The company that hit it big with DVDs is now creating original content.
The company that hit it big by renting DVDs by mail and more recently, by streaming movies into the home, is about to move into territory reserved for TV networks. Next year, netflix will begin to offer some of its own original content. Netflix started with DVD rentals by mail. Then, last year, the company's movie streaming option caught on big time with many of its 20 million subscribers.
Caroline McCarthy of CNET.com says "overall, Netflix has been on a huge roll. They've blown away everybody's expectations and they've played the cards so well."
But the company's newest card is actually "House of Cards". That's the title of a big money, 26 episode political drama series Netflix plans to launch late next year.
Oscar winner Kevin Spacey will star in and produce what will be Netflix' first original series, one they outbid traditional broadcast and cable networks to get.
Caroline says "I think this is a big, big gamble for Netflix."
The move comes as Netflix's dominant position in movie delivery faces new challengers including VuDu and Amazon.com.
Lindsay Powers of The Hollywood Reporter says "it really sets the company apart in what becomes an increasingly crowded field with streaming."
But changing Netflix's menu of offerings could lead to changing its subscription model, which starts at $7.99 a month.
Lindsay says "if it's going to start paying more money to create original content, and to acquire more content, then it may eventually have to charge its subscribers more money."
Original content also introduces Netflix to a challenge TV networks face enticing people to watch.
Caroline says "by investing so heavily in a really big budget production like this, you have to wonder if they're going a little bit off course."
But Netflix is trusting its "House of Cards" will provide a solid foundation for future growth. Adding to the risk for Netflix is that it's locked in to 26 episodes of "House of Cards" over two seasons, regardless of how the show fares audience-wise.
Also, in a sign networks are noting the new competition, the Showtime cable channel says it'll pull early season episodes of its series, Dexter and Californication from Netflix's streaming service by the middle of this year. That word coming from Crain's New York Business.