Netflix, other Web networks vie to be new HBOs of TV drama

With a reported $100 million price tag and a big-name star like Kevin Spacey, "House of Cards" looks like a drama series that should be headed for HBO or AMC.

But the 13 one-hour episodes that start filming in Baltimore in March under the direction of David Fincher are being made by and for Netflix. Yes, that Netflix, the one with the red-and-white envelopes you get via snail mail, or the one you stream programs from online.


"House of Cards" is the biggest and most credible challenger yet to cable TV's control of quality original programming. Just as premium channels such as HBO started making their own films in the 1980s to wrest control from the broadcast networks and Hollywood production companies, so are distributors like Hulu and Netflix trying to do to the cable industry today.

And some analysts see that as the cutting edge of a major shift in the way viewers receive and watch television.


"Think back to 1980 or so, and ask yourself what was the first major move made by HBO after it was established in peoples' homes as a delivery system for movies," said Douglas Gomery, a resident scholar at the Library of American Broadcasting. "And the answer is: They started making their own movies — original content. That's the same story here, 30 years later."

The rise of these Web networks might ultimately have more impact than the economic stimulus the series will provide to the local economy.

This is not pie-in-the-sky, futuristic techno-talk about jumpy, ragged-looking Web productions. Tens and hundreds of millions of dollars have been invested in productions that are designed to look as good as, or better than, anything on network or cable television. While "House of Cards" is clearly the most ambitious, some of the early examples of the new productions are ready to be seen in American homes.

On Feb. 6, Netflix will begin streaming the first season (eight episodes) of "Lilyhammer," a drama starring Steven Van Zandt ("The Sopranos") as a New York mobster who entered the U.S. witness protection program and was relocated to Norway. While it is a much smaller project than "House of Cards," it is one the industry is watching closely.


One reason for that is the way Netflix is trying to cash in on lifestyle and on-demand viewing trends, promising its 20 million subscribers that all eight first-season episodes will be available to stream on Feb. 6.

"If you love the first episode, there is no need to wait until next week or to set a DVR to catch the next one," Netflix's chief content officer, Ted Sarandos, said in a statement.

One of the most buzzed-about Netflix projects involves new episodes being made of the canceled Fox sitcom, "Arrested Development," an Emmy Award-winning cult favorite that never found a network-size audience.

But Fox and Netflix believe there is enough demand that it will become a money-maker under the new Internet business model. Netflix will partner with Fox and Imagine Television, the network and Hollywood production company, respectively, that originally aired and owned the series.

Hulu, a smaller distribution service that has relied primarily on reruns of network shows since its arrival in 2008, debuts its first original series, "If I Can Dream," on March 2.

The online video service, which has about 1 million subscribers, is partnering with Simon Fuller's 19 Entertainment production company on this look at five young artists trying to launch careers in Hollywood.

As Gomery explains, this is history repeating itself. "HBO wanted to make original content because they didn't think the studios were providing them with the kind of stuff that met their subscribers' needs."

Only now, HBO, with all its Emmy-winning movies, and AMC, with series like "Mad Men" and "Breaking Bad," are the status quo, and Netflix and Hulu are the new wave.

That dynamic could be seen in the trade publication coverage of "House of Cards," which emphasized Netflix and Media Rights Capital outbidding HBO and AMC for rights to the series and committing to 26 episodes over two seasons without a pilot first being made.

And it appears that Wall Street likes the way Netflix is adapting to the media landscape.

Netflix's stock price jumped 11 percent last week after the company said its customers streamed more than 2 billion hours of content in the fourth quarter of last year.

The Los Angeles Times quoted media analyst Rich Greenfield as saying that if Netflix were a TV network, it would already be "ranked 15th, ahead of CNN, FX and History."

And that's without original programming like "House of Cards."

"It's thrilling that we are among the first to be in this new media experience," John Melfi, an Emmy-winning executive producer for "House of Cards," said in an interview with The Baltimore Sun after the production deal was announced Thursday.

"The audience doesn't differentiate any longer" as to where programming comes from, he added. "I don't know if you've seen the stories about the 2 billion hours that Netflix subscribers have clocked in, but it certainly proves that the audience likes to be in control now of its viewing experience. And this is the kind of production that's going to help them choose what they are watching."


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