Netflix Throws Down the Hammer

Hoping to shake its derisive "rerun TV" tag, Netflix (Nasdaq: NFLX  ) is starting to promote the first original series for its streaming service.

Netflix uploaded a trailer for Lilyhammer on a new NetflixOriginals channel on YouTube this week. The series stars Steven Van Zandt -- Bruce Springsteen's former guitarist, who earned accolades on The Sopranos -- as a mobster sent to Lillehammer, Norway, as part of the witness protection program after ratting out a mob boss.

If you don't want to check out the trailer, let's call this The Sopranos meets Northern Exposure. The first season will play out over eight original episodes starting on Feb. 6, 2012. Let's hope that premiering the day after the Super Bowl doesn't mean that Netflix will be springing for a costly commercial to promote the series during the big game. Netflix isn't exactly made out of money these days.

Lilyhammer is just the beginning. House of Cards -- the ballyhooed project headed up by David Fincher and Kevin Spacey -- will debut on Netflix later this year. The revival of cult favorite Arrested Development should come next year.

Original programming, or at least shows that originate on Netflix before being made available anywhere else, will go a long way toward justifying Netflix streaming subscriptions. Instead of relying on reruns of past seasons -- Netflix's typical licensing strategy when it comes to television shows -- it will be ahead of the pack.

Clearly this is a risky strategy. If a show's a dud, Netflix is stuck until the next series comes around for a shot at redemption. However, piece by piece, Netflix is becoming HBO and Showtime for thinking couch potatoes.

There's nothing wrong with Time Warner's popular premium movie channel, and it's not fair to compare Netflix's first-run shows to the success that HBO has had with Curb Your Enthusiasm and Game of Thrones. CBS' Showtime has introduced us to Dexter and Weeds, while Netflix is still weeks away from its first true test.

However, HBO and Showtime are only available as premium services on top of already chunky cable and satellite television services. There's no way to get HBO or Showtime without paying a lot of money first. Netflix is a stand-alone offering at a fair $7.99 a month price.

If Lilyhammer is able to generate positive buzz when it debuts next month, how long will it take for those who swore off Neflix this past summer to come back? It's going to be a long road back to redemption for Netflix after all that's transpired in recent months, but that road apparently runs through Norway.

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Motley Fool newsletter services have recommended buying shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz has been a Netflix subscriber and shareholder since 2002. He does not own shares in any of the other stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (6) | Recommend This Article (6)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2012, at 11:14 AM, nhalden wrote:

    They will need a lot more than a few ( I think 3 right now) original shows. NF is not a studio or "channel" They cannot demand premium dollars for this content. I suppose HBO and SHOWTIME are actually doing the same thing but then again you can see brand new movies and not old ones or crap movies (Cyborg 2 and 3 for example)

    This is yet again another problem with Netflix...they don't know who or what they want to be. Compete with the HULU's of world with TV series on streaming. Compete with BLock Buster with DVDS (which they want to get out of) Compete with Premium cable for original content...I mean come on.

    Right Now NF has to draw a line in the sand and take a stance.

    As for me, I really think they will be bought after this quarter or next.

  • Report this Comment On January 04, 2012, at 11:28 AM, TMFDukenewkirk wrote:

    "This is yet again another problem with Netflix"

    Really? You're expecting a lot more for $8/month? Who else is offering you more for that?

    Imagine for a moment, you're not someone who cares one bit whether you watch particular shows or movies this year or a year or two later, and you're choices are $50/month or $8. I'm not one of those, it's worth a premium to be current for me, but it's too narrow minded to think there's not an audience for what NFLX is offering, and a big one at that.

    When I look at a company and consider investing, I don't think of the entire world as looking at the world exactly the way I do.

  • Report this Comment On January 04, 2012, at 3:00 PM, racchole wrote:

    Netflix still offers an excellent service for anything but "premium dollars." Last time I checked, paying $160 per month for cable from *insert cable company here* is my idea of premium dollars. Paying $10 for everything Netflix has to offer is, in my opinion, a steal.

    It is a sad state of affairs when people pay chump change for unlimited access to Netflix's library (whether you love or hate their selection) and feel like they are getting ripped off.

    If Netflix is even just a little bit competitive in the content wars, it will have staying power for a long time. The content war will dictate the valuation of this company and its prospects. Right now, there is no way to valuate it.

  • Report this Comment On January 04, 2012, at 5:25 PM, ejclason2 wrote:

    If you are willing to wait a couple of years for a particular show, it will probably be broadcast free over the air and you can recorded it on your DVR.

  • Report this Comment On January 06, 2012, at 2:49 AM, lowmaple wrote:

    2 years is TOOOO long and DVDs cost money

  • Report this Comment On January 06, 2012, at 3:20 AM, Melaschasm wrote:

    I am one of a growing number of people who has cut the cord. Between hulu. cbs.com, and netflix I get all the tv and movies I want.

    While there are a few shows I would enjoy that are not available live, it is a small price to pay for saving more than $1000 per year.

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