It depends.
If we're talking about Netflix the company, I can't think of a strong reason that you should. The company does provide some competition to an industry badly in need of it but not enough to make a big difference and certainly far less than we get from something like OTA television (click here and here to get started on that thread). The demise of Netflix would be a bad thing but it wouldn't exactly be traumatic. If, however, we're talking about a Netflix as an example of the dangers of naive and simplistic narrative journalism, the topic becomes considerably more important.
Just to be clear, I'm not blasting the genre as a whole. Narratives can do a wonderful job of bringing relationships into focus and pointing out the significance of facts we might otherwise overlook. From Wolfe's The Kandy-Kolored Tangerine-Flake Streamline Baby and Kael's Kane Mutiny to the latest from Michael Lewis, some of my favorite journalists and critics have used non-fiction narratives to express their ideas.
Of course, all of those narratives were complex, well-thought-out and written from unique points of view. When you take away the complexity, the thoughtfulness and the originality, you leave the form vulnerable to the greatest weakness of narrative thinking: selection bias. In an extreme cases, like the Netflix/Reed Hastings saga, not only are pertinent facts ignored but unsupported claims that fit the narrative are elevated to the level of fact.
If you take the standard account mindlessly regurgitated by writers like David Carr,* Here's a sample:
Original content is hard. As silly as the network process is — let’s finance 20 pilots, pick three and cancel two of them after three weeks — no one had come up with anything better until HBO came along. Its model of finding good people, paying them for full seasons and running their work until it builds an audience — or not — has been emulated to very good effect by Showtime, AMC, FX and now Netflix.The Netflix = HBO2.0 is one of the central recurring themes here, particularly regarding original content, but how similar are the approaches and models of the two companies? Despite Carr's implication, HBO does commission pilots, Its definition of 'good people' (especially behind the camera) is generally 'promising but relatively obscure' which is roughly the opposite of that of Netflix, where the approach has been to offer big checks for recognizable names. Furthermore, there's evidence that, even though the company pays top dollar, producers still treat the company as a place to pitch ideas after they've been turned down by HBO, Showtime, AMC, FX, etc.
As for the actual production and the post-run relationship with the programs, Rocco Pendola recently explained how sharp the contrast was.
First, Netflix guarantees 13 episodes right off the bat. Sometimes it will even give you a two-season commitment before the first season even airs. And, in terms of rights, it doesn't demand exclusivity. Outside of the first-run window, you are free to place your show anywhere you wish and, unless it cuts another deal with you, Netflix doesn't receive a cut of this action. Plus, there's very little, if any, creative development from Netflix.None of this means that Netflix will fail if it holds with its current strategy or that HBO can do no wrong (HBO worship is a standard narrative that should be addressed in another post). I'm not all that optimistic about NFLX, but it's a viable business in a volatile industry. With a few lucky breaks it could have a very good run.
In other words, the folks who output the content -- in this case, Sony -- are simply robbing Netflix blind. It's the type of deal that's too good to pass up.
Put another way, Sony doesn't care how many subscribers watch these shows on Netflix. They're more than happy to collect a fat (likely way too big) check, which subsidizes their risk, as they retain rights to sell the programming in markets where Netflix doesn't operate and in all other markets -- geographic and delivery -- after whatever the relatively short first-run window happens to be.
That's not how HBO, for example, plays the game. Never has been. And HBO sees no reason to start, given the franchise it has built and the enormous success it continues to have.
HBO doesn't give the world to studios and creators because it's not so desperate that it has to. It maintains exclusive rights to the programming it licenses. Unlike Netflix, it routinely produces programming in-house. And it almost always involves itself in the creative process. From what I understand, producers and directors actually appreciate this input, as HBO has a track record of making stars and producing huge hits.
Netflix is taking a massive risk writing big checks and doing whatever needs to be done to secure programming that might wind up elsewhere if "elsewhere" was as desperate as Netflix appears to be. Creators and studios go with Netflix because they can't turn down the easy money or their first choice turns down their programming. It's common to pitch HBO first, get a no and head over to Netflix. ...
What's significant here is that the standard narrative is not something that appears to have emerged organically from the facts; instead, it seems to have been an excuse to trot out the familiar and appealing _____-is-the-new-_____ template. Furthermore, once that template became accepted, the implications of the narrative were not only treated as facts; they were actually given more weight. Consider this previously mentioned quote from Forbes:
Of course, the end game may well lie in pivoting away from subscriptions and distribution altogether and moving into the world of content licensing. This would fundamentally change the company’s equation. Whether a move to content licensing is the key to Netflix’s future growth is yet to be seen, but it certainly sets up fascinating new dynamics—and ironies—for the broader industry.This fits perfectly with the HBO2.0 narrative (look at the post-run revenue stream of Sex in the City for an example of how big something like this can be) and so the idea that Netflix may be planning to become a major player in licensing makes it into one of our best and most respected financial publications. The fact that Netflix, despite the aforementioned huge checks that it's been writing, failed to acquire the rights to House of Cards and company. Unless something's buried in the fine print, they have no content to license and have shown no interest in acquiring any.
I'm not saying that these are necessarily bad decisions on the part of Reed Hastings and Ted Sarandos. I'll admit that I don't have a lot of faith in either (Sarandos, in particular, makes me nervous), but I can imagine scenarios where these decisions turn out to be pretty smart. I think they're a bit improbable but no one died and made me Nostradamus. What I am saying is that these decisions are not part of the standard narrative.
If you missed on the rest of this thread, here are some previous posts (if you're a real glutton for punishment, just search "Netflix"):
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
Netflix, the Emmys and the power of a happy narrative
Also check out Pendola's summary The Netflix Story in Three Tweets.
Rich Greenfield also has some sharp observations on the subject, some of which tie into a post I mean to write on the proper and improper use of business metrics.
* Carr's a bit of a creep too, but that's a topic for another day.
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