The New Netflix Strategy: Gambling on House of Cards

NetflixGamblingOne week ago Netflix introduced its first original series, House of Cards. The series details the life and crimes of (fictional) US Congressman Francis Underwood and his wife Claire who runs a nonprofit. What is unique about the series is that the entire season–13 episodes–was released all at once. Netflix and streaming services like it have acclimated us to watching shows in bulk like this. Is the new model sustainable?

I hope so, and Atlantic Wire reporter Rebecca Greenfield thinks the answer is yes:

With Netflix spending a reported $100 million to produce two 13-episode seasons of House of Cards, they need 520,834 people to sign up for a $7.99 subscription for two years to break even. To do that five times every year, then, the streaming TV site would have to sign up more 2.6 million subscribers than they would have. That sounds daunting, but at the moment, Netflix has 33.3 million subscribers, so this is an increase of less than 10 percent on their current customer base. Of course, looking at Netflix’s past growth, that represents pretty reasonable growth for the company that saw 65 percent growth from 20 million to over 33 million world-wide streaming customers. Much of that growth, however, comes from new overseas markets. But, even in the U.S., from one year ago, Netflix saw about 13 percent streaming viewer growth jumping from 24 million to 27 million.

The five times per year figure comes from a plan that Netflix CEO Reid Hastings revealed in an interview with GQ. Paying for subscription television like this is not a new idea–it’s a similar business model to HBO. But Netflix seems to have the execution right, at least with this first foray.

Perhaps the biggest difference with convention television is that it doesn’t matter how many people watched House of Cards during its debut week. As Hastings said in a letter to investors two weeks ago:

Linear channels must aggregate a large audience at a given time of day and hope the show programmed will actually attract enough viewers despite this constraint. With Netflix, members can enjoy a show anytime, and over time, we can effectively put the right show in front of members based on their viewing habits. Thus we can spend less on marketing while generating higher viewership.

For linear TV, the fixed number of prime-time slots mean that only shows that hit it big and fast survive, thus requiring an extensive and expensive pilot system to keep on deck potential replacement shows. In contrast, Internet TV is an environment where smaller or quirkier shows can prosper because they can find a big enough audience over time. In baseball terms, linear TV only scores with home runs. We score with home runs too, but also with singles, doubles and triples.

Because of our unique strengths, we can commit to producing and publishing “books” rather than “chapters”, so the creators can concentrate on multi-episode story arcs, rather than pilots. Creators can work on episode 11 confident that viewers have recently enjoyed episodes 1 to 10. Creators can develop episodes that are not all exactly 22 or 44 minutes in length. The constraints of the linear TV grid will fall, one by one.

I look forward to seeing more of this strategy, and as I proceed with House of Cards you may even get a post on its politics.

Wednesday Nerd Fun: The Science of Batman

Batman is a particularly entertaining superhero because he is in some sense the most realistic. There’s no need for an alternate universe or an elaborately fictional back story: he’s a guy with a cause and enough money to acquire the tools he needs. This premise was violated by certain plot elements in The Dark Knight Rises (see here), but the basic believability of Batman remained.

It turns out that Scientific American has not one but two posts on the science of Batman. The first piece, from 2008, answers such questions as, “How long would Bruce Wayne have to train to become Batman?” and “How would Batman get enough rest?”

In the more recent post, Paul Zehr tackles questions like “Why are Joker and Bane so difficult to beat anyway?” and “What revisions to the Batsuit are needed to protect against… concussion and spinal cord injury?” If these thoughts keep you up at night, you might also be interested in Paul’s book, Becoming Batman.

Wednesday Nerd Fun: TV Writers Podcast

From June Thomas:

The format of the Nerdist Writers Panel is pretty straightforward. Host Ben Blacker, a writer with credits on Supah Ninjas and Supernatural, interviews TV writers—often in groups of three, but occasionally one-on-one—about how they broke into the business, their experiences working on various shows, and how different showrunners, writers rooms, and networks operate. The discussions are usually taped in front of an audience (the shows benefit nonprofit tutoring program 826LA), and attract an impressive array of guests, including Breaking Bad’s Vince Gilligan, Lost’s Damon Lindelof, Justified’s Graham Yost, and Community’s Dan Harmon. Blacker is a skilful interviewer who keeps the conversation moving, asks follow-ups when they’re needed, and doesn’t shy away from sensitive topics.

You can find the complete Writers Panel podcast archives at Nerdist or iTunes.

Wednesday Nerd Fun: Rock, Paper, Scissors, Lizard, Spock

Fans of The Big Bang Theory will already know about this variant on the traditional game, Rock-Paper-Scissors. Adding two new moves–“Lizard” and “Spock”–increases the number of possible combinations in a two-player game from three to 10 (assuming we do not care about who is the first or second player), which greatly decreases the chance of a tie. This is exactly the reasoning that Sheldon gives for using the extended version:

But do you know the real story behind the game? Karen Heyman shares the account of how engineer Sam Kass invented the game with his now-wife Karen Byrla when they were students at Carnegie-Mellon University.

For a pair of geeks, Spock’s Vulcan Salute was an obvious choice for an additional gesture. But what else could they use? At first they considered another geek favorite, a sock puppet, since it’s easy to mime. They quickly discarded it, because really, a sock against Spock? “We came up with a poisonous lizard,” says Kass, “Lizard Poisons Spock was the first of the new rules, and everything else kind of fell out from there.”

The expanded RPS turned out to serve a secondary role as a “Geek Test,” according to Kass. As he described the rules, he discovered the world is divided into our kind, and those who need to have “Paper Disproves Spock” explained to them.

Why five gestures? To quote Spock himself: “It’s logical.”

“So long as you have an odd number of hand signals, you can create a fully balanced graph where everything is beaten and beats the same number of things,” says Kass, “Four doesn’t work, because one will be unbalanced; but five works.”

It is a bit easier to understand the game from the following graphic:

Big Bang revisited the game again in the clip below, giving Kass credit for developing the game:

Now, there is a robot that beats humans at Rock-Paper-Scissors every time using high-speed vision. According to the Automaton blog, it’s too fast for players to tell that the robot is cheating. No word on whether the robot will be programmed to include Kass’s extended moves, but at least Sheldon’s dream of the singularity is one tiny step closer.