasting’s has emerged as the elder statesman of OTA services and Netflix has to be perceived as a direct threat to the cable companies as the primary provider of TV and video content someday.
The Clear Future
With the Academy of Television Arts and Sciences Emmy nominations for House of Cards and Arrested Development, Netflix is now officially recognized by the TV industry and it confirms that they are a legitimate medium, capable of delivering original content through a brand new delivery system. I also believe it signals that the folks behind the Emmys actually understand that with these nominations they are actually giving their blessings to this new era where broadband delivery of Internet content and OTA services will be the norm and expect services like Netflix to be a part of the TV and movie industry framework from now on.
Regardless of whether House of Cards or Arrested Development actually win any Emmys, Netflix has already become a winner at this years show by nature of this giant endorsement of their labors and vindication that Netflix’s bet on creating original programming was on the money. This nod from Hollywood allows them to play with the big guns in the cable world and more importantly cements their position as the industry leader in providing OTA services that will eventually change the way most of us will receive our TV and video content in the future.
A side note: Over the weekend I got a chance to watch the first two episodes of House of Cards and now see why it received various Emmy nomination. Well scripted and acted, the story of Washington insiders is addictive and gives people a fascinating look at the inner workings in our nation’s capital. If you enjoyed West Wing, you will really love House of Cards.