Netflix’s House of Cards Is More Than a Cash Cow — It’s a Cash Herd
Between an aggressive content acquisition strategy and the development of original content like House of Cards and Orange is the New Black, Netflix (NASDAQ:NFLX) has become a critical part of the entertainment economy. The digital video streaming company ended 2013 with more than 44 million subscribers from around the world, adding 2.3 million U.S. subscribers and 1.7 million international subscribers in the fourth quarter alone. With those kinds of numbers, Netflix is home to one of the largest TV audiences in the market.
It helps that the service is available online and on pretty much any device with a screen and a connection to the Internet, giving the audience flexibility and control over its media consumption. Netflix has capitalized on this, a value add over traditional television for most consumers, by releasing each season of its original content all at once. As Kevin Spacey, an executive director of and actor on House of Cards, put it in an interview with CBS News earlier in January, Netflix is allowing consumers to treat their entertainment “like it’s a novel. You pick it up when you want to pick it up. You put it back on the bedside shelf when you want to put it down.”
This feature has become a huge selling point for Netflix. Given the opportunity, many subscribers will binge, suggesting that the capacity to binge-watch is a feature worth subscribing for. Broadband technology firm Procera estimates that 16 percent of Netflix subscribers using a particular but unnamed Internet provider tuned in for at least one episode of season two of House of Cards, which was released on Friday. If the data can be extrapolated, that’s roughly 7 million viewers, and Procera reports that its data show “clear signs of binge watching.”