We all know how successful the popular original Netflix production House of Cards was when it was first released in 2013. The show has remained successful till this day. But what if I told you Mordecai Wiczyk and Asif Satchu (the co-founders of Media Rights Capital) had gotten mixed reactions from the TV networks while they were pitching the show back in 2011?

The networks liked the concept and the top talent that came with the project (Director David Fincher, the Academy Award-nominated writer Beau Willimon and the Academy-winning actor Kevin Spacey) but none of them were willing to fund a pilot episode because a lot of people in the film industry back then felt that political dramas wouldn’t sell. This was partly due to the fact that no political drama had succeeded since the final episode of The West Wing 5 years prior, in 2006. Executives were skeptic about House of Cards.

The reception that Wiczyk and Satchu received when they approached Netflix, on the other hand, was different. Netflix’s Chief Content Officer wasn’t as concerned as the major TV networks were about “the market’s taste for political drama.” Instead, he came into the meeting with one main thing in mind, data–Netflix’s data (They’ve been ahead of the curb for a while now). In case you didn’t know, Netflix has data on the individual viewing habits of subscribers like myself. In this case, we’re talking about 33 million subscribers back in 2011. His analysis showed that a large number of subscribers were interested in movies directed by David Fincher and movies starring Kevin Spacey.

Heck, the data also revealed that a significant percentage of subscribers had rented the original BBC series (House of Cards was inspired by a BBC miniseries of the same name. Wiczyk and Satchu bought the rights from them).

Basically, Netflix’s Chief Content Officer knew the show would work. Now here’s the crazy part. Netflix didn’t make the typical offer at the time of $5 million or $6 million to produce a pilot episode that may or may not work out well. Instead, they offered $100 million for an up-front commitment to a full two season slate of 26 episodes!–the usual offer is 6 to 12 episodes for a new show on a network. And guess what? The decision to bypass a pilot episode wasn’t the only difference between Netflix’s approach and that of the major networks at the time.

Instead of releasing one episode a week to build up an audience, they planned to release all of season one’s thirteen episodes at once. You’re probably thinking well yeah, why wouldn’t they right? But this was uncommon/unheard of at that time. So to wrap this up, Netflix had a clear advantage over the broadcasters:

  • Their streaming platform didn’t restrict viewers to watching specific episodes at specific times
  • Viewers didn’t have to watch commercial breaks
  • Personalized marketing using consumer behavior insights

Many argue that content creators and markets for entertainment are doomed because of how technology is changing the nature of the industry. Yes, technology makes some business models less profitable, but it also allows for new levels of personalization, variety, and convenience. All of this introduces new ways to deliver value to customers, and new ways to profit from delivering this value–just like Netflix is doing.

So, based on the success of House of Cards, I think it’s safe to say that making data-driven decisions and embracing new business models can be very worthwhile and rewarding. The chart below reflects just that:

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SEE ALSO: How Netflix and Amazon Are Changing the Indie Movie Business


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