Why Netflix's House of Cards Gamble Is Paying Off

Moneybox
A blog about business and economics.
Feb. 21 2013 9:33 AM

House of Cards Is Paying Off for Netflix

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Netflix Chief Content Officer Ted Sarandos poses with Kevin Spacey at Netflix's House Of Cards premiere

Photo by Jemal Countess/Getty Images

I'm pleased to see some data supporting my hypothesis that House of Cards is a ploy by Netflix to prop up its new brand identity as a quasi-network. According to a survey by Cowen and Co. released last week, 86 percent of Netflix subscribers said having the access to watch House of Cards makes them less likely to cancel their subscriptions.

One important caveat is that a majority of subscribers surveyed also said they'd cancel their Netflix subscriptions if Netflix raised its current $7.99/month price. So Netflix can buy brand loyalty, but it comes at a (lower) price.

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And, as David Lieberman points out, it's important to be mindful of the sample size:

Only 346 of the 1,229 U.S. consumers surveyed on February 12-13 are Netflix customers, although another 223 are classified as non-subscribers who have access to a Netflix subscription. About 10% of subscribers and those with access to Netflix viewed at least one episode of House Of Cards in the first 12 days after it became available. The average person who tuned in watched six episodes over that period, but 19.4% watched all 13.

Aside from the sheer viewing numbers, Netflix will get another way to see just how successful its House of Cards experiment was, since streamed shows will be eligible to compete with broadcast TV shows at the Emmys. Factor in Netflix giving the highly anticipated new season of Arrested Development the same House of Cards treatment and releasing all the season's episodes at once in May, and it adds up to a win for Netflix.

Emma Roller is a Slate editorial assistant. Follow her on Twitter.