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What Shonda Rhimes’ Move to Netflix Means for Broadcast TV

Shonda Rhimes’ decision to leave the fold at ABC Studios for Netflix is a blow to Disney, her TV home for the past 15 years, and a blow to broadcast TV in general.

Rhimes has been one of primetime’s most reliable hitmakers in the dozen years since her first-ever series, “Grey’s Anatomy,” became a force for ABC. By multiple accounts, the uber-showrunner is ready to move on to a new chapter of her career – one that gives her and her Shondaland factory far more room to maneuver from a creative perspective.

Broadcast TV is still the biggest platform in the traditional TV universe but it has become increasingly less attractive to creatives, especially those like Rhimes who have nothing left to prove in the network TV arena.

As development for the 2018-19 cranks into high gear, industry insiders are grousing about a general stasis when it comes to dealmaking and a lack of ambition in programming at a time when the array of material on competing outlets has never been more diverse. “So many remakes and reboots – why?” lamented one top agent.

On the flip side, many network executives privately say they feel like they’re under siege. Success for them is still defined by broad-based hits – think “This Is Us” – but smaller rivals are forking over significantly more money and perks (longer production schedules, shorter episode orders, flexibility in format and length) to draw high-wattage talent.

Executives point to changes in the traditional network playbook such as ABC granting Viola Davis’ wish to do 15 episodes a season of Shondaland’s “How to Get Away With Murder” rather than the standard 22. NBC last season similarly recognized showrunner Michael Schur’s desire to deliver 13 episodes per season of his offbeat comedy “The Good Place.”

From ABC’s perspective, it’s hard to watch Rhimes walk out the door – except that she’s still doing a lot of day-to-day business with them and will be for the foreseeable future. In the coming season, Rhimes has no less than five series in various stages of production – “Grey’s,” “HTGAWM,” the final season of “Scandal,” new midseason legal drama “For the People” and the untitled “Grey’s Anatomy” spinoff revolving around firefighters. And there’s at least one Shondaland pilot in the hopper for the 2018-19 season.

ABC Studios has expanded its focus to producing shows for non-ABC outlets, including its Marvel series for Netflix and the Showtime comedy “SMILF.” Surely, ABC Studios would have bent over backwards to craft a deal that would have afforded Shondaland plenty of leeway to develop for other outlets. But at the same time, the appeal of a heavy courtship from Netflix is easy to understand. No ratings, more creative control, subject matter that need not be mass appeal — for a showrunner who has worked at a prolific pace for 15 years, what’s not to love?

Rhimes’ deal is unlike any other talent pact that the streaming giant has made to date. The company will provide generous overhead for Shondaland and its roughly 30 employees. Rhimes herself will see hefty upfront payments for her work on various shows. Industry sources speculated that the deal would largely be front-loaded with fees because of the fact that Netflix shows live in a walled-garden of the streaming giant’s global platform. There are no international licensing deals or off-network sales to factor into profit participation deals.

Given Rhimes’ stature, however, industry veterans said there is undoubtedly some formula established for additional profit participation, possibly structured around the number of episodes or seasons produced per show. Reps for Rhimes declined to comment on the financial terms.

Even more than the bottom-line concerns, the optics of Rhimes deciding to change lanes and channel her creative energy into Netflix productions is a hit to broadcast TV’s image. The showrunner will keep one foot firmly planted in her legacy shows for the time being — but for the future, Rhimes has voted with her feet.

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