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Netflix Eyes Offbeat TV Programming

4 Oct, 2011 By: Erik Gruenwedel

CCO Ted Sarandos explains why streaming service captures member attention by licensing offbeat serialized dramas ignored by pay-TV competitors such as HBO, Showtime and Starz

Netflix is rolling out under-the-radar original third-party serialized television programs in an effort to upgrade its streaming portfolio and avoid costly bidding wars for license rights with entrenched pay-TV channels.

The Los Gatos, Calif.-based streaming service soon will offer episodes of “Lilyhammer,” about a former New York mobster who goes to Lillehammer, Norway, as part of a federal witness protection program. The Norwegian production stars Steven Van Zandt (“The Sopranos”). Another exclusive is “Borgia: Faith and Fear,” a French/German serialized drama that recounts the Borgia family’s rise to power and domination of the Vatican during the Renaissance.

As Netflix expands its streaming service internationally, its quest for higher quality serialized TV programming has put its subscription-based video on demand platform at odds with content holders despite a decline of the TV DVD and syndication markets.

In a Q&A session at MIPCOM in Cannes, France, Netflix CCO Ted Serandos said the typical audience for one-hour serialized TV programming is pay-TV channels such as HBO, Showtime and Starz — platforms he said that are least likely to license content to Netflix due to competing business models.

Sarandos said programs such as “Lilyhammer,” “Borgia: Faith and Fear,” and forthcoming “House of Cards” allows Netflix to compete for pay-TV channel viewers with original programming.

“The ability to zero in on people’s tastes [allows you to] overcome a lot of the preconceived prejudice around content that [is subtitled and not in English],” Sarandos said, adding that local and regional content can sometimes outdraw Hollywood fare.

“Hollywood to the world is a big business,” he said. “The world to the world is a bigger business.”

The CCO said he would have preferred not having an exclusive deal with DreamWorks Animation for future (and catalog) titles released in the pay-TV window beginning in 2013.

“My preference would be that we could re-craft these business models and share the windows a little bit more effectively,” Sarandos said, adding that he felt that consumers value license exclusivity less than distributors. He said exclusive pay-TV license agreements in the United States can run upwards of nine years and encumber other studios from producing innovative programming.

He said Netflix is challenged somewhat trying promote particular programming since its brand is known for being program-agnostic and focusing instead on optimizing user personalization when it comes entertainment. Netflix had a lot of success with the Starz series “Spartacus: Blood and Sand” since it was able to direct interested viewers to the program via its recommendation software, he noted.

“People don’t sit around the dinner table discussing how a movie was distributed,” Sarandos said. “They talk about whether they loved it or not. We think we can use the same [user] algorithms to launch a [TV] show very rapidly and put it into the hands of the people who will love it most. It is kind of the opposite of launching a [theatrical] movie.”

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