Netflix -- Will It KO HBO As It Seeks to Emulate It?

Just the other day I wrote about Netflix -- and the incredible challenges it faces with the major studios who are wary of it -- and want to hinder its incredible growth and current online dominance as THE movie/television streaming service of choice. The studios' weapon? Asking Netflix to open its wallet wide (very wide) and say "Ahhh" if Netflix wants to get rights to any of their premium content (or simply not even consider licensing their content to Netflix -- i.e., freezing them out). My conclusion? It was time to sell, sell, sell Netflix stock.

Well, at the risk of eating crow (this would not be the first time!), not so fast! Remember that somewhat odd Netflix development last week when the company announced its first major original series by the creative team David Fincher (one of the most respected Hollywood directors) and Kevin Spacey (one of the most respected Hollywood actors). If you missed it - click on this link. What does that development mean?

Yesterday, someone helped me see the obvious light! And, it was there before me all the time. Netflix's strategy to combat the studios' combativeness over licensing their content is summed up in the old adage "If you can't beat 'em, join 'em!" Netflix's strategy is deja vu all over again -- doing to the studios what HBO previously did to them. Netflix will drive future subscriptions by enticing consumers with premium content they can only get from them! Brilliant -- and an obvious and smart strategy -- and one that Netflix, I believe, has the potential to pull off.

And -- and this is the critical part -- Netflix can out-HBO in the process because, unlike HBO, Netflix is not beholden to the cable companies who have been responsible for HBO's incredible growth over the years. Think about it. Netflix will have the unfettered right and ability to exploit its original programming across the Internet. But, HBO doesn't. How would the cable companies react if HBO suddenly tries to distribute its own original programming across the Web? I'll tell you this -- they wouldn't be happy. HBO's Internet ambitions would be a direct shot across the bow to the cable companies and satellite operators and they, understandably, would retaliate by withholding overall marketing and visibility (and ultimately subscription retention and growth).

So, while HBO is between a rock and a hard place with respect to the brave new world of Internet distribution of its content, Netflix can savor the opportunity. Original programming may be Netflix's ultimate secret weapon. Netflix, ultimately, may supplant HBO in the brave new world as being THE premium subscription service of choice.

Now, ultimately, a lot has to happen for this to become reality. But, Netflix's first move with David Fincher and Kevin Spacey is a strong start. It is also a strong signal to the world that its original programming ambitions are audacious and real ... very real.

Last week, I was all "sell, sell, sell." But, upon further reflection, I am now not so sure ...