Showing posts with label Emmy Awards. Show all posts
Showing posts with label Emmy Awards. Show all posts

Tuesday, September 24, 2013

Netflix, the Emmys and the power of a happy narrative

I probably should have been more explicit about this but the Netflix thread* always consisted of two intertwined sub-threads: The first was a discussion of the business model and methods and how they fit in with the larger television industry; the second concerned the media narrative and the way journalists and pundits found ways to justify the story they wanted to tell.

Last night something big happened to both of those threads. For perhaps the first time in recent memory, the Emmys actually mattered.

To understand the impact on the first thread, you have to take a detailed look at the most likely business model for Netflix. Most likely here does not mean most commonly given. That would be that Netflix hoped to bring in enough additional subscribers to justify the hundred million dollars they spent on House of Cards. Even the numbers from Netflix don't seem to support that claim and as certain shrewd observers (such as Mark Rogowsky and Rocco Pendola), some of the numbers we get from Netflix are questionable.

The far more credible model was that the company was as interested in the prestige and PR value associated with the perception of having a critical and commercial hit. Thus if House of Cards brought in an additional $50 million through new subscribers and decreased churn and also provided the indirect benefits from reputation then the deal made financial sense.

At this point it's useful to step back and compare the way Netflix developed original programming to what we might call the HBO model, also practiced by FX, USA, TNT, and AMC. The HBO model normally starts by hiring a collection of respected B-list talents such as David Chase, Timothy Olyphant, or Louis CK and finding promising C-list talents such as James Gandolfini or Jon Hamm. This increases the risk of failure on the individual show level but it produces a good aggregate ROI and it makes you look like a genius when someone people have never heard of becomes the next big thing.

Netflix took largely the opposite approach with H of C, spending lavishly for hot property, an A-list star and and the director of such films as Seven, Fight Club, Zodiac, and The Social Network. As mentioned before, this expense is difficult to justify strictly in terms of subscribers and churn but it could make sense if the show generates sufficient publicity and has a substantial brand effect.

This is where the Emmy's come in. For a network show an Emmy is not that big of a deal. It can give a nudge to an on-the-bubble series but it generally doesn't translate to a big bump in absolute numbers. It is, however, a valuable branding tool and, more importantly, it's an indicator of branding success. Thus, when AMC was trying to rebrand itself a few years ago, that first award for Mad Men really was a big deal.

Under these circumstances, there's no way that Netflix is happy about the results of these weekend's awards. They wrote huge checks to get House of Cards and Arrested Development (without even managing to acquire all the IP rights). They plastered LA with "For Your Consideration" ads. For all that, they had a poor showing in the nominations and a worse showing on Sunday. After all this effort they got a couple of meaningless "Creative Arts" Emmys (casting and cinematography) and the second tier major, directing (which, given David Fincher's reputation, was almost a given).

Ideally, when a company has devoted this kind of resources to a goal and that goal doesn't pan out, the company will at least reexamine its strategy and tactics, but Netflix isn't really in a position to do that and one of the reasons for that inability to react involves the other thread.

Netflix stock is running very high at the moment and Reed Hastings, Theodore Sarandos and other high ranking people at the company have raked in huge amounts of money in large part because of a pervasive and overwhelmingly positive official narrative. The admission that the model needs work could easily end up costing these executives tens of billions of dollars.

More importantly, the journalists covering the story are working very hard to see to it that Hastings never has to make that admission.

Here's the Wall Street Journal:
If Hollywood wasn't already taking Netflix seriously, it is now.

The streaming video service scored a win at the TV industry's Emmy Awards on Sunday night as David Fincher took the best director prize for political drama "House of Cards." It marked the first victory in a major category for an online video distributor.

The Emmy win could boost Netflix's prestige in Hollywood as an outlet for high-quality original series and further encourage writers, producers and actors to consider Netflix projects at a time when competition for talent among TV networks is as fierce as ever.
You can argue that the Emmys don't matter, but you can't argue that Netflix's one win in a category no one cares about constituted a good night. (Unfairly or not, TV is not considered to be a director's medium. Fincher didn't even show up to collect the statue.) However, we have reached the point in the journalistic narrative process where response is not all that dependent on the nature of the stimulus. Anything short of complete disaster will prompt cheerful, bullish stories. That's what the narrative calls for.

p.s. I dictated much of this using my smartphone. I believe I got all of the homonyms but I apologize if some slipped by me.

* Among others:

Edging away from the genius hypothesis

Netflix can never be the next HBO

Curiously, agressively anti-social

Two quotes about Netflix, presented (almost) without comment

House of Cards -- either already in the black or seriously underperforming