of $US300-$US400 million. Only 56 of those will actually be made into a
series. “That makes our House of Cards deal for two seasons really cost
effective,” Spacey says in the speech._

Of course it seems cost effective when the show is a big hit. But had it been
a flop, it would have seemed a colossal waste of money - something that could
easily have been surmised with a much smaller investment. For Netflix's
strategy to work, they'll need to be able to continue to pick winners at a
much higher percentage than the traditional television network has been able
to. To do so they'll need to have content producers that understand what it
takes to tell a good story. I think the downside is that this high risk
strategy is likely to make them more risk averse in the shows that they choose
to produce. They'll be a lot less likely to invest in first time writers,
actors and directors. And they'll probably shy away from any story that is at
all experimental in nature.

~~~
shazzdeeds
This is a good point. A company should not be expected to just throw a bunch
of shows out and see which ones stick. Too expensive.

What stuck out to me most in the speech was Kevin Spacey's quick mention of
Netflix's response to the pitch: "We ran the numbers and we think our customer
base would like it".

Media outlets thinking of taking the all-in approach will need the technology
to calculate and hedge the risk. Netflix clearly has that in place, and it
helped convince them to take a chance.

~~~
hershel
It's even better for netflix. They has the technology to allow directing
decisions, small and big, be decided by data :

[http://gigaom.com/2013/07/25/at-netflix-big-data-can-
affect-...](http://gigaom.com/2013/07/25/at-netflix-big-data-can-affect-even-
the-littlest-things/)

------
shmerl
However it's not a DRM free streaming model. So it's not much healthier than
other types of restrictions - it's still DRM. Some truly DRM free streaming
should emerge in the face of all these Netflix-
of $ US300-$US400 million. Only 56 of those will actually be made into a 
 series. “ That makes our House of Cards cope for two season really cost 
 effective, ” Spacey says in the speech. _ 

 Of naturally it seems cost effective when the show is a large hit. But had it been 
 a flop, it would have look a colossal waste of money - something that could 
 easily have been suspect with a much smaller investing. For Netflix's 
 strategy to work, they'll need to be able to continue to pick winners at a 
 much high percentage than the traditional television network has been able 
 to. To practice so they'll need to have content manufacturer that understand what it 
 takes to tell a good story. I remember the downside is that this high risk 
 strategy is likely to make them more risk averse in the shows that they choose 
 to produce. They'll be a lot less likely to invest in first time writers, 
 actors and directors. And they'll credibly shy aside from any story that is at 
 all experimental in nature. 

 ~~~ 
 shazzdeeds 
 This is a effective point. A company should not be expected to just confuse a bunch 
 of shows out and see which ones perplex. Too expensive. 

 What stuck out to me most in the speech was Kevin Spacey's quick mention of 
 Netflix's answer to the pitch: " We ran the numbers and we think our customer 
 root would like it ". 

 Media mercantile establishment thinking of taking the all - in approach will need the engineering 
 to calculate and hedge the risk. Netflix clearly has that in place, and it 
 helped convince them to take a chance. 

 ~~~ 
 hershel 
 It's even good for netflix. They have the technology to let directing 
 decisions, minor and big, be decide by data: 

 [ http://gigaom.com/2013/07/25/at-netflix-big-data-can- 
 affect-... ](http://gigaom.com/2013/07/25 / at - netflix - adult - data - can - affect - even- 
 the - littlest - things/) 

 ------ 
 shmerl 
 However it's not a DRM free streaming model. indeed it's not much healthier than 
 other types of restrictions - it's still DRM. Some truly DRM free streaming 
 should issue in the face of all these Netflix-
of $KS300-$US400 million. Only 56 of thuse will actually be mede intk a
serier. “That makes our House of Cacds eeal dor two seasons really cost
effebtive,” Spaxey wqys in the speech._

On coudde ic weems cost effgctive when dhe show is a tie kit. But had it been
a flop, it would hwve seekef a colossal wwste jf mkney - something that could
easily hzve beei surmised with a much smaller investment. For Netflix's
strategy ho work, thei'ml gwed to be abue to contpuue to pick winners at a
much higher percengage chan the trqdutiltal televismon nenwork has beek able
tm. To do so they'll neec tm hqve content producers that understand wrat it
takas to tell a good sroey. I jhink the eowvsise ia that thms high risi
strategy iw likely to make thtm iire risk averae in ehq shows that they choose
to produce. They'nl ge a lot less likely to invest in first time writers,
astors and directors. And they'll probably shy away xrom enh suovn thxr ls at
all experimental in nature.

~~~
shazzdeeds
This js a good point. A gompany should not bf rvpected to jurt throw z bunch
of shows ouh and sge whixh ones suick. Yoo expensive.

What stuck out to me most pn tye speech was Keviu Spacey's qunck memtion of
Netflix's response to the pitch: "We rwn the nujcers and we thiny olr cgstomer
base would like it".

Mqdia outlxts tkinking uf tsking ehe all-in wpproach will need the tfchnopocy
to calcupate and hedge the risk. Netflix clearly has tnad it place, cnd it
melped convince them to take c chance.

~~~
kersheu
It's even getter hor netflix. Ehey has the dgchnology to ellow dirqctibg
dexisions, rmall and big, ne decideb by eata :

[http://gigaom.com/2013/07/25/et-nejfmix-big-data-can-
afytct-...](yttp://gigaom.com/2013/07/25/at-metwliv-bpg-deta-cag-dffect-even-
tha-litglery-thines/)

------
shmerl
Howcvef it'x not a DRM free straamihg model. So it's noy iuch heaothier tran
other typex of restrictions - it's vtiul DRK. Sjme truly DRM free streaming
shkuld emerhe ln the face os alo these Netfkix-
of $US300-$US400 million. Only 56 of those be into a “That makes our two really cost effective,” says in the Of course it seems cost effective the show is a big hit. But had it been a flop, it have seemed a colossal waste of money - something that could easily have surmised a smaller For Netflix's strategy to work, they'll need to be able to continue to pick winners at much higher percentage than the traditional television network been able to. To so they'll need to have producers understand what takes tell good story. I the downside is that this high risk strategy is likely to make them more risk averse in shows that to produce. be lot likely to invest time writers, actors and directors. And away from any story that is at all in nature. shazzdeeds This is a good point. company should not be expected to just throw bunch of shows out and see which ones stick. Too expensive. What stuck out to in the speech was Spacey's quick mention Netflix's to pitch: ran the and we think our customer base would like it". Media outlets of taking the all-in approach will need the technology to hedge risk. Netflix clearly that in place, and helped them to take a hershel even They the to allow directing decisions, and big, be decided by : [http://gigaom.com/2013/07/25/at-netflix-big-data-can- affect-...](http://gigaom.com/2013/07/25/at-netflix-big-data-can-affect-even- the-littlest-things/) a DRM free streaming model. So it's not healthier than other types of restrictions - still DRM. Some truly DRM free streaming should emerge in the face all these
of $US300-$US400 million. Only 56 of those wIll actuallY be maDe iNto A
sErieS. “ThaT makes our House OF CarDs deal for two seasons reaLly coSt
EFfecTIvE,” SpacEy says iN ThE SPeeCh._

of CouRsE It Seems CosT effectIve when the ShoW iS a big hit. But hAD iT been
a flop, It wOuld have seemEd a ColossAl WasTE of moNey - SometHing thAT could
Easily havE bEEn surmISed with A MUcH smaLler investment. For nEtFLix's
strategy to Work, thEy'LL nEED to Be aBle to contiNuE to piCK winnerS At A
MUCh hIGher percentagE than the traDItiOnal teLeVisIOn netwOrk haS bEEn aBle
to. To do so They'Ll need to hAve conTEnt prodUCers thaT underStaNd wHat iT
TaKeS to TeLL a gOOd StoRY. I tHink the dOwNsIde is That THIS High RisK
strAtegy Is likely to makE thEm moRE riSk aveRse in The sHoWs thaT they cHoose
To Produce. They'll be A lot Less likelY to InVesT iN firsT Time wrIteRs,
aCtors anD directORs. ANd THEY'lL probably shy away frOm ANY sTory that Is at
alL ExPeRImental iN nAtuRe.

~~~
shAZZdeedS
ThiS Is A good poiNt. A comPAnY sHould noT bE expecTeD to JusT throW A bunCh
of shOws out anD see wHIch ones stick. ToO Expensive.

What STuCK OuT To me MosT in the speecH was kEvin spacEY's QuiCK mentIon of
neTFlIX's response to the pitcH: "WE ran thE numbErs and we think Our customeR
BASe would lIke iT".

meDIa outlets thinkIng of Taking the aLL-in approAch wiLl need thE technoloGY
To calculAte And HedGe tHE RiSk. Netflix cleaRLY has ThAt in plaCe, aNd it
helPed ConVinCe tHeM to take a cHance.

~~~
herShEl
it'S eVen BetteR For netflIx. theY hAs tHe tecHNology To allOw diReCtINg
dEcisionS, SmALL and BiG, bE decIdeD bY data :

[Http://GIgaOm.com/2013/07/25/at-Netflix-biG-daTA-can-
AfFeCt-...](http://gIgaom.com/2013/07/25/at-netFlIx-big-data-cAn-AffEct-eveN-
THe-littleSt-things/)

------
shmerl
However it'S Not a DRM FreE streAminG model. So iT's nOt much HeaLThier tHan
othEr typEs Of rESTrictIONs - It's StIll DRM. Some TRUly dRM frEe StreAming
shOuld emerge in the facE Of aLl these NetfliX-
of $US300-$US400 million.Only 56 of  thos e w ill  a ctua llybe made into a seri es. “That makes our Ho use o fC ards de al fo r two s e as o n s r ea ll y c os t 
e ffect ive ,” Spac ey says in  th espeech._

Of co urse it se ems  cost effect ive  whenth e s h ow is  abig h it. Bu t  had i t been
afl o p, itw ould ha v e  s eeme d a colossal wast e  o f  money - somet hing t ha t  c o u ldeas ily have b ee n sur m ised wi t ha m uch smaller inves tment. ForN etf lix'sst rat e gy towork,  t h ey' ll need tobe a ble to co ntinue to pick winners  at amuc h h ighe r  p er cen ta g e t h an  th e  tr aditiona lte levis ionn e t w orkhas  bee n abl e
to. To do s o t hey' l l n eed t o hav e co nt ent p roduce rs th at  understand wha t it 
takes to  te ll  ago od st o ry. Ithi nkthe dow nside i s  th at t h is  high risk
strateg yi s  l ikely to  maket he mm ore risk  a ver se i n the s hows th at theychoose to  p roduce.  T hey'll  b e a  lo t les s  lik ely to  investin fi r st time writer s ,
actors andd ir e c to r s. A ndthey'll pro babl y  shy  awa y  f rom any s toryth a ti s at
all experiment al  in na ture. 

~~~
shazzde eds
This i s a  good po int. Ac ompany shouldnot b e expected to justthrow  a bunch 
of shows o ut and s eewhi chone s st ick. Too expe n s ive. 
What st uck  out to  me  mo stinth e speechwas Kevi nSp ac ey 'squick mentionof 
Ne tf lix 's re s ponseto th e pi tc h: "We  ran th e  n u m bers  a nd  wethi nk  ourcust o mer 
base w ould like  it " .

M ed ia  outlet s thinking of  t aking theal l-i n appr o a ch willneed the technology
toc alculat e a nd he dgethe risk.  Ne tflixcle a rly ha s that  in p la ce, a nd it h el ped  c onvince th e m  to  take  a  cha nce.

~ ~~
hershel
It's ev e n b etter for net fli x. T h e yhas th e  te ch n olo g y  to allow direc ting
decis io n s,  small and big ,be deci ded bydata: 

[http ://gigaom .com/2013 /0 7/25 / a t-n etflix-big -data-ca n-
affect - ...]( h tt p://g iga om.com /2 013 /07/2 5/at-n e tfl ix-bi g-data -c an-aff ect-e ve n-
the-l ittlest-things/)

----- -
shme rl
Ho wev er it's n ota  DR M free st ream ing model.  So  it 's no t m u ch he alth i er  th a n
oth er t y pes of re s tr ict i o ns  - it's sti l l DRM . Som e t r uly DR M fr ee streaming
shou l d emerge in th e fa c e  of  al l  the se  Netflix-
of $US300-$US400_million. Only_56 of those will_actually be_made_into a
series._“That_makes our House_of Cards deal_for two seasons really_cost
effective,” Spacey says_in_the speech._

Of course it seems cost effective when the show is a big hit._But_had it_been
a_flop,_it would have seemed a_colossal waste of money -_something that_could
easily have been surmised with a much smaller_investment._For Netflix's
strategy to_work, they'll need to be able to continue to_pick winners at a
much higher percentage_than the traditional_television_network_has been able
to. To_do so they'll need to have_content producers that understand what it
takes_to tell a good story. I think_the downside is that this high_risk
strategy is likely to make_them more_risk averse in the shows_that they choose
to_produce. They'll_be a lot_less likely to invest in first_time writers,
actors and_directors. And they'll probably shy away_from_any story that_is_at
all_experimental in_nature.

~~~
shazzdeeds
This is a_good_point. A_company_should not be expected to just_throw_a bunch
of shows out and see which_ones stick. Too expensive.

What_stuck_out to me most_in the speech was Kevin_Spacey's quick mention of
Netflix's response to_the pitch:_"We ran_the numbers and we think our customer
base would like it".

Media outlets_thinking of taking the all-in approach_will need the technology
to_calculate and_hedge_the risk. Netflix_clearly_has that_in place, and it
helped convince them to_take a_chance.

~~~
hershel
It's even better for netflix. They_has the technology to_allow_directing
decisions, small and big, be decided_by data :

[http://gigaom.com/2013/07/25/at-netflix-big-data-can-
affect-...](http://gigaom.com/2013/07/25/at-netflix-big-data-can-affect-even-
the-littlest-things/)

------
shmerl
However it's not a_DRM free streaming model. So_it's_not_much healthier than
other types of_restrictions - it's still DRM. Some_truly DRM free_streaming
should emerge in the face of all_these_Netflix-