Why NBC Is Wrong Not To Be Very Afraid of Netflix
Last week, NBCU president of research and media development, Alan Wurtzel, offered television critics at the TCA’s a “Netflix reality check,” offering what he called some “perspective” based on some Netflix viewership numbers they scammed through some very creepy means.
“The notion that they are replacing broadcast TV may not be quite accurate,” he said, noting that a show like Blindspot gets 9 million viewers, while a show like Jessica Jones was only seen by 4 million during the small window in which NBC was monitoring (and probably inaccurately reading) Netflix’s ratings.
Well, here’s a reality check for NBC.
In 2016, Netflix will air 600 hours of original programming. To put that in perspective, Fox airs 780 hours of prime-time programming a year, and most of it sucks. Meanwhile, if you’re a 30-year-old American, you watch — on average — 30 hours of week of television per week, or around 1500 hours a year, which means that you can nearly consume half your fill of television viewing from Netflix original programming alone, and you can probably easily fill the other 800 hours with movies and series from other networks that Netflix streams. That means that an average television viewer with better than average taste in television could not only cut the cord, but could fulfill all their television watching needs for $7.99 per month, or $.27 a day.
Meanwhile, over the weekend, FX chief John Landgraf reiterated what he said last year, that there’s “too much TV,” an assessment supported by the fact that there were over 400 scripted shows last year. With that amount of television, Landgraf says that “it’s harder to launch shows and it’s harder for consumers to see good shows.”
He’s not wrong.
Look no further than NBC for evidence. Of all the new shows that NBC launched in 2015, if I counted correctly, only four were given a second season: The six-episode first season of The Carmichael Show, Aquarius (which had a finale that was seen by only 1.3 million overnight viewers), Chicago P.D., and The Mysteries of Laura. Only one of those four is likely to receive a third season: Chicago P.D..
Likewise, a show like You’re the Worst on FX can get a third-season renewal despite a mere 250,000 overnight viewers. I don’t know how much You’re the Worst makes, but I know that the ad rates for an average broadcast network show is about $25 per thousand, which means that a show with 250,000 viewers probably makes $100,000 in ad revenue an episode, which might not otherwise be sustainable but for being able to sell the streaming rights to a place like Netflix. Netflix, for instance, paid NBC $2 million an episode for streaming rights to The Blacklist, and Netflix is probably the only network with the means — or audience — to support a cost like that for reruns.
In other words, broadcast and cable television is not only losing to Netflix, it’s being propped up by Netflix.
Scripted television cannot continue to survive on an anemic number of viewers, split among over 400 scripted choices (plus unscripted/reality programming). Something has got got to give, but Netflix is making goddamn sure that they’re not the ones that get pushed around in the inevitable contraction.
How much will it cost Netflix to stream all that television in 2016? Oh, just about $6 billion, or more than the GDP of forty (40) countries. The programming budget is more than 7 times the GDP of Samoa. They’re beating networks like FX to shows like Master of None and The Crown because they have more money to spend, and as that base of 70 million subscribers continues to grow worldwide, they’re going to have even more to spend. Because they don’t have to program with a specific prime-time schedule that they have to fill, they can buy anything or everything, meaning they can buy all the best programming while everyone else is stuck with the leftovers.
In other words, if Netflix continues growing at its current pace (15 shows in 2015, 30 shows in 2016, 60 shows in 2017), the streaming service will be able to fill all 1500 of the average number of hours of TV we watch with original programming only, and the rest of television will slowly begin to look like a The Walking Dead apocalyptic wasteland. Netflix won’t even have to buy streaming rights to other television shows, because they will own it all.
You know how old people are always like, “Back in my day, we only had 4 channels to choose from?” In a decade, it may look that way again: Netflix, Hulu, Amazon, FX, ESPN, and HBO will be the major networks, while everything else fades away (Bonus: Most TV in a decade will be commercial free). But sure, NBC, you guys just keep telling yourself that Netflix isn’t replacing broadcast network television while more people probably watch The Black List on Netflix than they do on NBC.
In other words, I continue to maintain that NBC is deader than dead; they just don’t realize it yet.
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