entered the original programming game and is no longer just a distributor of other companies' content. "Lilyhammer," a dramatic comedy starring "Sopranos" actor Steven Van Zandt, went live on Sunday. For the first time, the following words have appeared on the opening credits to a television-style show: "A Netflix original series."Well, it's official. Netflix has
Rather than being broadcast on HBO, a standard cable channel or even network TV, "Lilyhammer" is going straight to audiences via the Web. Netflix hopes that by making some content available exclusively through its service, it will attract new users and potentially even gain some additional leverage with other content providers.
This is a trend that's been unfolding among the premium streaming services this year. Hulu, which plans to invest $500 million in new content initiatives in 2012, will be launching an original series of its own next week. Even YouTube has been putting more effort into making higher-quality content available and recently launched a substantial redesign geared toward aiding in content discovery.
2011: A Rough Year For Netflix
Netflix's own new initiative comes after what can hardly be described as a good year for the company. Between its subscription rate increase, loss of a key content deal, botched plans to spin off its DVD business and loss of 800,000 subscribers, the latter half of 2011 alone was a bit of a nightmare for the once-beloved company.
It also comes a time of heightened tensions between Netflix and some of its content providers, who have more traditional relationships and revenue streams to worry about. First, the company lost a key contract with Starz Entertainment. Now DVDs of Warner Bros. movies are subject to a 56-day waiting period before users can rent them, and a 28-day window before they can be added to one's queue. Netflix hasn't exactly pushed back against such efforts from Hollywood, so perhaps it deserves part of the blame. Regardless, it's clear that big content providers are nervous about the potential impact streaming services could have on traditional models.
Original Content: A Savior?
This being the case, the move toward original content is a wise, indeed necessary, one. Will it be enough to turn things around? It's hard to say what kind of impact "Lilyhammer" alone will have, all the show is apparently already very popular in Norway. What's perhaps more important is the milestone that this represents.
One of Netflix's next forays into exclusive content will be interesting to watch. "Arrested Development," the discontinued Fox comedy with a major cult following, will return for a new season, but will only be available on Netflix.
This will be the year that online streaming services try to position themselves as an even more attractive alternative to cable by offering their own content. Even if the new trend doesn't destroy any legacy models, it could bolster the leverage of streaming services when it comes time to negotiate with legacy players over content deals.