And the Emmy Goes to… Netflix

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And the Emmy Goes to… Netflix

Hollywood is a Pacific Time kind of place, but that doesn’t mean it sleeps when the Academy of Television Arts and Sciences announces its Emmy nominations. In the early morning of the East Coast, agents, managers, studio executives, actors, publicists and other players in the dream factory wake up bleary-eyed at 5 a.m. to catch the broadcast.

In a town renowned for equal parts glamour and cold-blooded competition, the Emmys are serious business. But this year’s nominees drew particularly interest: Netflix, which ramped up original programming, like “House of Cards” and “Arrested Development,” over the past two years, launched a serious push for awards consideration. But how would it stand against broadcast heavyweights HBO, ABC and Showtime?

“It’s fun to be hosting the TV show that announces nominees for TV show awards for a TV award show on TV,” joked Neil Patrick Harris, host of the Emmys.

The answer came on Thursday at 5:35 a.m. Pacific Time. “Our first category is lead actor in a drama series,” said Aaron Paul, co-host and actor in Breaking Bad. “And the nominees are Hugh Bonneville, Downtown Abbey; Bryan Cranston, Breaking Bad; Jeff Daniels in the Newsroom; Jon Hamm, Mad Men; Damien Lewis, Homeland and… Kevin Spacey, House of Cards.”

Netflix had done it: House of Cards also landed major nominations in prestigious categories like Outstanding Drama and Best Actress in a Drama for Robin Wright. It’s the first time the Academy nominated any series originating on non-traditional TV in any major category.

But the coup signifies a bigger shift: the sea change that’s shaking up entertainment is solidifying, and new media like Netflix is at ground zero of the next-generation of entertainment — and they’re only going to pick up steam.

Racking It Up

Netflix netted a total of nine nominations, including an award for House of Cards director, Academy Award nominated David Fincher, and three for its revival of cult comedy Arrested Development, including Best Actor in a Comedy for star Jason Bateman. It even snagged two for its lower-profile horror series “Hemlock Grove,” produced by Eli Roth.

Netflix campaigned hard the awards. But true to its “new kid on the block” status in hierarchy-conscious Hollywood, it did it in its own way. In early campaigning, it offered free limited subscriptions in lieu of sending DVD screeners to voters, according to The Atlantic Wire.

It also embarked on an unconventional lawn-sign campaign. Netflix went door-to-door in upscale Hollywood neighborhoods with a high concentration of voters, reported, giving yard signs to tout its shows in exchange for free six-month subscriptions, Red Cross donations or a $50 American Express gift card.

Like most of Hollywood, Netflix also hosted social events, including a free lunch from the Rollin’ Rib BBQ food truck.

All that campaigning paid off. The nominations will generate new interest in House of Cards, sending a surge of binge-watchers to the site again. What’s more, Netflix can now add “Emmy-nominated” to its marketing. But the biggest advantage is the branding boost and halo of legitimacy.

When Netflix expanded into streaming in 2007, rivals regarded it as a minor player since the Internet was an untested distributing pipe. As it took advantage of cheap licensing from studios and networks, building up a library of shows and movies, it made no secret of its aim: streaming was its future.

Netflix’s profit and influence grew and it began to spend hundreds of millions to secure exclusive deals, outmaneuvering rivals like HBO and Showtime for choice content. Larger industry dynamics also began to change. DVD sales, long a major source of its revenue, began to fall — including a steep 20 percent drop in 2011, according to Digital Entertainment Group. Meanwhile, streaming revenues surged, as viewers increasingly turned to the Internet.

Hollywood got nervous, and power-players like HBO and Time Warner started to withhold their best content, beef up their own streaming services and speak out against Netflix’s growing influence.

Partly based on necessity, Netflix took a page from HBO, which shifted from an outlet for movie reruns to its own shows of the highest caliber. It began developing original programming, and the opening salvo of its strategy, quirky crime comedy Lilyhammer, garnered attention and praise.

But Netflix didn’t make a splash until House of Cards, a prestige project stacked with Oscar-caliber talent. Paying a then-unheard-of $100 million for a mere two seasons, the gamble, which raised eyebrows, is clearly paying off. By building entertainment franchises, it’s moving to become the HBO of the Digital Generation.

History Repeating

The nominations are more than just bragging rights — it’s a sign that the Internet is a powerful force shaping audiences, tastes and industry practices. But not everyone is comfortable. As TV critic and reporter Bill Carter noted in the New York Times, “More than anything else, Netflix’s arrival in the Emmy mix is disquieting to some broadcast and cable executives because it is probably only the beginning.”

According to the Hollywood Reporter, FX CEO John Landgraf criticized the way Netflix does business, blasting it for withholding meaningful metrics, such as the number of viewers that watch its shows. Since Netflix doesn’t run ads, it doesn’t need to conform to industry practices like Nielsen ratings.

The company’s arrival signals smaller, incremental changes to Internet-based entertainment made by the industry at large. In 2008, the Academy amended rules to consider Internet programming for all major awards. But outside of a few nominees in short-form categories, new media hadn’t stepped up to the plate until House of Cards.

The situation actually mirrors the slow but spectacular arrival of cable of the late ’80s. In 1988, the Academy amended rules to include original cable programming in awards consideration. But cable didn’t actually start making waves until a decade later, when HBO’s “The Sopranos” gained attention. By the early 2000s, shows like “Curb Your Enthusiasm” and “Sex and the City” entered the mix, picking up their share of awards.

“Netflix — and its peers and rivals like Hulu, Amazon Prime and YouTube, who are also ramping up original content — are still some ways from becoming the new HBO and Showtime of the digital era,” John Leverence, senior vice president of the Academy, noted in the New York Times.

This year, cable shows like “Breaking Bad,” “Downton Abbey,” “Homeland,” “Game of Thrones” and “Mad Men” dominate the nominations. But while the best of TV is just a cable subscription away, over the next decade, it may be only a click.

In It to Win It

Creating quality to go up against HBO’s best takes significant cash and resources. And even in the age of the viral videos, it takes time to build audiences and brands. In a sense, opting out of the weekly ratings race is a disadvantage for Netflix. Since it releases all the season’s episodes at once, it misses out on the gradual buzz an incremental release can build.

But Netflix also has unique advantages. As a technology company, it’s freed of a painfully slow development process that relies on primitive Nielsen ratings and traditional market research to greenlight shows. Instead, it makes decisions based on algorithms and data science, to understand what its viewers like, up to the second they click off a show, and what types of shows are likely to succeed.

It has already shown an appetite for speedy risk-taking: after the release of Arrested Development last month, talks for a second season are already in progress, according to Rolling Stone.

And finally, you can’t discount Netflix’s cheaper subscription rate, compared to cable packages that often balloon to over $100 a month. Netflix gained even more subscribers earlier this year, according to CNN, and the halo from the Emmy nominations will surely entice more to cut the cord and sign up.

Will Netflix pull off an actual Emmy win? It’s up against stiff competition, but in this case the show-biz cliche is likely true: the nomination is the award. And Netflix is already pushing ahead to garner more recognition in the future. Its latest show, prison dramedy “Orange Is the New Black,” is making waves among critics and audiences alike, underscoring another strong Emmy contender next year.

Meanwhile, projects in the pipeline, like next year’s “Sense8,” a sci-fi show involving the Wachowski siblings, who famously helmed “The Matrix,” is already generating buzz online, as well.

Netflix is just getting started, and as streaming evolves and finds its footing, it’ll continue to transform entertainment and expand the definition of “must-see TV.”

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