Will Microsoft Take on Netflix with Xbox and Former CBS Executive?
According to Peter Micelli -- an agent with Hollywood's largest talent agency, CAA (Creative Artists Agency) -- the answer is yes.
In a speech quoted by Variety, Micelli estimated that streaming video companies are spending millions more to produce their shows than traditional networks.
"The cheapest show is $3.8 million an episode," he said. "House of Cards started at $4.5 million and (executive producer David) Fincher took it way above that."
The budgets may be inflated, but House of Cards' success has attracted the attention of several big players within television. Now Micelli believes that Microsoft is poised to enter the fray and that Nancy Tellem is leading the charge.
Tellem, who has been referred to as one of the most powerful women in entertainment, once served as the President of CBS (NYSE: CBS). During her tenure with the company, she helped steer the network to first place by acquiring marketable, mainstream content.
She also ensured that all of her shows went back into production after the writer's strike that occurred during the 2007-2008 season. This was an essential part of the network's success. NBC (NASDAQ: CMCSA), ABC (NYSE: DIS) and Fox (NYSE: NWSA) decided to halt production of their new shows, including Life, Eli Stone and Pushing Daisies -- all of which were canceled the following season.
Tellem came to Microsoft to create a new production studio. She has not revealed her specific plans for Xbox Live or any other Microsoft service/device, but an announcement is expected to come this year. Micelli believes that announcement will involve new and original video content.
"...Right behind [Netflix] is Xbox and Nancy Tellem," said Micelli. "She's going in looking at it in a similar way to Netflix."
Yusuf Mehdi, the head of Microsoft's interactive entertainment business, recently told AllThingsD that the company aimed to create content that is "big and beautiful."
"All I'll say about our current and future investment is [that it is] about doing things that are big and premium," he said. "Other people will try some lower-end things; what we will do is things that are big and beautiful."
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