Netflix Reportedly Acquires Original TV Series 'House of Cards'

March 16, 2011— -- First Netflix vanquished Blockbuster, and now it seems to be setting its sights on premium cable.

Netflix is reportedly close to inking a deal to distribute an original television series, a move that would put the video streaming service in direct competition with cable channels like HBO.

According to Deadline.com which first reported the news on Tuesday, Netflix outbid HBO and AMC for the rights to stream "House of Cards," a series starring actor Kevin Spacey and directed by David Fincher, who helmed last year's "The Social Network." The drama is to be adapted from a series of British political novels subsequently developed as a BBC TV miniseries.

Netflix declined to comment on the report, though an industry source close to the negotiations confirmed the company's interest in "House of Cards."

"They're sort of taking a page out of the playbook that HBO and Showtime used," said Sam Craig, director of the Entertainment, Media and Technology program at NYU Stern School of Business.

When HBO started operating in the late 1970s and early 80s, it simply showed full-length movies. As competitors like Showtime, Starz and others began doing the same thing, the network moved into original series to differentiate.

While Netflix now dominates the streaming business, delivering six in 10 streaming movies in January and February according to NPD group, a number of competitors have cropped up, including Amazon Prime, Apple's iTunes and Hulu's premium offerings.

"Netflix has sort of gone to the place where streaming and delivery of traditional DVD's is pretty much a commodity and they're getting a lot of competition. So I think it's essential that they develop distinctive content," said Craig.

To secure "House of Cards," Deadline.com reported, Netflix has committed to two seasons or 26 episodes at a cost of more than $100 million. If those figures are correct, it would be an enormous bet that bucks the usual Hollywood practice of requiring a pilot episode before committing to a series.