The question got me interested, and so I decided to do some counting. One with like 100 levels! Do you think we could collect enough coasters from the tables around here?”. At one point he said to me: “I want to build a reeeally tall house of cards. “If you bring a show to HBO you get people that have helped create hits and know what they’re doing,” Martin said.When I sat at our family dinner on Saturday, I watched my cousin build a house of cards from coasters. Interestingly, a person close to the company said Netflix, unlike other programmers, is not interested in being involved in the creative process of making content, including casting and scripts. “In the world of production you increase the risk, but also the reward.” “Netflix is used to paying for stuff that’s valued-based on how the market has already responded to it,” observed Wible. “No way they will get access to a hit show unless it is by accident.’ ‘They could be paying a very high price tag for content that does not find an audience,” said Laura Martin, an analyst with Needham & Co. Some industry analysts fear that Netflix could be taking too big a gamble by swimming in unfamiliar waters. “It’s hard to see how that kind of economics can fit into a service that charges $8 or $10 a month because the math doesn’t work,” he said, citing the lowest prices Netflix charges customers. Time Warner chief executive Jeff Bewkes, whose HBO is directly threatened by Netflix, has been particularly outspoken in his criticism of its business model. On the other hand, Netflix has drawn the ire of some in entertainment industry who feel it is undermining traditional business models. Going into original programming could also mean a new buyer for content, which would also be good news for the studios. On the one hand, Netflix has become a prominent buyer of Internet streaming rights, committing billions of dollars in recent multiyear deals with distributors Epix - the cable network with rights to movies from Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer - as well as with CBS Corp. Hollywood has a love-hate relationship with Netflix. Janney Capital Markets analyst Tony Wible estimated that for Netflix to renew the agreement, which expires in early 2012, it would have to increase the amount it pays from approximately $30 million per year to $300 million. Most striking is that as part of the deal being discussed, MRC would not have to make a test episode or pilot, according to people close to the talks. Netflix is in talks with independent producer company Media Rights Capital that call for the company to commit to 26 episodes of the show at a cost of tens of millions of dollars. “House of Cards,” a remake of a 1990 British miniseries, won’t come cheap. Unlike traditional broadcast and cable networks, Netflix won’t be scheduling the show on a certain night and time or running ads to promote it. If Netflix goes forward, it could be the most prominent test of whether a traditional multimillion-dollar star-laden show can succeed on an Internet platform where people watch when they please and may only learn about the show if a computer algorithm recommends it. Now, instead of selling established content, it wants to get into the riskier game of hawking its own original fare. Netflix has succeeded primarily as a distributor of previously released movies and television series and has more than 20 million subscribers. The talks are already raising eyebrows in Hollywood and on Wall Street. Should the deal close, it would represent Netflix’s first foray into original programming.
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