Netflix's Hastings Sees 'House of Cards' as Long-Term Investment

CEO says they won't know true value of series until it returns for season two

By Tim Baysinger -- Broadcasting & Cable, 2/25/2013 7:49:24 PM

Netflix CEO Reed Hastings sees the company's first foray into original series, House of Cards, as more of a long-term investment than a short-term payoff.

Speaking during a Morgan Stanley media and technology investor conference Monday, Hastings cautioned that he doesn't want investors to read too much into House of Cards' performance, noting that it is just one small part of Netflix's offerings. "It will be a big part of our press, and it is already, [but] that doesn't mean it's a big part of the total viewing or why a subscriber joins."

He argued the real value of Cards won't be determined until it returns for its second season. "In the beginning, you're really establishing a franchise," he said. "Most of us, there's so many new shows developed, that we wait and see." He did say however, that he was very pleased with the show's early returns, though didn't give any concrete data. "House of Cards has been a great success for us, as we'd hoped."

With the critical acclaim that House of Cards has received, Hastings isn't putting additional pressure on some of the other original series that Netflix has on tap for the rest of the year. "We really have a very broad set of demographics within the Netflix service," he said.

In the case of the thriller Hemlock Grove, which is executive produced by horror-maven Eli Roth, it may have to settle for being a "cult hit." Hastings is just fine with that, as long as the core audience remains loyal. "We're going to push the boundaries on lots of different content," he said. "It's not all programmed at one taste."

In fact, according to Hastings, that is one major advantage that Netflix has over its broadcast counterparts. "With broadcast television, they have to have a mega-hit, where it gets one of the primetime slots, or they kill it," he said. "We're not programming to the limited shelf space of broadcast television."

Hastings also spoke about the upcoming revival of the critically acclaimed but low-rated former Fox comedy Arrested Development. He called it "unique" to Netflix's other properties because it already has a built-in audience.

He reiterated that the upcoming season will likely be a one or two-year deal. "We don't anticipate being able to do seasons five, six and seven," he said. "We have less of a stake in it."