Page 2 of 2 Previous
At the same time, Netflix is counting on the original programming to reduce the number of subscribers who drop the service. This is important because Netflix charges by the month, making it easy for its subscribers to drop the service as soon as they conclude there's nothing interesting to watch. Netflix's cancellation rates usually hovered between 4 percent and 5 percent until the company stopped disclosing the figures last year.
Subscribers keep Netflix afloat because, like HBO, the company doesn't subsidize its programming with commercials.
As part of its efforts to keep customers on board, Netflix tries to target promotions about its original series at subscribers most likely to enjoy the themes and approach, based on an analysis of their past viewing habits.
Netflix believed "Orange Is The New Black" would have wide appeal because the series is the handiwork of Jenji Kohan, the creator of critically acclaimed "Weeds," which aired for eight seasons on the Showtime cable channel. All 102 episodes of "Weeds" are now available on Netflix, providing valuable information about the number of subscribers who are likely to be interested in "Orange Is The New Black." Netflix has been pitching the new series to all subscribers who watched all or most of the "Weeds" episodes. The new series also is linked with other shows that share its characteristics, such as "strong female leads."
This matching system has become so finely attuned to the tastes of Netflix's audience that the company estimates its recommendations now steer its subscribers to three-fourths of the video watched on the service.
Netflix's emphasis on original programming has worked out well so far. "House of Cards, a political drama starring Kevin Spacey, became the first made-for-the-Internet series to be nominated for multiple Emmys in major categories. The series received nine nominations, including outstanding dramatic series and best actor and actress in a drama. "House of Cards" also helped Netflix add more than 2 million subscribers during the first three months of the year.
Two other Netflix exclusives, "Hemlock Grove" and a revival of "Arrested Development," rolled out in April and May. On Monday, Netflix said those series helped its service add 1.2 million global subscribers during the three months ending in June. Investors had been hoping for even bigger customer gains, increasing the pressure on the "Orange Is The New Black" to help Netflix deliver on its projection of about 2 million additional subscribers worldwide during the July-September quarter.
Investors clearly like the way things have been going. Since the end of last year, Netflix's stock has nearly tripled in value to about $250. The rally has recovered most of the losses from a sell-off that began two years ago after the company imposed service changes that raised its prices by as much as 60 percent and triggered mass customer cancellations. The stock had peaked at around $305 at the time of the backlash.
About a half-hour before the debut of "The Orange Is The New Black," many subscribers are eagerly awaiting the series' release.
The activity on Twitter has accelerated and includes some messages from subscribers on the East Coast who mistakenly thought "Orange Is The New Black" would be available starting at midnight in their time zone. Netflix's rankings of its most-watched video lists the series trailer as number eight in the pecking order. The company wouldn't allow the AP to reveal the titles of the other top-ranking videos as a condition of being allowed in the war room.
Finally, midnight strikes and the engineers are scurrying to different devices to see if "Orange Is The New Black" is streaming without glitches.
One employee reports that it's working fine on Apple TV, one of the world's most popular ways to stream Internet video to flat-screen televisions. Similar reports come in about how the series is appearing on the Xbox, PlayStation and Wii video game consoles, other major conduits. No issues on the Netflix application for the iPad either, but one employee raises concerns, saying the series trailer is the only thing available on the iPhone app. The warning turns out to be a false alarm. The app just needed to be refreshed.
All the subtitles in different languages are working fine, too.
"Anyone seeing any issues, anything at all?" Jaffe yells across the war room as he looks around at all the employees gazing into their devices and staring at big-screen TVs. "It sounds like we are in good shape."
Just how smoothly things are going becomes apparent on the list of Netflix's most-watched shows.
Just seven minutes after its release, the first episode of "Orange Is The New Block" has grabbed the No. 9 slot. It takes less than a half-hour for it to move up to Netflix's third-most watched video, even though it's way past prime time in the U.S., where 29 million of the company's subscribers are located. Without specifying the total viewership, Netflix revealed on Monday that more subscribers watched "Orange Is The New Black" during its first week on the service than any of its other original series.
About 35 minutes after the series' debut, Jaffe and Heldt uncorked the champagne raised a toast to their co-workers to celebrate the successful start.
Before the summer is over, they will return for another late night in the war room to troubleshoot the Sept. 12 debut of Netflix's next original series, "Derek."