Netflix Picks Another Winner: Marvel
Netflix’s algorithm machine picks another winner: Marvel. Last week Marvel announced the development of 4 new series for Netflix . This announcement attests to Netflix’s strategy of creating content from established brands. A strategy that has long been used by all major studios. It’s nothing new or complicated. It’s the simplest business question: Who is your audience and what do they want?
This decision was more than likely aided by the success of ABC’s ‘Agent’s of S.H.I.E.L.D, but we can be sure that there was much research going on before. Netflix has more data on its users than any studio or network has ever had. This gives Netflix the luxury of using ‘big data’ to make content decisions. Netflix doesn’t have to spend millions in advertising to make you watch their shows, because they know exactly what you are watching. To find how it uses data check KissMetrics and Gigaom.
‘House of Cards‘, ‘Arrested Development’ and ‘Orange is the New Black’ have one thing in common: “An Established audience”. Marvel falls into the same category of having an incredible established audience. The chart below shows the all the Marvel movies and their box office numbers. A multi-billion dollar brand definitely has an audience. (Numbers don’t lie) ABC’s ‘Agent’s of S.H.I.E.L.D success has proved that the audience has not grown tired of super heroes. Anyone who thinks otherwise can take a quick look at ratings and read what THE FOOL has to say.
Obviously this whole project can fail. We have seen two enormous failures from Marvel’s parent company, Disney. Last year John Carter bombed, and The Lone Ranger flopped this year. Both projects were based on established brands, but still failed. However, with less money involved in TV the stakes are reduced. TV does not need the 100M+ budget that feature movies need. TV has a very different model from the movie business. Movie’s need to recover their money during the first month or else it might not ever generate the sufficient revenue.
Large tech companies like Google, XBox and Amazon are all racing to enter the digital content space. Having original content from Marvel gives Netflix a great competitive advantage. The closest competitors to Marvel is DC comics. Unless Netflix’s competitors partner with DC Comics, Netflix will have an upper hand. Of course new super heros can be developed. (HULU developed a original series, The Awesomes). However, this takes time that would give Netflix a head start on market share.
Disney probably factored in revenue from lesser known characters when they acquired Marvel in 2009 for $4 billion. This might be a a strategy test run for the newly acquired Star Wars universe. 3 new movies are planned with additional standalone character projects.
While you wait for Marvel’s new shows to be created, check out Hiflix’ Marvel/Netflix character analysis here.