House of Cards may have made Netflix's name as a source of must-see original content, but millions of Comcast customers aren't going to need Netflix to watch the show anymore.
In a deal with Sony, Comcast will now sell its subscribers access to the first season of the political drama through its own Xfinity Store, Variety reports. In Hollywood terms, the arrangement might not be anything remarkable -- just a new way of syndicating reruns. But cutting Netflix out of the picture for its signature show sends a clear signal that the entertainment and cable industries aren't about to let some Northern California tech company change television without exacting a price.
Thanks to the company's aggressive marketing, House of Cards is known as a Netflix show just as much as The Sopranos was an HBO show. But even the $100 million it reportedly spent didn't buy Netflix all the rights to Frank Underwood's Machiavellian rise. Apparently, that money gave Netflix only the exclusive right to stream two seasons online first, and it didn't even cover the total production costs of the first 26 episodes. The rest of the costs fell on Media Rights Capital, the independent studio that actually made House of Card, and it is free to sell other rights.
To make its money back, the studio has a deal with Sony to handle distribution of House of Cards internationally and for "home video," a term that in the Netflix streaming-video era seems meaningless. In practice, it means Sony gets to sell House of Cards DVDs and other ways for couch surfers to pay a la carte for the show, such as on Amazon Instant Video. That appears to be the kind of agreement Comcast struck with Sony, which also lets the cable provider offer access to Sony movies such as American Hustle ahead of other video-on-demand services.
For Comcast, the movies seem like the meat of the deal, while the House of Cards arrangement is more about sending a message to Netflix and the general public. The rise of Netflix and other streaming services have encouraged the rise of "cord-cutting," which threatens the cable business, and Comcast isn't taking this laying down. Recently, Comcast exercised its own leverage by getting Netflix to pay for more direct access to Comcast's network, and now, the cable giant to making another move with its House of Cards deal, showing that it can cannibalize Netflix's business right back.
Not that a swarm of Comcast customers are about to go out and spend money to watch House of Cards somewhere other than Netflix -- or at least they shouldn't. It's not clear how much Comcast plans to charge. But on Amazon, for instance, high-definition episodes are $2.99 a piece, or nearly $39 for the whole season. That's almost as much as five months of Netflix, which also includes season two, as well as Orange Is the New Black, another Netflix hit coming to Comcast soon. But just by making House of Cards an option, Comcast is eating into the brand identity Netflix is trying to establish for itself as the only place to watch "its" shows.
Original programming has become crucial to Netflix's business model. By getting House of Cards, Comcast sends a subtle signal to Netflix non-subscribers that maybe they don't need to spend that extra eight dollars a month after all. They might not actually pay Comcast to watch House of Cards either, but just knowing they could get the show there might be enough. On the other hand, if anyone does watch the first season of House of Cards on cable, Netflix still has a powerful advantage: the siren song of season two.
