News Column

'House of Cards,' 'Arrested Development' Could Change TV World

May 26, 2013

Maria Sciullo


Netflix's critically acclaimed "House of Cards" was one of the biggest success stories on television this winter -- or not.

Numbers don't lie, but in the case of online series, viewership figures often are unavailable, which means the definition of "success" is relative. If even half of Netflix's 29 million domestic subscribers watched the original series, it can be argued that in a traditional TV ratings sense "House of Cards" did very well, indeed.

The resurrection of beloved cult favorite "Arrested Development," which Netflix launched in the wee hours of this morning, also is expected to be a surefire success.

Netflix knows from its metrics exactly who is watching, how often and for how long. But it isn't saying and, at least for now, does not stand to gain by doing so.

The traditional television model has long relied on measuring how many people, and what demographic, are watching. The broadcast networks are able to charge higher fees to advertisers based on statistics provided largely by the Nielsen Co., a practice adopted by cable networks.

Premium cable networks such as HBO and Showtime don't rely on advertising, but Nielsen charts their viewing figures, too.

"It's not just about advertising. HBO does not have advertising. But it matters that 'True Blood' is a huge hit. It matters, right?" said John Landgraf, president and general manager of FX Networks.

Mr. Landgraf has long been an outspoken advocate for transparency in online viewing numbers.

" 'True Blood' is a massive hit. 'Treme' is not. 'Treme' is fantastic, creatively, but 'True Blood' is on the cover of [Entertainment Weekly]. 'Treme' is not.

"Why? Because there is [ratings] data that 'True Blood' is a massive hit, that there's a tremendous fan base out there."

Mr. Landgraf has likened ratings figures to "report cards," and report cards, he said, "keep you honest."

"[Netflix wants] to proclaim themselves if something is successful or not successful."

Numbers game

A spokesman for Netflix recently said the network doesn't have any plans to release numbers on show performance. Yet shareholders caught a glimpse of where the big-name shows such as "House of Cards" and "Hemlock Grove" fall in terms of company approval.

In Netflix's 2013 first quarterly earnings letter, the shows were praised for not just attracting viewers, but also raising the company's status on social media:

"The high level of viewer satisfaction implies we are able to target the right audience without the benefit of existing broadcast or cable viewing data and the strong viewing across all our markets gives us faith in our ability to create global content brands in a cost-effective, efficient way."

Netflix allows new users to try the streaming service for one free month. Some investors were concerned that viewers would sign up, watch all of "House of Cards" during that month, then quit.

According to the earnings letter, "There was very little free-trial gaming -- less than 8,000 people did this -- out of millions of free trials in the quarter."

The report indicated that if "House of Cards" was a hit, then "Hemlock Grove," written and co-produced by Pittsburgh native Brian McGreevy, did even better: " 'Hemlock Grove' was viewed by more members globally in its first weekend than was 'House of Cards' and has been a particular hit among young adults."

Until the 1987-88 season, cable television shows weren't eligible for Emmy consideration, and instead programs vied for CableACE awards. Online shows are eligible for Emmys and it will be interesting to see if any are nominated in the July 18 announcement.

"Arrested Development" was a winner for outstanding comedy series during its initial run on Fox, and "House of Cards" and stars Kevin Spacey and Robin Wright would not be surprise nominations.

Netflix, a company formerly associated with red-and-white DVD mailers, is on its way toward producing quality shows that will be part of the brave new world of "TV Everywhere."

Last year, NBC and CBS proved with the Olympics and the Super Bowl that networks could make a profit through conventional broadcasts, even while people also were watching the events live on computer screens and mobile devices.

The second-screen concept of sharing comments and information as it airs on TV is no longer novel. Next up is a broad adoption of watching everyday live TV on mobile devices.

ABC has created the Watch ABC platform for on-demand playback as well as live network streaming. The test program will roll out shortly in limited markets such as Philadelphia but should arrive in Pittsburgh before the end of the year.

At the same time, networks have struggled to work out advertising rates for programs that are no longer just on the conventional TV screen.

Geri Wang, ABC president of ad sales, recently described at the annual New York upfronts the network's new ABC Unified program. It allows advertisers to buy time for all screens in one streamlined process.

"We make it easier for advertisers to plan, buy and reach their audience."

The average viewer doesn't care about advertising -- other than, perhaps, wishing it would go away -- but he or she does want to know what other people are watching.

The Nielsen Online Ratings Campaign already measures viewing habits on laptops and tablets and recently announced it will expand to include mobile apps.

In April, the pilot program Nielsen Digital Program Ratings -- which will measure audiences for TV content viewed online -- was announced with partnerships with television's A+E Networks, ABC, CBS, The CW, Discovery Communications, Fox, NBC and Univision, as well as AOL.

The program, which runs through July, employs the same methodology used in its online ratings campaign and will provide stream counts and information on who is watching these providers online.

In a statement, Alan Wurtzel, president of research and media development for NBCUniversal, said, "The potential to measure video viewing of specific programs on linear TV as well as the Internet is significant."

Cross-platform measurement, he added, is "the holy grail."

As with traditional television, giving content providers more accurate viewing information means more accurate ways of establishing advertising rates.

From online, to on TV

Short-form video that began as online content has made its way to television networks, including Yahoo!'s dating show parody "Burning Love" on E! and "Children's Hospital" on Cartoon Network.

Episodes of AOL Auto's "Translogic" were picked up this winter by the Fox Sports Media Group to run on its Speed Channel. Another AOL series, "Playdate," seems tailor-made for TV, with Stephanie Lemelin as a young mom in a new neighborhood, trying to negotiate the politics of the playground.

Think "Desperate Housewives" crossed with "Little Children."

"The expectation on TV is long-form, but on the Web, what we are focused on is the quality of the production using a [different] format that users expect and actually prefer," said AOL's Karen Cahn, general manager of business and product strategies.

She said success is not measured strictly in online viewer numbers, but also in terms of social engagement and in viewing engagement across other platforms.

Even YouTube, which began as a do-it-yourself site for videos of silly cats and wannabe rock stars, is testing the digital waters with paid programming. About 30 groups, including the Children's Television Workshop, are charging a monthly fee that begins in the $1.99 range.

YouTube isn't going to compete with broadcast networks, but it is a possible threat to companies such as Netflix and AOL. In a recent interview with the Canadian Press agency, Netflix CEO Reed Hastings said it's on the radar.

"Their ad-supported content is hugely viewed, and so they're a competitor for time -- we break people up into competitors as competitors for time and competitors for content. We don't compete with them for content. They don't bid against us for the type of content we have.

"But when a person wants to relax, sometimes they'll watch some YouTube and sometimes they'll watch some Netflix, and in that sense we compete for how people relax."

FX's Mr. Landgraf said his frustration stems not from dealing with the competition, but that the competition isn't allowing consistent comparisons to be drawn.

Nielsen ratings are not perfect, he said, "but it's the currency we all have to live with."

Maria Sciullo: or 412-263-1478 or @MariaSciulloPG.


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