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‘The Get Down,’ ‘Sense8’ Cancellations Signal That Netflix’s Originals Are ‘Destructible’

Netflix predicted last year that it would grow its original programming lineup to more than 1,000 hours in 2017. What it didn’t say was that it would also do some pruning.

The streaming service last week canceled “Sense8,” an odd and ambitious drama series from Lana and Lilly Wachowski, just one week after canceling another expensive drama, “The Get Down,” from Baz Luhrmann. That meant four shows unplugged over seven months — which, for most programmers, would amount to restraint. But for Netflix, which had cultivated a can-do-no-wrong mystique with a near unbroken string of renewals, the decision to start swinging its ax is an indication that the streaming service is not impervious to at least some of the pressures felt by its linear competitors.

What remains unclear — and frustrating for some in Hollywood’s creative community — is the lack of transparency around what lives and dies at the streaming giant.

“No one had the expectation that they were going to keep every show they ever made on forever,” one TV lit agent told Variety. “It would be nice to know the metrics they use to make those decisions, but we’re not going to know that.”

A second agent who spoke with Variety added, “The upside to not knowing the ratings and being able to renegotiate a higher rate based on them was the confidence that the show would be renewed. It’s sobering to see that Netflix is destructible.”

Netflix has been steadfast in its refusal to release viewership information comparable to the Nielsen ratings that are the currency for cable and broadcast TV, arguing that as an ad-free subscription service, it has no incentive to do so.

In the absence of that data, one common element of the four recently canceled Netflix series emerges — they were all among the most expensive on television.

As Variety originally reported, the season-one budget for Luhrmann’s “The Get Down” ballooned from $7.5 million per episode to roughly $12 million. The first seasons of “Sense8” and “Marco Polo” each cost a reported $9 million per episode. “Bloodline,” which just had its final season released, cost a reported $7 million per episode.

“Everyone makes mistakes, but very few have big successes. This is about the legacy ecosystem of TV being literally replaced by Netflix and Amazon.”
Rich Greenfield, BTIG Research analyst

A typical hour of scripted drama on broadcast costs $2.5 million-$3.5 million — on cable, $1.8 million-$2.5 million.

For a company that claims a 2017 content budget of $6 billion, the price of each of those programs is a drop in the bucket. But together, they represent a very significant drop.

Netflix has promised a higher volume of shows, but while delivering on that promise, it has shifted aggressively into reality programming and stand-up comedy specials — two areas where production costs are dramatically lower than they are in scripted.

If Netflix anticipated a tapering off of international subscriber growth in the near future, it would make sense for the company to begin to try to put some controls on programming costs — while remaining an aggressive player in original scripted series.

“The Get Down” may have been a big swing-and-miss, but dramas such as “Stranger Things,” “13 Reasons Why” and “The Crown” appear to have captured the buzz that Netflix and all other programmers crave.

“Everyone makes mistakes, but very few have big successes” such as Netflix has had, said BTIG Research analyst Rich Greenfield. “This is about the legacy ecosystem of TV being literally replaced by Netflix and Amazon.”

CEO Reed Hastings doesn’t seem to be too troubled by the cancellations. “You should have more things that don’t work out, [so] you have to get more aggressive,” he said May 31 at the Code Conference in Rancho Palos Verdes, Calif. “The drive toward conformity as you grow is more substantial. As a leader, you want to drive people to take more risks.”

Analytics firm 7Park Data is one of several companies that use proprietary technology to attempt to fill the void that Netflix’s refusal to release viewership information creates. According to the company’s data for the 12 months ending in April, the most recent seasons of “Marco Polo,” “The Get Down” and “Bloodline” were the least streamed new seasons of any hour-long Netflix original series in the U.S.

But at the top of the pile, other Netflix originals reigned. The four most-streamed hour-long series for the same period were the newest seasons of “Stranger Things,” “Orange Is the New Black,” “Marvel’s Luke Cage” and “13 Reasons Why.” All four outperformed the most watched hour-long linear series available on the service: season one of Showtime’s “Shameless.”

Though Netflix has routinely dismissed such outside analytics, they lend credence to the universal truth that appears to be motivating the company — expensive shows work when people watch them, less so when they don’t.

Todd Spangler contributed to this report.

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