House of Cards Has No Advertising
House of Cards carries no advertising, no commercial breaks. Without advertising, there is less need to spread episodes out over time. Without advertising, there is less pressure to regularize audience attention.
Netflix’s simultaneous release of all the episodes of House of Cards has generated commentary on binge viewing, social TV, the definition of “hit” TV (and here), and business models (and here). Netflix is disregarding conventional audience management strategies, particularly the sequential release of one episode per week. For the past 80 years of commercial broadcasting, the weekly release of episodes served at least two purposes: to fill airtime economically by spreading narratives out over time, and, most important, to secure audience attention for advertisers on a regular basis.
Netflix has the freedom to release all episodes at once because Netflix is not in the business of organizing audience attention for advertising messages. That means Netflix does not have to regularize that attention through scheduling or measure that attention through ratings. Linear commercial television manages “audience flow” with scheduling strategies designed to deliver certain targeted audiences to certain advertisers, as measured by ratings services. Viewers may believe television networks serve them; however, television networks’ primary customers are advertisers, and programs are a means of delivering audiences to those advertisers. Netflix’s customers, on the other hand, are not advertisers, but viewers. What advertisers prefer, a regular schedule that guarantees the weekly exposure of their products, need not shape the preferences of such viewers.
Why doesn’t Netflix schedule like HBO, then? HBO, a commercial-free premium subscription service, creates artificial scarcity by withholding already produced episodes, doling them out week by week. HBO began as a linear service designed to attract subscribers to cable services; its strategies are thus designed to build subscriber loyalty to itself and to cable operators; its announcements of audience ratings serve only to market its brand, not to measure audiences delivered to advertisers. Many observers assume that Netflix is evolving like HBO, shifting from a program buyer to program producer to ensure subscriber loyalty. However, Netflix offers something HBO cannot: asynchronous viewing of a deep catalog of programming. Although HBO offers HBO Go, that service is limited to cable subscribers and to HBO programming. Since asynchronous viewing is what Netflix can offer more cheaply and efficiently than HBO, Netflix needs to distinguish itself from HBO precisely on that basis to attract and retain subscribers. Hence, rather than weekly releases, episode by episode, Netflix has always offered audiences total control over their viewing schedule.
Some find it difficult to grasp how the seriality of House of Cards can work if all episodes are available at once. Seriality as a narrative strategy has been around at least since the Odyssey followed the Iliad, but in the modern era it has also functioned to ensure the maintenance of a revenue stream. Serialized novels enticed readers to buy the next issue of a magazine; serialized films tempted viewers to buy another ticket the next week; and serialized comic strips encouraged readers to buy a newspaper daily. By the early 1930s serialized radio dramas helped ensure that audiences would tune in daily to their “soap opera” and the soap advertisers’ messages. More recently, serials such as The Sopranos helped build HBO subscribers’ loyalty.
Why, then, create House of Cards as a serial at all, if Netflix does not need to tempt audiences into repeated scheduled viewings? Probably because open-ended episode structure is still one of the best ways to encourage viewing of more than one episode. Increased viewership overall would help amortize the show’s high production cost–not because Netflix earns revenue on how many viewers see each episode but because viewer engagement will likely lead to more subscriptions to the service.
Netflix’s willingness to give the audience control over serial viewing challenges assumptions that the best way to control program costs is to eke out episodes over time, measuring demand, and then raising and lowering prices in response. Netflix will track viewership, not to adjust airtime prices for advertisers but to measure subscriber demand and, it hopes, an increase of subscribers. Like HBO’s move into original programming, Netflix’s strategy is risky, but it is designed to attract subscribers to its streaming service–not necessarily to a particular program. No doubt audience control of the pace of narrative consumption will affect social media conversations. But this strategy also challenges the necessity of synchronous viewing as a business model, a model based on the limitations of legacy technologies rather than on some inherent quality of seriality.
Netflix’s current business model also depends on the survival of advertising-supported networks, which are selling programming to Netflix as a new aftermarket. Thus, Netflix is not aiming to destroy linear ad-supported programming. Advertising revenue subsidizes far more programming than Netflix can currently plan to produce on its own. Instead, by offering a new profitable aftermarket for programming initially financed through advertising revenue, Netflix may become commercial television’s white knight. Netflix’s ability to expand offerings of commercial television programming will depend in part on its ability to keep attracting new subscribers. Offering viewers the option to binge, or watch multiple episodes in a sitting, or watch them over a longer time frame, may be Netflix’s best bet for attracting new subscribers.
The full significance of House of Cards, as an indicator of new business models and evolving cultural forms, is yet to be determined. Is it too much to hope that Netflix’s simultaneous release of a season’s worth of premiere episodes is a harbinger of unprecedented audience leverage in an industry too long accustomed to bottleneck control over audiences?