Netflix, Original Content, and Redemption

Netflix has today released the first trailer for its first original show, 'Lilyhammer,' thereby opening 2012 on a note of refreshing positivity. Following an unquestionably tumultuous 2011, Netflix has come out of the gates showing its willingness to modernize, to embrace its nature as a content provider, and to leverage its unique position in the marketplace, and I, for one, am a fan.

Journalists and onlookers frequently write Netflix off as a dying entity, but this sentiment is flawed.

In late 2011, I found myself writing about cable providers (and the endless negativity therein) all too often. Netflix is a potential solution for that problem. In fact, I'd go as far as to argue that the extensive coverage of cable providers in late 2011 is in direct correlation with the perceived failure of Netflix in the months prior.

Netflix, prior to the pricing changes and the Qwikster debacle, was viewed as an entity that could do little wrong. Paying relatively little and receiving a huge amount in return is an equation that all consumers could appreciate. Accordingly, forward-thinking consumers began to re-examine their television packages, and the means through which they watched their favorite television programs. Although this "cable cutting" phenomenon did not begin with Netflix, it was certainly aided by its existence.

As such, Netflix's stock continued to climb throughout the first half of 2011 -- eventually peaking just over the $300 mark.

Where does the stock sit now? Just over $72.

Moving simultaneously with this drastic collapse, writers everywhere have covered the general ineffectiveness of cable networks, and many have pinned their hopes on the mystical Apple television that lies somewhere in the rumored mists of the coming year or two. The increase in focus on the failures of cable networks is the direct result of the midyear collapse of Netflix. Once viewed as a savior for those looking to escape the expensive world of cable subscriptions, Netflix stuttered through the summer and shook the confidence of its supporters.

In short, people were forced to re-examine the market and realize that Netflix may not be the sole source for redemption in a dire industry.

Having said that, this shift in writing is most certainly not indicative of Netflix's demise. The CEO made some poor decisions, the company and its stocks suffered, and many users fled the service -- those are the facts.

What many tend to gloss over is that Netflix has an enormous (and growing) library, it is accessible near ubiquitously on modern devices, and it is an unquestionably affordable service. That is a strong equation -- one that is set to be strengthened and emboldened by the addition of original content in 2012.

'Lilyhammer' is Netflix's first outing in the original content market, and I have to say, I'm not interested in its quality. I may well never watch the show. But as a Netflix subscriber it gives me heaps of confidence to know that the company has recognized and acted upon its competitive areas and, despite a flawed year, is holding true to its aims rather than holding back. Streaming film and television is all well and good, but offering something appreciably new is an entirely different matter. Whether 'Lilyhammer' is of any substantive quality is uninteresting to me -- but what is of the utmost interest to me is that Netflix is beginning to fight back, and it is choosing its weapons wisely. Granted, Netflix announced 'House of Cards' in March, 2011, and this initiative has been in motion since, but 2011 was not the year of original content for Netflix -- it was a year of failure. 2012 is an opportunity to embrace something new -- something different -- and revive their business for the masses, and original content is the vessel through which Netflix might be able to do that.

'Arrested Development' and 'House of Cards' are on the horizon, and I'm sure more will follow. Meanwhile more and more people are entering the world of smartphones and tablets. When people realize that they can watch anything they'd like for a small monthly fee, including new programming, I'd hazard a guess that such a phenomena would spell good things for Netflix now that the negative times have passed.

Imagine if HBO was available sans cable subscription. Many have come out in endorsement of this business model, but HBO has yet to bite. Netflix, on the other hand, is in a position to capitalize on this hesitance. Offering quality, exclusive content for anyone, without any cable requirement is a winning formula, one that could very well see Netflix through to being a media powerhouse in a few years' time.

Of course, this trajectory is contingent on Reed Hastings -- and his current track record is blotchy, at best. If the controversial CEO decides to pipe up and institute more ill-conceived changes in the coming months, Netflix will likely suffer a hemorrhage of users from which it would be difficult to return. But right now, Netflix has retained a sizable user base and is actively striding toward ensuring its growth and prominence in the coming years.

These are not the actions of a dying company, they are the actions of a humbled, forward-looking, and modernizing company.

Yes, there may be lingering distaste over Netflix's flawed 2011, but kicking off 2012 in an optimistic manner does a great deal to resolve those feelings of hurt. Refocusing its users and the media on its positive initiatives and leaving behind its mistakes is an important step, and it will work out well for Netflix.

Netflix is in a unique position insofar as it is accessible, cheap, and growing. Unlike cable networks, Netflix is not bound by perceived restraints and customer-cheating tactics, and, from my perspective, they are entirely cognizant of that fact. The introduction of original content is a unquestionably positive thing, and regardless of initial quality, it is indicative of a rare sight: a forward-thinking media provider.