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Michael K. Powell

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Netflix or Heinz Ketchup?

Posted: 02/07/2013 9:12 am

Last week to great fanfare, Netflix launched the entire season of House of Cards. I have yet to watch the show, but the buzz surrounding its release is as much about Netflix's novel approach of releasing all thirteen episodes at once as the quality of the story. Some admirers of the strategy breathlessly insist it marks the end of traditional cable networks. While that viewpoint is fanciful, this kind of experimentation simply shows a healthy marketplace that is always looking for the next big thing.

Netflix is betting in part on the idea that instant gratification is superior to anticipation. This reflects to some measure the narrative of the Internet elite that everything you want when you want it is the ultimate satisfaction for consumers. But as Barry Schwartz explained in The Paradox of Choice, infinite choice is not generally as satisfying as it might seem, and I have a hunch that Netflix's faith in binge television underappreciates the joy that can be derived from expectation.

In the late 1970s Heinz Ketchup ran an ad accompanied by the soundtrack of Carly Simon singing "Anticipation." The power of the ad was the idea that there was pleasure in the waiting, the anticipation, and the expectation. We all have watched the joy of children before Christmas charged with excitement about the coming of Santa Claus. But once the wrapping is off the presents, the excitement in the air starts to escape the balloon. Andy Warhol said, "The idea of waiting for something makes it more exciting." Behavioral psychologists have observed that wanting something has a much stronger emotional impact than the pleasure that comes once you have it, or the memory of having had it.

Television is the original social network. Consumers love great television, but they also love talking about television. Sharing with friends the thrill of the last episode, debating what will happen next, working to enlist friends to watch the same shows that you love. Giving consumers the choice of having it all in one big bite means different viewers are in many different places in the book, making it hard to discuss without spoiling the plot. The intervals between first-run programming provide a space for communion and that tantalizing sense of anticipation. "I can't wait for the next show to start" may not actually be a consumer complaint as much as an expression of the emotion that anticipation brings. Only time will tell.

It's great to have Netflix add its support to original programming, but it's perilous to think this initial foray mean the death of icons like HBO (Game of Thrones), Showtime (Homeland), AMC (Breaking Bad and Mad Men). Making high quality programming is both hard and expensive. These brands have been in the business a long time. They have the experience, the writers, the talent pool, director relationships and budgets to continuously turn out great stories and get them distributed.

The cable model may seem less sexy to some than Internet startups, but it provides the monetization and stability that allows cable networks to continue to produce high quality programs that today cost close to three to four million dollars an episode. Netflix says it will spend $300 million on original programming over the next few years; premium channels like HBO and Showtime will collectively spend nearly $4 billion over the same period. The content business is a very high-priced, risky game. It's challenging for Netflix when a consumer can take a 30-day trial subscription and watch all 13 episodes of House of Cards and then cancel, not having paid a dime.

House of Cards is a highly interesting and innovative experiment. We will see if it proves to be a new wave in how television is produced and delivered or whether the cable original programming market (a market that delivered 10 out of the 11 available TV Golden Globe Awards in 2012) is the best way to consistently bring premium content into our homes. Or maybe they will coexist and we all thirst for enjoying video in different ways.

Someone who has seen his own fair share of galactic battles, none other than Mr. Spock of the Star Trek Enterprise once warned, "After a time, you may find that 'having' is not so pleasing a thing, after all, as 'wanting.' It is not logical, but it is often true. "

 
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