Online video providers are battling it out to find new methods in attracting viewers
and converting them into loyal subscribers. Netflix and Hulu are without a doubt the two most
prominent websites for watching TV series and movies. While other companies like YouTube
and Amazon contemplate a way to gain solid footing in the online video industry, Netflix and
Hulu are taking the first step by announcing their shift towards producing original content.
Developing their own shows is essential for the both Netflix and Hulu to survive, but
the two businesses are taking quite different approaches, gambling over which system will
trump the others. Netflix has outspent everyone else in Hollywood buying up TV and movie
content. On top of this massive expenditure the corporation lost 810,000 subscribers and nearly
$12 billion last fall after announcing a split between their original DVD by mail service and
video streaming service. The consumers’ roars of discontent were heard loud and clear, forcing
Netflix not to go through with their ill thought plan or risk losing more customers. Despite the
mistake Netflix knows they have to change or be left in the dust. Chief content officer Ted
Sarandos comments “I was becoming increasingly concerned that the people who were selling
to us wouldn’t want to sell to us for long”. Netflix’s contract with Starz (providing content from
Disney and Sony) recently expired and another one with Epix (Lionsgate, Paramount, MGM)
will come to an end in the fall. These contracts could be snatched up by rival companies, leaving
Netflix looking like just another middle man.
It’s for these reasons Netflix’s Ted Sarandos is having numerous meetings with
well known directors and producers, giving them the incentive and freedom to create shows that
will premiere exclusively on Netflix. Netflix’s first original series “Lilyhammer” has already
been released onto their website to mixed reviews, but to outshine the competition they’ll need
critically acclaimed content. Some of their most promising series to come include; David
Fincher’s House of Cards starring Kevin Spacey - which they’ve already invested $100 million -
Eli Roth’s Hemlock Grove – an adaptation of a werewolf horror novel, Orange Is the New Black
– a women’s prison comedy, and Arrested Development – a well known comedy which was
cancelled on FOX but later gained a large audience online. Netflix is aware of their inexperience
developing TV series and is therefore willing to give more creative freedom to the directors.
Because their shows don’t premiere on cable Netflix has the advantage of not being subject to
FCC regulations, and don’t have to worry about finding an ideal time slot. Another technique the
company plans on using is the ability to release all of the episodes of a series at once instead of
week by week. Director Eli Roth comments on how the internet has revolutionized the way
audiences watch shows. Viewers can experience a series at a much faster pace, and if the
producers feel they’ve made a massive mistake they can fix it online without any repercussions.
Roth remarked “Let’s say in Episode 3, there was one story segment that we were certain would
work, but the fans went crazy. Why the hell couldn’t we just pull it, re-edit it, and put it back up?
If there’s an editorial change we want to make, and we have data to show that people are turning
off at this point, we just recut it. There’s no reason you couldn’t do it. Think about that. There’s
no physical DVD to reproduce; there’s—nothing! It’s right there instantaneously. You want to
tweak something later, you just do it. Who cares?”
As Netflix gears up to modernize how series are experienced, Hulu aims to take a more
shotgun approach; developing series with more variety hoping to attract a large number of
demographics. They’ve already announced 10 original programs being developed including
Kevin Smith’s Spoilers – where he and audience members review new movies, Richard Linklater’s Up to Speed – a travelogue from the Dazed and Confused director, We Got Next
– a comedy about a men’s basketball club, and seven other very different shows. Content
executive Andy Forssell mentioned that they too are looking for quality content over quality.
Unlike traditional networks Hulu won’t have to worry about filling a set number of hours,
relieving much of the pressure on producers. One Hulu won’t allow in their programs is nudity.
Because they rely heavily on advertisers the company can’t get afford to get too racy. Other
rivals to Netflix and Hulu include Amazon and YouTube, late to the party, but eager to gain
some traction. Amazon is asking people from the general public to send in pilot scripts, after
which they will offer $10,000 to chosen writers if the series make it onto the websites instant
video service. YouTube, the worlds largest free video service, plans to carve out 100 subsidized
channels featuring “sports talk, family fare, self-help, and virtually everything else users expect
of the YouTube jungle.” The creators of the user generated content will then gain a portion of
Google’s advertising profit.
With access to broadband internet increasingly rapidly across America and worldwide,
and viewers having multiple options for where to watch their favorite shows, now is the time
for these companies to gain the upper hand during the video streaming gold rush. High quality
original programming seems to be the best answer, offering new ways for people to experience
TV online. Whether the current video goliaths triumph, or an underdog website discovers a better
formula for success, is a question to be answered over the coming months.
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