Producers hoping to continue selling TV shows to Netflix should prepare for a future where those deals only run for two or three seasons max, before Netflix pulls the plug on the program.
The key hits:
- Typically, a TV show needs to go five or six seasons — or 100 episodes — to be considered a profitable success for the producer making the show.
- By taking away “back-end” revenue streams in exchange for paying 30 percent on top of production costs, Netflix has already dramatically shifted TV show economics.
- But very few Netflix shows have gone longer than three seasons.
- This is reportedly because production costs for shows go up meaningfully after the third season, regardless of whether Netflix owns the show or licenses it from an outside studio.
- And with unprecedented volume in original programming, Netflix doesn’t need 100 episodes of a TV show; it’s more economically feasible to have 30 episodes of several similar TV shows.
- With Disney, WarnerMedia and other big media giants prepping streaming services, it’s likely they mimic this aspect of Netflix’s playbook.
It used to be that if a TV show made it to five or six seasons — or 100 episodes — then it was considered a success. By this point, the show had enough episodes in the can to quality for syndicated reruns. Revenue from syndication, as well as additional distribution in international markets, helped all of the show’s profit participants make more money on the “back end.”