Apr 8, 2016 · 4 minutes

Back when The Sopranos and Sex in the City were the hottest shows in America, you sort of had to subscribe to HBO or wait 18 months for DVDs to know what anyone was talking about.

That’s exactly what Netflix has become with its original programming now. When the President of the United States Tweets about spending Valentine’s Day binge watching House of Cards…. You’ve done something right.

More to the point: Netflix changed the nature of TV viewing and the art of creating television as much as HBO did years ago. While HBO ushered in a wave of cinematic, sex-filled, swearing TV, Netflix used the behavior of binge watching to its advantage and has used its platform and data to amass massive “niche” audiences. This allows it to commission work that’s not lowest common denominator. It allows it to commission work that is downright bizarre…. Like the Bill Murray Christmas Special. It allows it to pay handsomely for work no one else has the stomach for and give total creative freedom to the creators and actors. And that, in turn, makes Netflix the place to be. Above HBO, above Amazon, above everyone.

Jeff Bewkes once quipped that viewing Netflix as a threat was like viewing the Albanian  Army as a threat. What was intended as an insult to Netflix wound up being a compliment to Albanians.

A research note by Morgan Stanley this week underlined just how well original content is working for Netflix. According to their own survey, some 45% of Netflix users cited original programming as the reason they subscribe and nearly 30% said Netflix offers the best original programming among streaming or premium networks-- both large increases from a year ago. That’s a sign to Morgan Stanley that churn will continue to fall.

The gamble has worked: Netflix controls its own destiny, and has carved out an “HBO” that doesn’t have to rely on cable networks for distribution. They get to be distributors and content creators. And in that sense, they’re less like HBO and more like Disney. In James B. Stewart’s epic page turner, “Disney Wars,” he writes about the mouse house’s constant insistence that both were important, but of the two content was king. Having the best content ultimately put you in the driver’s seat.

Netflix may be the first company since Disney to so disrupt both the nature of content and delivery, and how pulling the levers of each can save a company from the downsides of relying too heavily on one or the other.

Think of all different “delivery” mechanisms Disney created off of a set of characters and some songs: A theme park. Clothing. A weekly Sunday night show that became an entire channel. Its windowing of content known as “The Disney Vault.” My kids watch a new iteration of Mickey Mouse Clubhouse today and we have the same debates about why Goofy walks around and wears clothes but Pluto doesn’t that I had as a kid. It wasn’t just good content, it was universal content that Disney excelled at constantly repurposing. Because it could repurpose and reissue and continue to monetize the old content, there was less pressure on the new content.

That said, Disney’s bleakest time was when it stumbled in new movies in the 1990s. That’s why its relationship and subsequent acquisition of Pixar was a masterstroke. One reason I believe Frozen resonated so widely was that it was the first movie that truly seemed like a mixture of the two: The technology and adult wit of Pixar mixed with the songs and strong good-and-evil storyline of Disney.

Again: That move was driven by content. The technology and software Pixar brought into the fold served content not distribution.

Netflix controls both its own delivery and increasingly content, the former more so than Disney ever did thanks to its direct relationship with the customer. But as the Morgan survey makes clear the two are becoming increasingly intertwined and the reason people are subscribing is the content, less the novel delivery. This is great news now. But over time, will Netflix regret putting itself in the “hits” business?

While Netflix has had a remarkable string of hits: From House of Cards to Making of a Murderer to Jessica Jones, others have been hit or miss, just as networks like Showtime and HBO have had misses with original content.

A Netflix bull would argue it’s the delivery mechanism that will keep Netflix from falling into the trap that can come with relying on content and needed to continue to produce a series of must-watch hits to grow. It’s all about those niche audiences. If Netflix can continue to find audiences within its platform that love the shows that perhaps I hate, viewers can still subscribe because of the original content. But the original content we all love may be different from person to person. Put another way: It may be the delivery of Netflix allowing people can set their own must watch Sunday night “programming” that saves it from relying too heavily on content.

It’s a far different twist on the age old Hollywood debate than we’ve seen before. And it’s the reason calling Netflix a mere “new HBO” misses the point as much as calling it the “Albanian army.”