14 DAY TRIAL // Netflix, the DVD-rental turned movie-streaming powerhouse is said to be looking to produce an exclusive show, a first for the company, a move which would put it on par with established cable players such as HBO.
Apparently, the company is willing to blow quite a bit of money for this, securing the rights to a high-profile drama starring Kevin Spacey and directed by David Fincher.
Netflix has been slowly picking up Steam and growing its user base, but this is probably the boldest move yet. According to Deadline, Netflix may be willing to pay as much as $100 million for the show, outbidding established players such as HBO or AMC.
Apparently, Netflix put itself in the lead in the bid process by committing to finance two seasons, or 26 episodes, without even a pilot, something that never happens these days.
Even the big four broadcasters and major cable networks rarely go straight to production and when they do, they order only a few episodes.
A single episode can cost several million dollars and no one is prepared to commit that much money from the get go.
While the sum seemed quite out of Netflix's league, at first, since it usually acquires an entire catalog or at least several full shows with this kind of money, the move may make financial sense in the long run.
All Things D's Peter Kafka argues that putting this kind of money on the line signals to others that Netflix is willing and able to create original content and, as such, is less dependent on others' shows.
This could provide the company with a much stronger position at the negotiating table, especially as it fights to secure the rights to even more shows and movies.
The gambit may pay off, but it's a big bet on Netflix's part. Without it though, Netfix would find itself in a position where it won't be able to afford to purchase licensing for new shows as TV and movie studios start fearing the video streaming model.
In the end, with pressure from content creators and ISPs, which are often run by cable operators, Netflix's only way forward is to fight and become so large that it can't be stopped.
After all, just as it can start creating its own content, what's to stop Netflix, or others such as Google, from rolling out internet services that would out-manoeuvre the existing big players and circumvent any attempt to throttle the service to hurt Netflix. It may seem farfetched, but it may just come to that.