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by Jason Snell & Dan Moren

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Linked by Jason Snell

‘Netflix is at an inflection point’

The Hollywood Reporter’s excellent tech/digital reporter Natalie Jarvey has a long piece about how Netflix is changing its ways as competition from other streaming services rises, its catalog becomes ever more focused on Netflix Originals, and its growth shifts to markets outside the U.S.:

Netflix also isn’t keeping its shows around for very long. It’s become standard practice for the streamer to cancel a project after a second or third season, cutting creators off from bonuses that don’t kick in until later seasons — though Netflix insiders argue that someone who creates a hit for the streamer ultimately is paid handsomely. Cancellation decisions have been hard for creative partners to understand because viewership metrics have historically been opaque. Talk within dealmaking circles has centered on Netflix’s internal metric — dubbed “efficiency” — for determining if a show is worth renewing. The simplest definition of efficiency, per sources, is the ratio of the show’s cost to number of viewers, though Netflix is said to place more value on luring new subscribers or keeping those who seem in danger of canceling.

Netflix has data that broadcast networks would’ve killed for, but most of it is opaque to the outside world (and often to the people making the shows). It is interesting to ponder how Netflix’s model may make it less likely for a well-loved show to continue beyond two or three seasons, however. On linear TV, hit shows run for years as every last bit of value is squeezed out of them by their networks and studios. Netflix’s evaluations of value appear to be different—and that may explain why your favorite show got cancelled after three seasons.

There’s also a strong argument to be made that narratively, most shows don’t really deserve to last for long stretches of time—and that burning bright for a few short seasons is better than slowly fading away like the 15th season of Supernatural.

I’m not sure either approach is fundamentally better or worse, but they’re quite different.