House of Cards

What Netflix's Commission Really Means for TV



Lindsey Clay, managing director, Thinkbox challenges the assumption that House of Cards spells the end of linear TV.

You might have heard that the on-demand subscription service Netflix recently invested in a series of exclusive TV content in the shape of a re-make of the brilliant ‘House of Cards’. It made the entire series available at once online. A bit like a straight-to-DVD box set available to a limited audience.

This was a major marketing investment designed to attract more subscribers – how Netflix makes its money. There are no advertising opportunities around its ‘House of Cards’.

But, unfortunately/inevitably, some commentators have misinterpreted what this means for TV. The boring fact is that it means relatively little, but this hasn’t stopped some hitting the nuclear button on their keyboards and rattling off old-fashioned ‘TV apocalypse / revolution / imminent death’ pieces.

The thinking goes like this: ooh, you can watch an entire series in one go, must be bad news for scheduled TV and therefore TV advertising.

This thinking does much to fill a page, but little to shed any light on what has actually happened. The truth is far less interesting.

At the root of the forecasts of doom is a fundamental misunderstanding of human behaviour and the difference between on-demand TV and linear TV.

As on-demand viewing has gained popularity in recent years, linear viewing has simultaneously reached and remained at record heights. The two co-exist. In fact they co-habit, because there is an inter-dependency with each fuelling the other.

The reason they co-exist is that linear and on-demand TV fulfil different viewer needs. It is like cooking at home or ordering a takeaway. One isn’t going to kill the other.

We watch linear TV to share the live experience with others and, sometimes, because we don’t know what we want to watch and can’t motivate ourselves to search for something. The schedules are expertly and lovingly curated for us and remain the trusted first port of call. We watch on-demand to fit all our TV into our busy lives and to catch-up when we’ve missed things – or when an on-demand subscription to a service like Netflix is the only way to watch something. Linear is convivial, VOD is controllable, both are satisfying and together they are increasing the amount of TV people are watching. Neither is a threat to the other.

Netflix has refused to release viewing figures for ‘House of Cards’ (although the analysis here gives an indication). This is telling. It is also telling that they did not attempt to launch a brand new TV series. As Foster’s found out with Alan Partridge, it’s a much easier job remaking online TV when the property was first made famous and popular on linear TV.

The schedule is Netflix’s nemesis. It likes to talk about how it is changing TV as we know it and will free people from the schedule’s ‘managed dissatisfaction’. The trouble is that most people don’t want or need freeing from the schedules. Netflix might well know this in private. It certainly takes advantage of it: of all the new TV advertisers in 2012, no one invested more than Netflix, and it is selling the series to broadcasters so they can, er, schedule it and brands can advertise around it.

It remains to be seen how often Netflix – or other on-demand TV services – can afford to do this. Netflix is reported to have spent £65m for the rights and production of one series of House of Cards, which puts YouTube’s $100m to invest in original content into perspective. The UK broadcasters invested over £5 billion in quality content in 2012.

Thinkbox has no preference how people watch TV – on-demand or linear. We are as platform-neutral as TV itself. But we do have a preference for people knowing the facts about advertising and human behaviour. So please don’t fret about what Netflix portends. It was a marketing move, not a behavioural shift.

 

First appeared in http://marketingblogged.marketingmagazine.co.uk/

Image: Rex Images
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