House of Cards: A TV Distribution Model for the Next Generation

February 20, 2013

After succumbing to the social and internet
buzz around Netflix’s new series House of Cards, I finally sat down to watch an episode. What followed was a
five-episode marathon that convinced me Netflix has won this round of the cable
vs. internet content distribution battle. After struggling to maintain
subscribers due to lack of new content (attributed largely in part to costs set by the cable industry),
Netflix took a gamble based on the habits of the next generation of viewers.
And the viewers won. 

Watching House of Cards felt a little too
good to be true. After the first episode, I was pleased to discover twelve more
episodes waiting – an entire season of new, high-quality content available at
my fingertips. Set in Washington DC,
starring an Oscar-winning cast, and with plot lines that seem derived from
contemporary headlines, it has all the makings of an expensive HBO series. It
was hard to believe this was coming from a company who only recently received
licenses for the once-popular West Wing series, which aired its last episode
over seven years ago.

As an avid television viewer, I am
conditioned to waiting through commercials and for new episodes on a
week-by-week basis. But as most people with a high-speed internet connection
know, those days could very well be a thing of the past. As someone who
understands that good content costs money, I am prepared to re-arrange my
schedule around a new Sunday episode of The
Walking Dead
in order to ensure cable funds the next season. However, it’s
not always that simple for non-cable subscribers, or cord cutters- previous
cable subscribers who because of financial hardship choose to end that subscription.

It is difficult to be both a fan of a series
and a non-cable subscriber. For instance, the popular Girls series on HBO is only offered with an at home HBO subscription. For
someone like myself, who is at the mercy of a landlord’s account, subscribing
to HBO is simply out of the question. I find myself in the same boat as many
disgruntled Game of Thrones fans, many
of whom recently launched a Take My Money HBO campaign in
an effort to persuade HBO to release the series sans subscription, but would
happily pay a fee for online access. These fans are vocal about the struggle of loving content
enough to not want to steal it, but are at odds with a cable industry they feel
is out of touch with reality.

Such is the reality of another type of
non-subscriber, the “cord-nevers”, which Netflix seems poised to capture.  As Time Warner CEO Jeff Bewkes described, the cord-nevers are a
generation of non-subscribers who can “afford three Starbucks a day” but never
have and won’t ever pay for cable. This is a generation that grew up with iTunes,
discover content via YouTube, and will more than likely watch a series in its
entirety via Hulu instead of waiting week after week for a new episode.

And this generation is not alone. As a recent
Forbes columnist lamented after realizing the ability to
access an entire season of content was surprisingly convenient, “It turns out that waiting for the
next episode is an artifact of an earlier era. A linear viewing experience in
what is now an non-linear, on demand, always on, world.”  This is ultimately
what Bewkes and the cable industry at large fail to understand, but why House of Cards is such a success.
Holding on to the delivery methods of the past might just as well cause you to
lose the consumers of the future.