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The Numbers Behind the Cancellation Of All Your Favorite Netflix Series

By Dustin Rowles | Streaming | May 2, 2019 |

By Dustin Rowles | Streaming | May 2, 2019 |


Last week, Netflix unceremoniously pulled the plug on Santa Clarita Diet, and while we don’t know how the ratings on that show were (because Netflix does not provide those numbers), anecdotally, I can tell you that the show was popular among those in a certain demo, and that it had apparently shown up in a number of rankings for the ten most binged streaming shows on TV. Likewise, One Day at a Time was definitely well regarded and seemed to be the kind of show that did well, at least among those who talk about television online. Travelers, meanwhile, was canceled earlier this year, and it, too, appeared in several of those Ten Most Streamed Shows lists. Again, it’s only anecdotal, but I can also tell you that Google traffic to our site for posts about Travelers was huge (our review of the second season of Travelers was, in fact, the 7th most popular post of 2018).

Those three shows all have something in common — along with Daredevil and Bloodline — and it’s that they were all canceled after three seasons. In fact, if you look at the roster of Netflix Original TV Shows, you’ll notice that with only a few exceptions — House of Cards, Orange is the New Black, Narcos, Grace and Frankie — that most Netflix originals do not make it beyond their third seasons. Is it because of low ratings? We don’t know, because they won’t tell us. But there’s probably another reason at play, and it has little to do with how many people watch a show. From THR:

Backend has always been awarded based on the number of profit participation points given to a show’s creative team. But the points tend to end up being worthless if you can’t resell the show. So Netflix and other SVOD platforms have started assigning a minimum guaranteed value to each point that they then pay out to talent when a show hits a certain season, often starting in the third but typically only really lucrative in the fourth and beyond. The catch? Most shows aren’t going to last that long. “They’re often cutting these shows off before the backend asymptote really hits,” says talent lawyer Lev Ginsburg, who notes that many believe a key factor in the streamers’ cancellation decisions is the fact that the financial outlook becomes much more talent-friendly the longer shows go.

In other words, Netflix pulls the plug before they have to pay more to their talent. And from a business standpoint at Netflix, why not? For the streamer, there’s not a huge difference between a two-season show and a four-season show in terms of the number of subscribers Netflix can attract. Again, from THR:

At least one source says he has heard anecdotal evidence of internal analytics that suggest the streamer doesn’t gain any additional subscribers when a show goes beyond two seasons. “No one is sitting there going, ‘Ah man, I can’t wait for Lost in Space to come back on.’ It’s one of 500 boxes on that screen, and when they pay $130 million to put 10 more episodes up, all that happens is there are 10 more episodes behind that box,” says one insider. “Ted Sarandos has to decide, ‘Is anybody going to subscribe to Netflix because of more episodes behind that box?’”

This is the downside to Netflix’s business model. The streamer doesn’t rely on advertising, so it cannot command higher ad rates for more popular series, so there’s much less incentive to continue producing episodes, particularly if the additional episode count does not affect subscription numbers. Is anyone canceling their Netflix accounts because of the loss of One Day at a Time or Santa Clarita Diet? Probably not. Are there more people subscribing because of the first season of Umbrella Academy? Probably. And as long as Netflix hangs on to the super popular shows like Stranger Things and Queer Eye, no one is going to drop their $12 monthly subscription fees, no matter how many shows the streaming abruptly cancels.

This is not necessarily a bad thing. In most cases, three seasons is fine. If you had said to me at the outset that Santa Clarita Diet and One Day at a Time are going to get three seasons, I would’ve been happy with that. A show doesn’t really need more than three seasons. But wouldn’t it be nice if we knew that in advance? Wouldn’t it be even nicer if the people producing the shows knew in advance so they wouldn’t end their shows on cliffhangers? Three seasons is great if there is also some closure. Otherwise, it’s just cruel. Can you imagine if The Good Place were airing on Netflix, and Mike Schur didn’t get to complete it? Of what if Lost only ran for three seasons and abruptly ended? Or Breaking Bad?

Producers and talent should at least know who they are getting into bed with here. If they have plans for five seasons of a series, they should know that the popularity of the series will not necessarily save it and when they get to the third-season finale, they should at least provide a season finale that theoretically could also act as a series finale (which, thankfully, Travelers managed to do).

Source: Santa Clarita Diet

Header Image Source: Netflix