Does House of Cards Generate Revenue for Netflix?

The success of House of Cards on Netflix has been a subject of much discussion, especially regarding its financial impact on the streaming giant. While there is no official data on the show's ratings, several sources suggest that it performs on par with leading television networks like HBO and AMC.

Estimating Viewership and Revenue

Technically, a company called Symphony has claimed to approximate traditional TV ratings for Netflix shows. Although this method has not been verified, if Symphony's data is accurate, it indicates that Netflix's content is competitive with the best of traditional TV. Netflix's Vice Chief, Ted Sarandos, has stated in interviews why the company does not disclose ratings or streaming data for its individual shows, citing the reasons of strategic and contractual confidentiality.

Given the incredible growth of Netflix, the industry recognition, and the steep per-episode cost of both House of Cards and other high-quality shows, it is reasonable to conclude that Netflix places a very high value on its flagship series like House of Cards.

Revenue Impact

The positive impact of House of Cards on Netflix's revenue is evident in several key areas. For instance, in the first quarter of 2018, Netflix reported over $1 billion in revenue with nearly 30 million U.S. subscribers. The release of House of Cards in 2013, especially following its Golden Globe win, likely contributed significantly to these numbers.

Furthermore, the show's massive popularity meant it was renewed for a fifth season, signaling confidence in its continued success and revenue potential. Moreover, since Netflix owns and produces the show in-house, it can be released worldwide almost simultaneously, benefiting non-U.S. subscribers and expatriates, which further drives Netflix's subscriber growth.

Production Costs and Value

The production of House of Cards is no small feat, with each season costing millions of dollars. Netflix, recognizing the high costs and the need for flexibility, has moved towards a self-production model, reducing the need for contract negotiations with third parties, which can be cumbersome and costly.

The profitability of proprietary shows versus purchased content is a matter of debate. While producing a show like House of Cards is expensive, the flexibility and global distribution capabilities it offers are significant advantages for Netflix. The increasing competition in the media industry may allow premium programs to command very high prices, which can ultimately translate to better ROI for Netflix.

Conclusion

In conclusion, House of Cards not only generates revenue for Netflix through direct streaming but also contributes to the company's broader strategy of owning and controlling its content. The show's success is a testament to Netflix's commitment to producing high-quality, critically acclaimed content that resonates with a global audience.