Author here. I don't disagree with you, especially in the second paragraph. To some degree I think it was smart for Netflix to make a big splash this early on. But the perception that they're "paying for quality" is a bit suspect, given that Hollywood itself -- ostensibly "paying for quality" in its entire process -- has a 98% failure rate on developing projects. Quality talent doesn't always yield a quality product in the creative business. Even the best writers, directors, producers, and actors have their failures. I have no reason to suspect Netflix was any smarter in its approach to developing House of Cards than networks would have been -- though I could be wrong (and hope I am).
At the end of the day, the $100M for HoC was a big bet. It was a signaling tactic, a marketing tactic, and a bet on top-tier talent. But it was a bet, nonetheless, and an expensive one. That it seems to have paid off (to an extent? jury is still out) shouldn't fool us into 20/20 hindsight bias. It could just easily have busted.
"So as I understand it, the author is suggesting that NetFlix produce a bunch of low-rent pilots (or half seasons or so) throw them against their wall of subscribers with a bit of recommendation-targeted magic, see what sticks, then spend the money to produce the "grown up" versions."
Not necessarily, and I should clarify here. I think pilots can be shot for a lot less than they are, and I think audiences are proving themselves quite receptive to previews and other short-form "pilot" systems as proofs of concept. A lot of movie trailers are increasingly being made before the movies even start shooting ("teaser" trailers). I think there are ways Netflix can take the guesswork out of the development process, even if production is still an expensive endeavor.
You have to pay for a quality product, but the system right now also pays heavily for the risk in the pre-production process. That process can probably be de-risked considerably.
I would not recommend testing 100 half-baked concepts to see what sticks. But I do think Netflix could test or tease concepts in development to determine which ones to develop, and/or how to present new shows to the right early adopters.
Something I probably wasn't as clear about as I could have been: half the battle in finding a hit is developing an audience, not just a show. Netflix has better audience-development capabilities at all stage of the production equation. It doesn't need to guess quite as much as networks do.
Maybe -- to your point -- Netflix's audience-segmenting capabilities give it the ability to play the big bets game more than networks can. But historically, people have been shockingly bad at predicting what will actually hit and what will miss. Star Wars was laughed out of every major movie studio in town, for instance, and at the script level, it sure didn't look like "quality" to the eyes of the execs reading it. On the other end of the spectrum, a show like Firefly -- which fans (including myself) consider one of the most brilliant things ever made, has repeatedly failed to gain mass appeal beyond its limited niche, despite many attempts at re-marketing home video, a feature film, etc. The operative lesson here is that "quality," as an objective concept, is hard to parse and hard to pin down. "Quality" is more of a function with a lot of variables, and many of the biggest variables are on the production side and the audience side -- not the development side.
Tldr: People are over-investing in development, when they could be investing more heavily in production -- whether at greater scale, or in greater depth per project.
The business model of Netflix is entirely different from broadcast TV. Netflix makes 0 additional marginal dollars from an existing subscriber watching an extra hour of video. What they care about is producing something "must see" for a particular niche that would convert a non-member into a paying member.
That means a rabid fan base and buzz is far more important than broad popularity. That's why shows like Arrested Development and Orange is the New Black have been so good for them, because they have an in built audience they can bring reliably.
I'd argue the opposite from you which is that Netflix is worse than traditional TV at developing audiences. For someone to adopt a new show on Netflix, they have to be interested in the show AND a subscriber of Netflix or so interested in the show it would compel them to subscribe to Netflix vs just switching over to the right channel at the right time to check it out.
Instead, Netflix's strength is in supporting a pre-existing audience.
"Netflix makes 0 additional marginal dollars from an existing subscriber watching an extra hour of video. What they care about is producing something "must see" for a particular niche that would convert a non-member into a paying member."
Netflix makes 0 marginal dollars on a hit show, but for Netflix, this isn't about the marginal dollar. This isn't even about adding more subscribers per se. This is an attempt to preserve subscribers in the face of a rapidly diminishing content library.
As I mentioned in the article, a lot of the networks and movie studios are raising their rates on Netflix, or pulling their libraries altogether. In the long run, Netflix risks becoming a "dumb pipes" commodity business, no more special or different from Amazon, iTunes, and all the rest, if it doesn't have something exclusive to keep viewers interested.
That's why they're betting the farm on original content. HoC won't appeal to everyone, but it signals to Hollywood and to tastemakers that Netflix is a serious buyer, and that it's in town to buy a lot more where that came from. Hollywood has a strong signaling / social proof system in place, and moves like this are often great ways to break the ice and establish credibility in a town that will shut up and listen to money. :)
"That means a rabid fan base and buzz is far more important than broad popularity. That's why shows like Arrested Development and Orange is the New Black have been so good for them, because they have an in built audience they can bring reliably."
Correct, and I don't see us in any disagreement here. This is what I mean about Netflix's home-field advantage in "audience development." Netflix knows its niches better than networks know theirs, and furthermore, it can afford to be in the niche game, because it's not dependent on mass advertisers. This is a significant advantage Netflix can draw upon.
I'm a perfect illustration with HoC. I dropped off Netflix Watch Instantly when they split it off as a separate item. I'd vaguely mulled hopping back on--Amazon on-demand really didn't have enough selection--but I wasn't a huge on-demand user so I never quite pulled the trigger. HoC got me to pull the trigger. And I'm still not a particularly heavy on-demand user but I'm not about to stress over whether I'm getting my money's worth now that I'm back on the service.
Yeah, I'd say Netflix has close to zero audience building ability, especially with the decision to release entire seasons at once. Building and audience 1) takes time, 2) benefits from shared experience and anticipation and 3) needs consistent promotion.
I want to believe you're on to something here, but how do you "tease" a show like "Mad Men" at low cost? The best tease for that show would be something like the incredible "Carousel" pitch from the end of Season 1[1], and indeed, a link to that from reddit was how I finally decided to check the show out a couple of years in. But that arose organically, after a ton of money had been spent on script, casting, production...
I'm not saying I have a fantastic answer, and I want to admit that. (I'd be a lot more successful right now if I did!)
I made some edits to my reply, and I think the answer I can best come up with is this: spend less money on development, and reallocate more of that money to production (either of more series in general, or on fewer and better series, or on licensing of exclusives from shows on other channels). Money in production seems to have better ROI, while money in development is a spin of the wheel.
Another thought: a lot of great shows get canned from the networks simply because advertisers don't grok them, or networks bungle the marketing and scheduling of them. Perhaps Netflix can get into the business of picking up these wasted opportunities? That seems to have been the operating logic behind its investment in Arrested Development, and I don't see why that model wouldn't work for other shows like it.
Small anecdote from personal experience: when I worked in development at NBC, we invested a ton of money into a high-profile Aaron Sorkin dramedy about life at a TV network. It was a fantastic script, by a confirmed creative genius with a track record ten miles long. As bets went, it was about as much of a sure thing as anybody had seen. That same year we spent a much smaller sum on a quirky workplace comedy about life at a network.
Of the two shows: Studio 60 lasted all of a season. 30 Rock ran for seven. As great a show as 30 Rock became, it wasn't all that great from the get go. A lot of the magic happened in production, with the hiring of a fantastic writing staff and the time to let the whole thing gel and find audience fit. I'm not sure what the operative lesson is from that experience. But it did teach me quite a bit about how you can't tell quality when you supposedly see it. Especially early on. :)
I didn't hate Studio 60 as much as others but, yeah, it should have been better.
>As great a show as 30 Rock became, it wasn't all that great from the get go. A lot of the magic happened in production, with the hiring of a fantastic writing staff and the time to let the whole thing gel and find audience fit.
I'm generally not very receptive to arguments along the lines of "OK, this show isn't great now but you owe it to the universe to give it six months" but I also don't really disagree. I confess to also liking 30 Rock but never quite putting it in the must see bucket. (In all fairness, I've really sort of gotten away from sitcoms period.) Certainly, I imagine we'd all like to see good shows get the opportunity to work out kinks rather than putting all the burden on one pilot.
I'm curious. Are there good examples of a really "knock them dead" pilot that didn't translate into a halfway decent show. Smith might be one possible candidate although I liked the show as a whole more than people in general apparently did.
[EDIT] Related question. For a relatively big budget show, how expensive is making a pilot relative to non-pilot development costs?
"I'm generally not very receptive to arguments along the lines of "OK, this show isn't great now but you owe it to the universe to give it six months" but I also don't really disagree."
That's not really the argument I was trying to make. I apologize if I wasn't clear enough! Usually my fault. Rather, what I was trying to say is that hindsight is 20/20, and at the outset, nobody at the network -- hell, nobody in Hollywood, including Tina Fey herself -- would have imagined that 30 Rock would outperform Studio 60. I was simply making a broad illustration of the difficulty of predicting winners, even based on (ostensible) quality of a script.
"Are there good examples of a really "knock them dead" pilot that didn't translate into a halfway decent show. Smith might be one possible candidate although I liked the show as a whole more than people in general apparently did."
There are some fantastic pilots that never even got made for various reasons. As for "best pilot that became a bad series," I think Studio 60 is up there. I'd also nominate The Sarah Connor Chronicles, a show with an ostensibly built-in fanbase and a great pilot that just ran out of places to go. Also, call me completely f'ing crazy, but I thought the pilot for SeaQuest DSV was really solid. The show itself? Kind of a massive, bloated embarrassment for all concerned (including Spielberg, one of the show's executive producers).
I'm sure there are plenty of others, but the problem is that -- as with most instances -- we suffer from a bit of a hindsight issue here. Also a bit of a selection bias. Because a lot of good-pilots-turned-crappy-series got canned after a few episodes, we don't remember them as much as we do the shows that lasted a season or longer.
"Related question. For a relatively big budget show, how expensive is making a pilot relative to non-pilot development costs?"
Pilots are usually more expensive than episodes of a show, for a number of reasons. The biggest reason is economies of scale. A running show has its scripts planned out in advance, a regular staff, a cast, and a series of continuously operating parts that reduce the marginal production cost of each episode over the course of a season. A pilot is more like making a small movie: you incur a lot of ad hoc and one-time costs to build something, and you gain no economies of scale. You set up the production, make the episode, then tear everything down and put the whole thing on pause until May.
Another big reason is talent costs. It's not uncommon to convince a prestigious film director or major actor to work on the pilot of a show to help sell it to advertisers and audiences. These folks won't stick around for the show itself, but spending money on them for pilots -- basically, as a form of insurance -- is an age-old tactic.
Thanks for the detailed reply. I didn't mean to imply anything about your argument specifically around "OK this show isn't great now..." More that it's just a general observation that (especially genre) fans have this expectation that audiences and networks have this sort of moral obligation to cut the show some slack and give it time to develop.
I won't violently disagree with any of your pilot examples. I thought all those were OK shows (especially Sarah Connor for as long as it ran--on a tangential topic, some shows would really just be better as 20 show or whatever runs) but I'll agree they didn't really ultimately live up to the promise of their pilots.
The latter seems like a solid idea, if the networks could be persuaded to part with their IP.
I suspect I'm not the expert on this that you are, but the latter could be a problem, particularly from a "career preservation" point of view at the networks. If Exec Bob's show is picked up by Netflix and turned around from a flop to a hit, that tends to imply some things about Exec Bob's management of said show that he might not want to risk being implied.
But in my experience, at least, once a network cancels a show, they're usually happy to let it go. Especially if it's been dead for a few years or more. And Exec Bob is likely to have switched jobs or moved up by then, anyhow. There's a ridiculous degree of fluidity in the "musical chairs" that is the creative executive career track.
Also: once a show has moved from development to air, the show changes stewardship from the Development department to the Current Programming department -- so there's a different executive in Bob's place now, who is responsible for the day-to-day operations of the show. Bob can absolve himself of responsibility if the show makes it to the air and then gets canceled. Bob is responsible if not enough shows make it to the air in the first place, or if not enough of his shows seem to last beyond a season, or find audiences.
In general, though, Bob is judged on his hits (or lack thereof) more than his misses. He's incentivized to take a lot of swings at bat in order to land a home run. Home runs can often be career-making, even if they were sometimes just luck of the dice.
Your argument applies even more to something like Breaking Bad or even the venerable Babylon 5. The strength of those offerings was the build-up over many seasons.
Ugh, and please let's not judge Star Trek TNG on its first season. Yikes!
I'd argue that Babylon 5 retained many of its flaws throughout its run even if, for me, the good aspects outweighed the bad. That said, the first part of its run was pretty weak as was TNG's. I doubt I'd have made it through as a non-genre casual viewer.
I'm going to sacrifice a lot of nerd points by saying this, but the pilot of Babylon 5 was so dreadfully unwatchable for me that I never got past it. I never tried another episode. Everyone I know tells me how much I'd love the show, but for the life of me, I'd rather watch paint dry than sit through another episode.
Perhaps this is a great example of a bad pilot that grew into a decent series?
I watched the whole series for the first time only a couple of years ago. I started it just because, as an old Amiga enthusiast, I remembered about that show from some article I had read years before on a magazine about 3D graphics.
The first two seasons were just OK, but after that something clicked, and the show became really engaging. With some loose ends, but it made me pleasantly waste much more time than I should have on it :)
Maybe I'll give it another shot. Deep Space Nine, launched around the same timeframe, had a similarly weak start. In retrospect, I'm not sure I'd have gotten into it -- or forgiven it some truly dreadful filler episodes -- had I not been pre-sold on Trek by years of TNG. DS9 found its footing around the end of Season 2 and got really good around Season 4 and beyond.
Maybe I owe it to myself to give B5 another go at some point.
Both B5 and DS9 were well worth watching. And both had pretty ehh pilots. (And I'm got going to even touch accusations that the similarities weren't coincidental :-))
I pretty much agree with your take on DS9 even though I ultimately think it became one of the better Trek series.
B5 continued to have some pretty clunky acting in some cases and low-rent special effects but, given your tastes expressed in other posts, you'd probably enjoy it. My only caveat would be that it's somewhat one of those "mystery" shows (run off to the discussions about what this revelation meant) and I'm not sure how well that translates to after-the-fact binge viewing.
I can handle "what did that actually mean?" types of shows, but only if the mystery had some internally logical consistency to it, i.e., it's not just a mindfuck for mindfuck's sake.
A good example would be early-series Lost: lots of interesting mysteries left open to interpretation, giving the impression of more to come, and of a consistent logic to the way things were going to unfold. Bad example would be late-series Lost: it became pretty obvious they'd written themselves into a corner about halfway through the series, so they started making up increasingly convoluted ways to tie it all together, eventually winding up, as far as I can tell, somewhere in the Dr. Who universe.
Is is it possible to jump in in season 3 when it starts getting good, or do you have to drag yourself though the first two seasons to get what's happening?
I wouldn't advise doing that because you would enjoy the later seasons much less without having developed some kind of attachment to the characters, and missing some of the backstory.
But if you really want to do that, you could surely find some plot summary of the first seasons to quickly get the main "facts".
I'm not sure Hollywood is even ostensibly paying for quality though.
I'm not trying to be smartass, just that having been around the industry there's a lot of companies below the top tier that are quite direct about their intent to just make something that sells for more than it costs.
The big players generally try to pay for quality, especially in scripted TV. That's because there's such a huge spotlight on everything, especially from critics and advertisers.
That doesn't mean crap doesn't get through the system, though. Some networks (cough VH1 cough) and production companies seem to specialize in churning out low-effort crap with a high expected return. That's a legitimate business model, I guess, but it doesn't seem to be the prevailing logic at broadcast networks or premium cable companies.
The operative problem is that quality is very hard to ascertain. A lot of our perceptions of "quality" are drawn from hindsight -- and from the heuristic bias of looking only at the winners, thinking their wins were obvious and preordained.
They've got general consumer research from firms like Nielsen, which doesn't really give you all that much insight into how a script will pan out. They've also got focus groups, and I mean that literally: network TV is one of the last great holdouts in abandoning the focus group. Focus groups are methodologically flawed for all sorts of reasons, and they're notorious for mis-predicting hit shows and movies. But they're still a staple.
But more to the point, the real magic isn't in the data networks may or may not be able to use ahead of time. It's in the data they should capture from the shows: how they're trending, how they're being talked about, what channels people use to discover them, conversion rates from various channels, marketing efficiencies in various channels, cohorts among viewers based on spending patterns, sentiment, word-of-mouth likelihood, etc.
My overall thesis is that less time and money should be spent on (80-90% useless) development research, and more money should be spent on analytical marketing post-launch. I think TV networks can learn a great deal from video game publishers, for example: similar business model, similar hit dependency, similarly huge budgets -- but a complete mastery of distribution and marketing channels.
Nielsen ratings, of course, get looked at and scrutinized daily. But those are lagging indicators, they're approximations, and they're not actionable. And changes made to shows can't be directly attributable in the following ratings.
A strong counterargument to this logic -- and I feel I should give it its due say -- is that overanalysis will lead to design by numbers. And that's a very real danger. But I think the greater present danger is on not being analytical enough. We've got a long way to go before we're designing shows by numbers. That'll be a bridge too far, but the bridge isn't even in eyeshot yet.
At the end of the day, the $100M for HoC was a big bet. It was a signaling tactic, a marketing tactic, and a bet on top-tier talent. But it was a bet, nonetheless, and an expensive one. That it seems to have paid off (to an extent? jury is still out) shouldn't fool us into 20/20 hindsight bias. It could just easily have busted.
"So as I understand it, the author is suggesting that NetFlix produce a bunch of low-rent pilots (or half seasons or so) throw them against their wall of subscribers with a bit of recommendation-targeted magic, see what sticks, then spend the money to produce the "grown up" versions."
Not necessarily, and I should clarify here. I think pilots can be shot for a lot less than they are, and I think audiences are proving themselves quite receptive to previews and other short-form "pilot" systems as proofs of concept. A lot of movie trailers are increasingly being made before the movies even start shooting ("teaser" trailers). I think there are ways Netflix can take the guesswork out of the development process, even if production is still an expensive endeavor.
You have to pay for a quality product, but the system right now also pays heavily for the risk in the pre-production process. That process can probably be de-risked considerably.
I would not recommend testing 100 half-baked concepts to see what sticks. But I do think Netflix could test or tease concepts in development to determine which ones to develop, and/or how to present new shows to the right early adopters.
Something I probably wasn't as clear about as I could have been: half the battle in finding a hit is developing an audience, not just a show. Netflix has better audience-development capabilities at all stage of the production equation. It doesn't need to guess quite as much as networks do.
Maybe -- to your point -- Netflix's audience-segmenting capabilities give it the ability to play the big bets game more than networks can. But historically, people have been shockingly bad at predicting what will actually hit and what will miss. Star Wars was laughed out of every major movie studio in town, for instance, and at the script level, it sure didn't look like "quality" to the eyes of the execs reading it. On the other end of the spectrum, a show like Firefly -- which fans (including myself) consider one of the most brilliant things ever made, has repeatedly failed to gain mass appeal beyond its limited niche, despite many attempts at re-marketing home video, a feature film, etc. The operative lesson here is that "quality," as an objective concept, is hard to parse and hard to pin down. "Quality" is more of a function with a lot of variables, and many of the biggest variables are on the production side and the audience side -- not the development side.
Tldr: People are over-investing in development, when they could be investing more heavily in production -- whether at greater scale, or in greater depth per project.