For Netflix at the Emmy awards: No wins, no matter
The Internet TV provider misses out on the most high-profile Emmy awards it could have won after its nominations broke ground for online programs, but walking away without those statues isn't losing much.
In "House of Cards," protagonist Francis Underwood is willing to kill to get what he wants. Thankfully, in Netflix's Emmy aspirations, life won't imitate art. (We assume.)
Netflix, the online subscription-video streaming service, lobbied hard for its original programs like "House of Cards" to make it onto the awards short list -- covering Los Angeles with yard signs and BBQ food trucks under a moniker pulled straight out of the "House of Cards" scripts. Now that the red carpet is getting rolled up without Netflix polishing the most talked-about statues that were handed out Sunday night, the company isn't left with the same kind of egg on its face that Underwood kills to wipe away.
By losing out on the awards that generate the most buzz, though, Netflix may have even gained some budget-negotiation wiggle room, and it's already winning by a league on one front that is coming to the fore -- mobile viewing.
Netflix wasn't left completely out in the cold. "House of Cards" notched one award Sunday, with David Fincher winning an award for best directing in a drama. The series also won two Creative Arts Emmys -- for casting and another for cinematography -- a ceremony prior to the main event broadcast Sunday evening.
Fincher, who has been nominated for Oscar directing honors twice, directed the first two "House of Cards" episodes. Though his attachment to the project brought it undeniable bona fides, Fincher's attachment to an Emmy for the series isn't the kind of win that stokes water cooler talk -- or its equivalent of today, tweets -- to the same degree that best drama or best lead acting awards do.
And driving that kind of word-of-mouth discussion is what reels in new customers. Original shows and films are the rage among online video services, with the likes of Hulu and Amazon also investing in series. Their aim is to evolve beyond their catalog of older movies and television shows into a programmer akin to an HBO or Showtime -- an exclusive destination for edgy shows that drive water cooler chatter and, ultimately, new subscriptions.
It's hard to disappoint low expectations
On the most basic level, Netflix didn't lose much by losing on a major Emmy. Though Netflix's nominations for high-brow Emmy awards went unfulfilled, Emmys are, after all, elusive.
HBO, which has dominated the nominations in recent years, didn't win its first Emmy until 2001 after years building up original programming throughout the '90s.
This year marks only the second time Netflix had any shows eligible to be in the running.
"It is very hard to create a program of the quality to win an Emmy," said Lucy Hood, the chief operating officer of the Academy of Television Arts & Sciences, which manages the awards. "It's about creative excellence. Winning an Emmy confers credibility, a standard of excellence...The great producers and directors and writers of today are obviously very interested in being acknowledge by their peers."
It's also hard to disappoint upon middling expectations. In the hours ahead of the start of the awards show, "Breaking Bad" was the odds-on favorite to win the award for outstanding drama series, according to online sportsbook Bovada. "House of Cards" odds were in the middle of the pack, as were the odds for stars Kevin Spacey and Robin Wright to win in the lead drama acting categories.
Jason Bateman, nominated for lead actor in a comedy in Netflix's revival of "Arrested Development," had the same odds as Matt LeBlanc in "Episodes." Suffice it to say, they weren't the bookies' favorites.
Had Netflix beat odds and won in those categories, the ultimate impact on its business was foggy at best. Oscar nominations and wins tend to have a direct boost to box office receipts, but the Emmys' effects for winners is less clear.
Is it losing if nothing's lost?
Missing out on an Emmy, has even less clarity on the downside.
"If they win an Emmy, I actually think it has very little benefit in terms of the consumer becoming interested in the show," said Michael Pachter, an analyst for Wedbush Securities. Missing out, he said, likely means even less to consumer interest.
And while winning Emmys would have have helped attract talent for other original programs, winning may have also attracted harder negotiations to license an award-winning show.
Though Netflix paid a reported $100 million to be the exclusive distributor of 26 episodes "House of Cards," winning an Emmy for one of those first two season could be used against the company at the bargaining table, Pachter said, noting a win makes the licenses to later seasons more valuable.
Independent studio Media Rights Capital, a production house behind Netflix's "House of Cards," originally purchased the rights to turn the original, British incarnation of the show into a Washington-set story.
"Anything that has 'capital' in its name, if you think it's not in a business to make money, you're crazy," Pachter said.
In the lead with the next generation of television viewers
Though it failed to win the race for the top-tier Emmys this year, Netflix leads its traditional television brethren on the new frontier of television, that for burgeoning mobile viewing.
Altman Vilandrie & Co., a strategy consulting group, found in is latest annual survey on consumer video habits that 80 percent of consumers under 35 and nearly half of older viewers are watching TV shows and movies online weekly. Mobile device viewing is exploding, it said, with the percentage of those watching TV and movies weekly on a smartphone tripling since 2011, from 5 percent to 14 percent in 2013.
"When you look at the types of services that people are using across all internet connected devices, over-the-top viewing on tablets and smartphones, the most commonly used service by far is Netflix," Jonathan Hurd, who directed the survey.
Meanwhile, though all the major pay-TV providers offer some sort of TV Everywhere service -- which is television's answer to Internet-connected viewing -- only 32 percent of consumers said were aware that their TV operator offered it.
"Cable operators have not done a good job of making consumers aware that this ability of watching on tablets and smartphones exists," Hurd said. Caught up in a slow pace of technological change and hamstrung by complex licensing arrangments, cable risks losing the mobile viewing battle to Netflix and other online providers, Altman Vilandrie noted in its survey results.
Neil Patrick Harris, who hosted the awards this year, even cracked wise about the writing on the wall in his opening bit.
Television, he said "for the younger audience, that's the thing you watch on your phones."
Netflix's greatest Emmy potential may have remained out of reach this time, but the company, only a couple years into its original programming push, has the luxury of time for that younger audience to grow into the audience at large.
Updated at 9:13 p.m. PT: with further context.