Original Content

I've been lazy this morning; sitting around in my pajamas, drinking coffee, and skimming through the five New Yorkers that have backed up on me in the previous weeks. There's an interesting one-pager about Netflix and its push towards more original programming in the issue I'm reading now. Apparently, they just signed Adam Sandler to make four movies exclusively for their subscription-based streaming service. The article focuses on how Netflix has been able to adapt from a pay-per-view service, to a DVD-rental service, to a streaming service, and now into a provider of original content (remember what Austan Goolsbee said about Silicon Valley businesses that can adapt?). 

So what changed?

"Netflix became a victim of its own success," the article states. "Once content providers saw how popular streaming was becoming, they jacked up the price of their content."

That sounds oddly familiar.

Jeffrey Ulin, the former head of distribution at Lucasfilm, is quoted in the article as saying: "The calculus here is simple. There's a lot more competition for viewers. That means it's harder to get content. And the content you do get costs more."

This premium price on content, my friends, is why Signatory bought Edradour distillery. It's why Ian McCleod bought Glengoyne and Tamdhu. It's why Willett finally got its operation up and running, and why Michter's and Angel's Envy are building their own distilleries. It's why Black Maple Hill doesn't sell Kentucky Bourbon anymore. You need original content; your own juice if you're going to survive in the new world of whiskey. Buying programming from other producers is getting to be too expensive.

"The carrot for any pay-TV service is really original content," Ulin goes on to say. "That's the one thing you can guarantee people won't find anywhere else. Of course, everyone is investing in original content, so Netflix just has to do what others are doing and hope that it can do it better."

Faultline, anyone?

-David Driscoll

UPDATE: I just realized that yesterday's blog post wiped out all our Palazzi rum. I've got plenty more coming tomorrow, so you can now order into the negative via the link in the previous post if you want to capitalize on the hot price.

David Driscoll