Netflix makes it incredibly clear just how much its streaming service has riding on content. Of the $6.3 billion in assets it claimed during the second quarter, nearly $1.8 billion lies in its content library. However, of the company's $2.3 billion in liabilities, a whopping $1.86 billion stems from the deals for that content alone. Amazon, meanwhile, hasn't disclosed the terms of many of its biggest content deals, but the acquisition of Time Warner's (TWX) HBO programming this year is believed to have cost the company upward of $300 million.
There's a big increase in overhead when Netflix starts producing original content including House Of Cards and Orange Is The New Black or when Amazon thumbs through its pilot shows to pick up Alpha House, Mozart In The Jungle and Transparent, but each service's host of third-party shows only helps it discover what will work in its originals and what won't. Amazon has been streaming HBO's The Sopranos for the last few months and has given viewers a reminder of the peaks and valleys of one of television's most acclaimed series. They see the great moments when Tony Soprano kills a gangster in witness protection while taking his daughter to college, they watch the character profiles of his closest henchmen fill out during a botched execution in the Pine Barrens and they see the show lose its way a bit after he gets shot in the fifth season.
On Netflix, viewers get to watch Breaking Bad's Walter White restart a dead RV in a desert to save the meth business that's paying bills for his cancer treatment, watch the jokes between him and his former pupil disappear as they kill their gangland partners and watch White's complete metamorphosis into a loathsome tyrant by the series' end. They're able to consume it all in minimal sittings, without commercial interruption and with immediate analysis through online reviews and social media. They're able to see the connections that show runners like The Sopranos' David Chase and Breaking Bad's Vince Gillian make, and raise concerns about loose ends and left turns -- like Tony Soprano's out-of-nowhere gambling habit and the unresolved fate of White's wife's other gentleman caller, Ted Beneke.
Having the ability to watch, absorb and obsess over these shows has justifiably changed the way that viewers consume their television. Nearly three in four members streaming the first season of Breaking Bad finished all seven episodes in one session, according to Netflix. With ensuing seasons, the binge-watching rate was higher than 80% of all Netflix viewers.