How to Do Original TV Online Properly (Hint: Study Netflix)

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With Netflix now having multiple series of original content in various levels of production, including shows that it beat out HBO and other cable channels for the rights to, you might be forgiven for thinking that 2012 was going to be the year when the internet stepped up and became a genuine force in television production. But the reality is a little more complicated.

Admittedly, the idea of the internet feeding the arguably-more-mass-audience of television is anything but a new one, but previous attempts have had a tradition of ending in one of many flavors of failure for numerous reasons. Last year, however, the tide looked like it was about to turn, with not only Netflix’s moves into original content, but also Prospect Park Media announcing that it would be continuing the canceled ABC soaps All My Children and One Life to Live online, with everything except the transmission medium staying the same. After years of television having a second life online, it looked like the relationship between the internet and TV was about to become slightly more equal.

(MORE: ABC’s Canceled Soaps Move Online: Welcome to The Future of Web TV?)

Then, of course, economic reality set in. Prospect Park first suggested that it would only be able to afford the continuation of one of the ABC soaps, before suspending both, reporting that “we couldn’t ultimately secure the backing and clear all the hurdles in time. We believe we exhausted all reasonable options apparent to us, but despite enormous personal, as well as financial, cost to ourselves, we failed to find a solution.” Ultimately, the statement explained, “the constraints of the current marketplace, including the evolution and impact of new media on our industry simply proved too great a match for even our passion.” Yes, that’s a new media company blaming new media for not being able to make its business model work.

So how can Netflix succeed where Prospect Park’s soaps failed? The situations are different, of course. PPM was preparing an ongoing series of daily programming, as opposed to Netflix’s various limited-run series; and the financial realities are extremely different for the two. Also, more importantly, Netflix isn’t acting as production house for any of its shows. It’s merely buying first-run rights from studios, which is far, far less of a risk. However, in the end I suspect it’s the venue for each project that would ultimately make or break their success.

Prospect Park’s proposed online soap network would have been a massive financial risk because it would have been starting from scratch in all the ways that counted. The soaps have a sizable audience on television, but it’s completely unknown how many of them would have crossed over to viewing online. In addition, the idea of selling ads is potentially difficult, because do you base estimates on the success of the soap’s brand, the unknown audience or something else altogether? In contrast, Netflix is an already existent business with a sense of its own cash-flow and the money available for spending on original content. Unlike Prospect Park, it doesn’t need its original content to be a hit because (a) it has a primary business that will be unaffected by the success or failure of the project, and (b) all of Netflix’s shows have resale value. Outside of SoapNET, Prospect Park was unlikely to find a broadcast partner to purchase television rights to its shows, but the cache of creators involved in Netflix’s offerings mean that it’ll likely find itself turning down suitors, not to mention whatever DVD or Blu-ray sales could be generated by each project—just look at how HBO’s shows are supported by home release sales.

What Netflix did right—whether intentionally or by accident, and I actually suspect it’s somewhere between the two—is hook into projects that don’t rely on the internet to survive. Yes, Netflix premiering the series gives them bragging rights and will be looked back upon in the future as some kind of step forward for internet content, but the smart thing they’re doing is recognizing that the internet cannot afford these shows in the current landscape, and creating a circumstance where second and third release rights (television and DVD/Blu-ray, respectively) can essentially pay for them until we get to a point where online media economy is far more stable and likely to be able to handle these things alone.

As for Prospect Park’s soap dream? Well, it’s not entirely over just yet, with the company having until September to make some kind of a move. If I were them, I’d make a deal with SoapNET for second viewing rights—a week after online debut, perhaps?—and see if that money could keep cameras rolling. If that fails, well, there’s always Kickstarter and the possibility of a very generous fan base.

MORE: Netflix Comeback Continues as Company Gets ‘Arrested’

Graeme McMillan is a reporter at TIME. Find him on Twitter at @Graemem or on Facebook at Facebook/Graeme.McMillan. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.