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
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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."

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