Hollywood’s Netflix problem goes next-level with Shonda Rhimes poaching

Shonda Rhimes’ shows have anchored ABC’s ratings and advertising formula in broadcast prime-time and produced hundreds of millions of dollar in syndication sales, as well as prestige in the form of dozens of Emmy and Golden Globes Awards. (Disney/ABC)

The so-called monster eating Hollywood just took what could be considered its biggest bite of all, with Netflix announcing this week that it has poached prolific producer Shonda Rhimes from Disney/ABC. 

Indeed, Netflix stock slipped last week on reports that the Walt Disney Company had forsaken the Silicon Valley SVOD giant. In fact, with Rhimes reportedly informing Disney weeks ago that she would leave ABC at the end of her contract next year, it now looks more like the Burbank media conglomerate was fleeing its life before any more damage could be inflicted upon its creative ranks. 

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Since emerging in 2005 with her breakthrough hit, the stalwart ratings draw "Grey’s Anatomy," Rhimes has been arguably the most productive creative force in ABC Television history, spewing follow-ups including the successful Grey’s spinoff "Private Practice," as well as current ABC hits "Scandal" and "How to Get Away With Murder." 

Not only have Rhimes’ shows anchored ABC’s ratings and advertising formula in broadcast prime-time, they’ve produced hundreds of millions of dollar in syndication sales, as well as prestige in the form of dozens of Emmy and Golden Globes Awards. 

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Of course, Netflix, which will spend $6 billion to acquire and produce video programming this year, has been enlisting A-List Hollywood talent for several years. It was "Fight Club" director David Fincher who got the service’s first major hit, "House of Cards," off the ground in 2013. And it was "Weeds" creator Jenji Kohan who solidified the SVOD company’s original series beachhead the same year with the debut of "Orange Is the New Black."

Netflix also started working with a number of well-known motion picture talents, Adam Sandler among them. 

Since that time, as Netflix has steadily increased its spending on original movies and TV series to levels on unthinkable to a traditional television industry largely still beholden to Nielsen ratings and ad dollars, creatives both off-screen and on have migrated to the service. 

Not only has Netflix put established, prolific producers under broad-reaching deals with complicated backend formulas, it has also locked up emerging TV producers, like the fraternal duo of Matt and Ross Duffer ("Stranger Things") and Zal Batmanglij and Brit Marling ("The OA"). Netflix has also gained attention by spending hundreds of millions of dollars to lure top comics like Dave Chappelle, Louis CK, Chris Rock, Jerry Seinfeld and Amy Schumer.

The poaching has also extended to the executive suites, with top production company operatives like former 21st Century Fox Television Studios executive Tara Flynn leaving for Los Gatos, California.

“We’re extremely friendly to artists,” said Lisa Nishimura, who oversees Netflix’s stand-up comedy business, in an interview with FierceOnlineVideo earlier this year. “We release their work fully intact, and we don’t censor or edit their work, which might be the case with a typical broadcast network. We fully support the comedians we work with and their vision.”

Of course, none of this comes as a surprise in the studio halls of Century City and Burbank, with the Wall Street Journal publishing a story in March headlined, “Netflix: The Monster That’s Eating Hollywood.”

That story quoted Fox TV production chief Bert Salke as saying, “Netflix is public enemy No. 1,” in a suit filed by the studio earlier this year against Netflix. 

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If all of the aforementioned poaching rendered Netflix the leading public enemy in Hollywood’s mind, the town’s mental state now has to be seriously questioned with the departure of one of its true remaining broadcast TV creative stalwarts.

Previously, Netflix had poached talents like Kohan, who had already worked in the subscription business at Showtime. Big-name film talents like Ridley Scott, meanwhile, have dabbled in SVOD original series (Amazon's "Man in the High Castle"). And there have been plenty of A-listers on the way down to the B-list signing on (think former Sony contract players Sandler and Seinfeld). Lesser known rank-and-file producers had migrated to Netflix, as well.

But top series creatives had seemed safe from poaching. 

Who could be next? "Big Bang Theory" mastermind Chuck Lorre? "Modern Family" creators Steven Levitan and Christopher Lloyd?

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For Tinseltown, it’s probably going to get worse before it gets better. 

At last week’s Television Critics Association bi-annual meetings in Los Angeles, FX President and emerging industry pundit John Landgraf lamented the unfair competitive juxtaposition his company faces against not only Netflix, but rivals Hulu and Amazon, too.

“Understand that a good share of [original series] programming is being produced at a loss, in the belief that it will drive a massive shift in the share of consumption” that will swamp competitors,” Landgraf said.