From “Breaking Bad” to “Sons of Anarchy” to “Arrested Development,” Netflix used to get what it wanted when it came to zeitgeist-shifting TV shows with rabid niche audiences.
But as Hulu’s successful bid this week for NBC’s uber-sappy melodrama “This Is Us” just showed, Netflix can’t simply force its will on the programming business anymore, even with a content budget that has swelled to an astronomical $7 billion.
According to Bloomberg, citing inside sources, Hulu paid 21st Century Fox $3.5 million an episode for the hit show, a time-shifting, network drama that tracks the overwrought yet still poignant trials and tribulations of an 80s interracial family into the current time.
That’s widely believed to be the most money Hulu has ever ponied up for a show.
Symbolically, it’s huge. It shows that the traditional programming powerhouses are guarding their hits against a force, namely Netflix, that they now see as a loss-leadering threat; a company more concerned with creating enough content to hoist global expansion, and not so much the day-to-day realities of audience metrics.
In short, Netflix is playing a different game. And Fox—which owns Hulu along with Comcast/NBCUniversal, Disney/ABC and Time Warner Inc.—is working to carve out deals with an SVOD platform that’s in the corporate family
Not that Hulu is some needy slouch of a cousin. The content business’ own SVOD service will spend between $2.5 billion to $4 billion this year, acquiring 3,000 episodes of TV shows including current ABC comedy “Blackish,” as well as venerable repeats including “NYPD Blue,” “Will & Grace” and “30 Rock.”
Sure, there’s a lot of repeats here. But there’s also a lot of established series brands.
Juxtapose that against Netflix’s emerging strategy. With the traditional programming monoliths now skittish about selling content to Netflix, the service provider is increasingly reliant on generating its own hits.
And it’s done that a few times. “House of Cards,” “Orange Is the New Black” and “Stranger Things” were all examples of Netflix’s ability to feed itself amid a market of traditional content monoliths that are weary of the SVOD giant’s market power. Notably, Netflix’s market capitalization is about to eclipse that of Time Warner Inc.
Netflix will reportedly produce more than 200 original shows this year.
But making hits consistently, particularly those that resonate with millions of viewers across demographic groups, isn’t easy. And while Netflix is spending hundreds of millions to lock down name-brand talent like Jerry Seinfeld and Adam Sandler, getting these creators to reach back, get hungry and match their earlier brilliance ain’t a cinch, either.