I wrote about this a bit yesterday in my review of House of Cards, but, while I respect the work of folks at MSNBC, I kind of think that the best way to take on cable news is not to go high-minded and triumphal a la The Newsroom, but savage and ridiculous. Fortunately, it sounds like Amazon, as part of their plans to expand into original programming* is planning to oblige me:

Amazon Studios has landed another big-name actor for one of its first six comedy pilots. I’ve learned that Jeffrey Tambor is set to star in The Onion Presents: The News. The project, from The Onion’s Will Graham & Dan Mirk (The Onion News Network, The Onion Sportsdome), is described as a fast-paced scripted comedy set behind the scenes of The Onion News Network that shows just how far journalists will go to stay at the top of their game. Tambor will play David Everett, ONN’s oldest and most respected news anchor. He is intellectual, highly ambitious, cutthroat and insecure as he believes his job is being threatened by the younger Cameron, whom David detests.

Tambor was actually quite good in Next Caller, a show NBC put into production about the employees of a satellite radio station that starred Dane Cook. The pilot itself was a little bit heavy on the wacky, and Cook’s appeal will always be limited to me. But Tambor, as the head of the station, embraced the ludicrousness of his position, which required him to program to niche audiences that ranged from the bros who tuned in to Cook’s show to people who really just wanted to listen to saucy Catholic nuns. And while it’s not as if the projects come from the same creators, or if Tambor is acting out his own ideas about media, his strong suit as an actor has always been characters who maintain a level of wounded dignity entirely inappropriate to their circumstances. That’s a nice set of skills to take to cable news as a subject, and goodness knows The Onion has a genius for finding examples of gaps and disjuncts between the reality of scenarios and the ways people comport themselves during them.

*Which includes an original series by Garry Trudeau about Congressmen sharing a rowhouse in Washington, for which I cannot wait.

Over at Variety, Andrew Wallenstein has a very smart piece about how a central piece of Netflix’s business strategy may actually work against the company. One of the things Netflix facilitates is binge viewing, which in my case means watching an entire season of 30 Rock in a single day, but for most people means watching a couple of episodes of television at a time, instead of once a week the way they’d be released in their timeslots on television networks.

But when it comes to the shows it’s creating, rather than the ones it’s licensing multiple seasons of at once, that’s a problem. Netflix is releasing every episode of its seasons of Arrested Development and House of Cards at once. And at 14 episodes for Arrested Development and 13 episodes for House of Cards, that’s few enough episodes for people who are interested in just those shows, but untempted by the rest of Netflix’s offerings, to sign up for a free trial of the service, watch everything they want, and then quit before they have to start paying. Wallenstein explains:

A relationship with a program that might otherwise drag out over months on a linear channel is telescoped into hours. And therein lies the paradox inherent in Netflix’s business model: Allowing consumers to consume at their own speed contradicts the company’s financial imperative to keep them on the service paying the seductively cheap flat monthly fee of $8 for as many months as possible. Sure, it’s possible Netflix has assembled a library so vast — over 40,000 episodes of TV and counting — that a subscriber can fill countless months hopping from one binge experience to the next.

But let’s not forget that the whole point of Netflix embarking on an original programming strategy is to bring in new subs by offering a different value proposition. These are consumers who didn’t feel compelled to sign on to binge on library programming, but they’re interested in seeing a buzzed-about new show like “Cards,” and other originals still to come….It’s not like another original series will be waiting for them as soon as they’re done with “Cards.” The next series on Netflix’s slate of originals, Eli Roth’s “Hemlock Grove,” isn’t due until April and the revival of Fox’s “Arrested Development” doesn’t begin until May. Thus, getting new subs to pay for a second consecutive month of services becomes at least a little less likely.

This strategy gets even scarier given Deadline’s reporting that Netflix isn’t financing its original content development from original revenue streams, but at least partially from debt:

About $225M of the proceeds from the $500M offering it announced today — senior notes due in 2021 paying interest at 5.375% a year — will be used to retire the company’s $200M in 8.50% senior notes that are due in 2017. But with Netflix’s first original series, House Of Cards, making its debut on February 1, some investors wonder whether the company needs the remainder to help it handle its steep content payment commitments. Some $2.3B of Netflix’s $5.6B in streaming content obligations will come due in the current fiscal year, Wedbush Securities’ Michael Pachter says. The new debt, he believes, “is necessary to solve near-term cash flow problems, and indicates the low likelihood of positive cash flow for the year.” Netflix’s debt, along with its investments to expand overseas, make it “a risky investment.” Moody’s Investors Service also considers Netflix’s new debt to be risky, giving it a Ba3 rating. The debt assessment firm believes that some of the cash will be used to pay for “investments in original programming, which require more up-front cash payments” than library titles.

It may make sense for Netflix to bring in different tranches of customers with original and licensed programming. But to do it, I’d bet that long-term, the company’s going to have to raise its prices. And to keep up with escalating costs of licensing—particularly as Amazon continues to expand its efforts in this space, Netflix will have to pay just to keep a basic content library, rather than for exclusives—and of content production, those prices will have to keep rising. Netflix, like Hulu Plus, has largely been able to keep its prices stable, rather than subjecting customers to annual price hikes or hikes at the end of contracts a la most cable providers. Negotiating that shift may cost the company customers, too. But Netflix isn’t Amazon: it can’t subsidize its purchases and creation of content with a ton of other merchandise, or with a board that accepts essentially no profits. It’s going to have to come up with the money somehow.

I think James Poniewozik is largely correct that while the networks may be upset about new technologies that let viewers skip ads, they might be better off trying to find fee structures that are responsive to new technologies:

But they want—and a good business would provide—many more ways of paying, if not with their eyeball attention to ads, then with money. (There’s the possibility, for instance, that networks could raise fees to networks like Dish that offer ad-zappers, which fees could be passed along to those who ad-zap, to replace lost ad revenue.) People want to be able to buy episodes, subscribe to shows, watch on their own schedule, and bypass ads they don’t want. In the process, the relationship of people to TV networks will change: right now, networks’ true “customers” are the advertisers, because they’re the ones who pay money.

The TV business is changing from one with a single main revenue source to one with a lot of them; the transition is bound to be painful for the networks. But quashing an option your consumers want is the wrong way to forestall that pain. You can’t pull the plug on technology forever, and if that’s your best response to change, it’s your own fault when consumers start tuning you out.

I also think this is easier in theory than in practice, and is going to take years to sort out. One important experiment will be to see how consumers respond to a Netflix or Hulu Plus pricing scheme that’s more reflective of the actual cost of supporting that content and the production of higher-quality original content. A second step will be to see how consumers behave if they’re faced with regular but reasonable hikes in the prices of those services, which are responsive to both renegotiated content contracts and rising wages and costs. I would like for it to be true that people are willing to pay for content at a cost that will support a fairly diverse array of high-quality programming, but as I’ve written before, we don’t actually have proof of a viable financial model yet, and it’s not wrong for the networks to be cautious about blowing up an existing business model in favor of optimistic projections.

We have a sense of what we’ll pay for three distinct products in this market. First, there’s what people will pay for bundled cable, both in terms of what prices will get them in the door and what prices won’t lead them to quit at the end of a first-year contract. We also have a sense of what we’ll pay for a single episode of television, because iTunes and Amazon have established that price for consumers much in the way cable companies did. And we know we’ll pay $8-$30 a month for streaming video and DVD exchange services. As consumers, I think we have little sense of the ad revenue we’d have to make up if we were to replace advertisers as networks’ customers. I’d be excited to see a good experiment in how to price out new models, but it would take serious negotiation between distributors and the networks to set one up, and it would need to include both coastal and rural consumers to account for differences in broadband penetration and avoid preference bias. If folks have ideas on how to make such an experiment work, leave them in comments. It’s time to start thinking beyond the simple idea that evolution is good and important, and start talking in greater detail about how we get there.