Once upon a time, an amiable show called Cheers ruled television. When Cheers, set in a Boston bar “where everybody knows your name,” debuted in September 1982, the critics loved it, but ordinary viewers were not so enamored. The show sank to the bottom of TV ratings. An undeterred NBC stuck with it, and the network’s faith paid dividends. Cheers became a mainstay of NBC’s blockbuster Thursday-night programming, along with The Cosby Show and Family Ties. Cheers stayed on prime-time television for eleven seasons, and forty million viewers watched its final episode.
Writing is a crucial bottleneck to quality television and was essential for Cheers’s success. Witty repartee among the show’s memorable characters kept viewers tuning in. Bar owner Sam Malone was an unapologetic Lothario who constantly was wooing not-so-bright women. Sam’s foil was a waitress named Diane Chambers, an intellectual snob stranded at the bar by a flyaway fiancé. Sam and Diane’s unlikely chemistry provided one of the comedy’s prime romantic tensions and left the audience wondering week after week: will they or won’t they become a couple? The colorful ensemble cast members, including Carla, the sharp-tongued waitress, Norm, the stout everyman, and Cliff, the garrulous postal worker, changed remarkably little over the show’s lengthy run.
Cheers writers used several simple how-to rules for writing. One was to develop characters with very distinct personality traits. The idea was to give the audience a sense of predictability and familiarity with each character. The writers often created particular situations, and then explored how each character would respond. In later seasons the writers purposefully surprised the audience by occasionally having the characters behave in the opposite way to what was expected. This rule let the writers develop characters’ richness without diminishing their distinctiveness. A more challenging rule further distinguished each character. Each character had a unique way of speaking, and this rule was termed “write for radio” — meaning that the audience could know who was talking just by hearing the dialogue. Another rule was that every episode had to stand alone such that viewers could watch any episode at any time in any sequence and its story line would stand alone. This meant that writers had to create a complete story with a beginning, middle, and end for each episode.
When Cheers writers converged in the writers’ room to share their own experiences, they wanted episode themes that aroused universal emotions like being embarrassed, amused, or scared. The rule was that anything with friction that resonates for lots of people was fair game for an episode. The writers were pragmatic and fast, and they often zoomed through creating rough drafts so they could take time detailing polished drafts. Within the rules, however, Cheers writers had extensive flexibility to explore all sorts of issues, including controversial ones. Despite being a light comedy, Cheers was among the first TV shows to address feminism, homosexuality, and addiction.
When the bar closed in May 1993, Cheers was one of the longest-running network series ever. The simple rules helped the writers to create the vivid characters, smart dialogue, and creative storylines that made the show such a hit. During its long run, Cheers was nominated for 117 Emmys, winning 26. In 2013 TV Guide named Cheers the eleventh-greatest show of all time, beating competition like Star Trek, Saturday Night Live, and Mad Men.
Cheers is a remarkably successful example of a show where viewers could tune in at almost any time and feel at home, even if they had missed a few episodes. Its simple rules for writing were geared around this promise: the stable cast of sympathetic (and predictable) characters did not change from episode to episode, each episode had a self-contained story, and shows were written with a brisk rhythm because episodes did not need to fit into a complex storyline. This instant familiarity was critical in a time before DVR, when viewers could not catch up on episodes they missed. Episodic simple rules are not limited to sitcoms like Cheers (or the vast number of comedies it has influenced, like Friends and How I Met Your Mother). They span television genres, notably procedural dramas in which familiar characters do the same thing in every episode, like solving a case in CSI or diagnosing an illness in House.
In March 2011 Netflix executives were surveying the new television landscape they had helped create. TV in the 2010s looked radically different from the heyday of Cheers, and Netflix was at the forefront of redefining television. With the sizable capital it had accumulated after destroying Blockbuster, Netflix was about to dive into original programming, offering television without a channel. It was a historic step, and a big risk. Netflix needed a hit to stand out from the crowd. The question was: How to create one?
Writing was an obvious place to start. After the advent of DVR and non-network channels like HBO, television entered what TV critic Brett Martin calls its “Third Golden Age.” The Sopranos ushered in this era with serialized, not episodic, shows. While viewers could watch any episode of Cheers and know roughly what was going on, if they walked into a midseason episode of The Sopranos they would be constantly asking, “What’s happening? Who is that guy?” Shows like The Sopranos darkened the tone with edgy storylines and took more risks than network shows, with their mass-market audiences. After The Sopranos, The Wire, Breaking Bad, Mad Men, and similar hits, audiences were primed for serialized shows that explored serious themes. Like Cheers, these shows relied on excellent writing, but to be successful, they had to redefine the rules.
Netflix, of course, could have followed the Cheers-style simple rules that were still driving some of the most popular entertainment on television. Procedural dramas like NCIS and sitcoms like Two and a Half Men and The Big Bang Theory, which follow the simple rules of episodic writing so faithfully that critics accuse them of being formulaic, dominated television. But Netflix executives realized that employing the same old rules would not be enough to break out of the pack. Revolutionary times call for revolutionary measures. In order to change how television worked and skyrocket a non-channel show to stardom, Netflix would have to change the game. It would have to join the revolution of the Third Golden Age of television, and then push that revolution one step further.
In February 2013, Netflix’s longshot debuted. House of Cards stars two-time Oscar winner Kevin Spacey as Francis “Frank” Underwood, a conniving politician from rural South Carolina. In the series premiere, Frank is passed over for secretary of state and embarks on a path of power and revenge. To tell Frank’s story, House of Cards’s writers embraced the serialized format. They used event foreshadowing and wove characters in and out of the story. A character could appear in episode two and then disappear until episode eight (something that Sam’s character in Cheers would never do). Instead of stable character development, as expressed through the characters’ predictable reactions to common situations, House of Cards’s characters develop in lengthy side-segments, like when a vice-prone congressman is portrayed hanging out with his kids.
While excellent writing is part of the House of Cards story, the bigger story is Netflix and its re-envisioning of television. In earlier chapters, we defined bottlenecks as decisions or activities that hinder value creation. In essence, Netflix attacked critical bottlenecks that others had accepted as the status quo. For example, rather than focusing primarily on writing as the key bottleneck, Netflix and its partner, Media Rights Capital, made the strategic bet that world-class directing could help House of Cards stand out among the vast array of choices available to viewers. To stand out, House of Cards did something very rare in television: the show recruited an A-list Hollywood director. That director was David Fincher, a two-time Oscar nominee who had directed top films like The Social Network, The Curious Life of Benjamin Button, and The Girl with the Dragon Tattoo. As the story goes, Fincher was on the prowl for new projects when a remake of the British political thriller House of Cards crossed his path. Media Rights Capital owned the rights to the show and wanted Fincher at the helm of a U.S. remake. Fincher loved the BBC version, stating, “The way it was structured was so smart. Meeting him [the lead character, played by Ian Richardson] at his lowest point and watching him gain traction as he begins to move all the pieces on the chess board.”
Netflix and its partners gave Fincher the directorial control that is common in moviemaking. With a twenty-six-episode commitment from Netflix, Fincher had the freedom to establish a creative process that was freeing for directors. He signed up five leading directors, including Charles McDougall (Desperate Housewives, The Office) and Allen Coulter (The Sopranos), to direct their own episodes. Fincher directed the first two episodes to set the tone, and then left the director’s chair. The rules called for each director to be responsible for two sequential episodes and a twenty-day shoot. The directors were also required to watch Fincher’s first two episodes to get a feel for the show, and read the scripts leading up to their own episodes. Fincher strongly suggested that the directors use the more cinematic stationary camera, a classic moviemaking technique that emphasizes framing shots with intriguing angles, lighting, and actor movement. After that, Fincher left the directors alone. They could take their episodes wherever they liked within the story arc, had the flexibility to cast their own day players for characters introduced in their episodes, and could do their final cuts. The result is the signature and Emmy-winning cinematic quality of House of Cards.
Beyond directing, Netflix tackled another novel and neglected bottleneck: programming. Picking winning TV shows is a major bottleneck to the success of media companies because viewers will simply avoid shows that don’t interest them. Yet since the dawn of television, picking winners has been more art than science, and has rested on guesswork and luck. That is why media companies rely on well-worn rules for programming that commit them to shows in stages — first a pilot, then a few shows, and then a single season. Netflix broke those rules and did so with technology that didn’t exist in the days of Cheers. It committed to two full seasons in advance — no pilot, no stages. Why? As one pundit claims, “Netflix knew you would like House of Cards before you did.” While this downplays the very real risk Netflix was taking in launching a major new show, there is more than a sliver of truth in it. With about thirty million subscribers, Netflix understood what its members were watching, and with a granularity that executives in other media companies could only envy.
Its analytics, for instance, picked up on the success of the British version of House of Cards, and the popularity of David Fincher and Kevin Spacey movies on Netflix. The new programming rule to buy shows sight unseen was innovative and let Netflix obtain House of Cards before other buyers were ready to commit. It’s an intriguing rule as well because it exploits Netflix’s unique “big data” capabilities, making it a less risky rule than it would be for a conventional television network. By exploiting its unique capabilities, Netflix proactively redefined the boundary rules for choosing television programming.
Netflix broke the rules of programming again by releasing the entire season at once, an innovative rule that the company used again with shows like Orange Is the New Black. The rule seemed risky at the time. After all, viewers traditionally watched new shows with breaks in between episodes, which built anticipation and excitement into the viewing experience. Releasing an entire series all at once might temper the romance. But again, this practice exploited the unique expertise of Netflix. The company had data on millions of searches, pauses, rewinds, and fast-forwards, and knew how frequently people already streamed multiple shows in one sitting. In other words, Netflix knew from its vast data that many viewers were already “binge watching” shows. As important, the all-at-once rule made House of Cards stand out in the media and break away from the pack, just as Netflix wanted.
As if breaking the rules of two bottlenecks were not enough disruption of the industry, Netflix tackled a third novel bottleneck: hiring. The creators of successful shows like Cheers, of course, pay attention to talent, and hiring appropriate people is critical to success. Yet Netflix changed the rules of talent acquisition, signing Fincher, one of the only A-list directors to ever take on a television show, and Spacey, one of the biggest A-list actors to ever star in a television show. Even the relatively novice creator, Beau Willimon, had an Oscar nomination for screenwriting a George Clooney movie, The Ides of March. The rule of hiring such high-quality talent seemed risky from the outside. Netflix has, however, long focused on the hiring bottleneck in its existing businesses and was simply exploiting familiar boundary and how-to rules: hire the very best, pay them top dollar, and leave them alone. Netflix applied those rules to House of Cards, and its star talent generated extensive media attention, just as Netflix executives had hoped.
Individually, many of the House of Cards rules had some precedence. The serialization writing rules were similar to those of other shows with intricate and edgy plots. Although star directors are rare, House of Cards followed ABC’s Twin Peaks, directed by David Lynch in the early 1990s. Yet taken collectively, the House of Cards rules, including its unique programming and talent rules, produced something unusual in television history. House of Cards was a stunning success that became the first Emmy-winning show never seen on traditional “television,” getting twelve nods and winning three. It also picked up four Golden Globe nominations, including a win for Robin Wright. The show moved the needles that Netflix wanted to shift: achieving a leading position on the map for top-notch creative content and a heftier subscriber base.
Sometimes it is enough to adapt to a dramatic change, like reenvisioning a garden in the face of a water shortage. Other situations demand proactive change. Just as the Oakland A’s initially changed their vision of baseball with the moneyball rules and then changed their vision and rules again when moneyball faltered, House of Cards proactively tried to alter the landscape of television. Cheers perfected the simple rules for episodic television writing that are still in use today. In contrast, Netflix broke away from the industry with a disruptive focus on neglected bottlenecks: directing, programming, and talent acquisition. The company’s adaptiveness and willingness to change the bottlenecks gave it the freedom to rewrite its rules.
Excerpted from "Simple Rules: How to Thrive in a Complex World" by Donald Sull and Kathleen M. Eisenhardt. Copyright © 2015 by Donald Sull and Kathleen M. Eisenhardt. Used by permission of Houghton Mifflin Harcourt Publishing Company. All rights reserved.