The future of Netflix isn’t just streaming — it’s original programming

Over the past several years, Netflix (s NFLX) has gotten really good at licensing some serious TV content from major networks. But if the company’s latest moves are any indication of its future direction, Netflix could soon become a major player not just in content licensing, but content creation.
On Tuesday, Netflix Chief Content Officer Ted Sarandos took the stage at the National Association of Broadcasters Show in Las Vegas to give a preview of the streaming service’s upcoming slate of original programming. It was an interesting moment. After all, here’s the guy who has spent the last several years making nice with cable and broadcast networks, writing big checks for their content. Now, he’s showing that Netflix is seeking to become a bit of a competitor with the very same networks and studios that it currently sources content from.
But if Netflix ends up competing for a greater share of viewers’ attention with its streaming offering, it’s only fair, Sarandos posited. After all, the increasing number of TV Everywhere apps and services are starting to encroach on its turf, he reminded the audience.
The early look at its foray into original content shows that Netflix’s future appears pretty promising Beyond Lilyhammer‘s quirky fish-out-of-water story of a New York City gangster who goes to Norway to enter the Witness Protection Program, Netflix has a slate of content that is star-packed. There’s House of Cards, the David Fincher-Kevin Spacey project that is based on a British novel and miniseries of the same name, appearing in early 2013. There’s Orange is the New Black, the story of one woman’s time in minimum-security prison, being spearheaded by Weeds creator Jenji Kohan. There’s the Eli Roth-led murder mystery Hemlock Grove, starring Famke Janssen. And, of course, there’s the long-awaited return of Arrested Development, five years after the series was cancelled by Fox. (s NWS)
Kohan, Roth, Janssen and a number of the members of the Arrested Development cast were there to tell the audience why they were excited about creating content for Netflix. For Kohan, the opportunity to work with Netflix was a way to show off a great new business model. And Roth talked about how Netflix gives him the freedom to create what will essentially be a long-form, 13-hour feature that will allow him to do what he does best — frighten people — and give his fans what they want and expect from him, something that might not be possible at a normal TV network.
The freedom to make interesting shows — without a network controlling the process or the output — seemed to be an underlying theme, though I don’t think anyone actually came out and said it. In that respect, Netflix could use its newcomer status as a way to recruit more talented content creators who are frustrated by the usual network system. That’s something HBO (s TWX) has long been applauded for — giving artists the creative freedom to build shows that wouldn’t necessarily play anywhere else.
Of course, it’s one thing to announce a bunch of star-studded shows. It’s a whole other thing to have them be good. Lilyhammer was an interesting starting point, but many who saw it seemed a little underwhelmed. And if House of Cards doesn’t hit it out of the park, serious questions could begin to emerge about Netflix’s ability to not just license shows that have already proven to be popular, but to create some of its own. And as the networks begin to increase the cost of the content that they license to Netflix, its future could very well depend on its ability to do that.