House of Cards has proven to be a huge success for Netflix, quickly rising to become the most-watched content on the streaming service following its February 1st debut. But in the face of all that positive media buzz, Reed Hastings wants you to remember that Netflix is first and foremost a place where customers go to see licensed content. "I don't want you guys to think that suddenly we're the original content company," he told a crowd of investors today.
The CEO revealed that even as demand for House of Cards reaches a fever pitch, it represents a tiny percentage of overall viewership. "It's a great start," he said. "It's phenomenally successful for us, but it's not the center of the company." Hastings likened the situation to a licensing agreement his company once held with Disney, when the studio's extensive film catalog accounted for a meager two percent of customer viewing.
"I don't want you guys to think that suddenly we're the original content company."
To Hastings, the show's current success isn't nearly as important as the road it paves for the future "Over five years and ten years we'll build some really big franchises and it could become quite material," he said. But for now, Netflix's foray into original programming has "just begun" and the favorable reaction has been "a very nice confirmation of the premise that over the next couple of years we can build something very important."
"It's not that staggering is some alien concept."
"You want to think of House of Cards as a great downpayment on a potential to build some really important franchises," Hastings said. He also addressed Netflix's decision to release all episodes of the show's first season simultaneously — a tactic it will repeat with Arrested Development in May. "We didn't produce two seasons and give it all at once. We did it 13 and 13, so it's not that staggering is some alien concept." Rather, Netflix believes single seasons are the ideal way for subscribers to experience content. "We think the season is like the book and is the right unit," he said. "It's now a big point of differentiation." You can listen to the entire 35-minute chat at Morgan Stanley's website, linked below.