<story><title>America has never had so much TV, and even Hollywood is overwhelmed</title><url>https://www.washingtonpost.com/news/the-switch/wp/2016/11/07/america-has-never-had-so-much-tv-and-even-hollywood-is-overwhelmed</url></story><parent_chain><item><author>matwood</author><text>It would be interesting to know how many people subscribe and unsubscribe to Netflix for a single show. I tend to think it is a small minority, but without numbers it is hard to know.&lt;p&gt;Also, the up front production costs do not need to be recaptured on first watching. The 90M to produce Marco Polo creates and asset that can be sold, traded, etc... Eventually Netflix will have so much good, custom content that a new person joining will take years to go through it all if possible. What we are watching now is them bootstrap that process, but it will not always be that way.</text></item><item><author>thenomad</author><text>It&amp;#x27;s probably not quite as rosy as you state here, I&amp;#x27;m afraid.&lt;p&gt;Let&amp;#x27;s look at a 380,000 viewer show. It&amp;#x27;s very unlikely that ever single one of those viewers paid for Netflix for a solid year just to get access to that show (which will have all its episodes released at once).&lt;p&gt;So let&amp;#x27;s assume it has significant cult appeal, meaning a full 25% of its viewers are primarily subscribed for that show and things like it. (I&amp;#x27;d say that&amp;#x27;s likely to be very high, based on my experience in the narrative video world, but let&amp;#x27;s be optimistic.) And let&amp;#x27;s say, based on subscribing for that show and forgetting to cancel for a couple of months (or subsequently being retained by another 380k viewer show), that Netflix gets 3 months&amp;#x27; worth of revenue from them.&lt;p&gt;So that&amp;#x27;s 380k&amp;#x2F;4 = 95,000 * $7.99 * 3 = $2.28m revenue attributable to that show.&lt;p&gt;Of the shows you mention:&lt;p&gt;Marco Polo cost $90m to produce for the entire season.&lt;p&gt;Black Mirror doesn&amp;#x27;t have figures online, but it&amp;#x27;ll be around $3m per episode if it&amp;#x27;s similar to other BBC shows. So that&amp;#x27;s $18m.&lt;p&gt;Unbreakable Kimmy Schmidt doesn&amp;#x27;t have figures available, but based on Tina Fey&amp;#x27;s fees for other shows and general knowledge of how much TV costs, I&amp;#x27;ll guess at about $3m an episode. (Might be cheaper if they&amp;#x27;re being clever about it, so could be as low as $2m) So that&amp;#x27;s $39m.&lt;p&gt;So, assuming that Netflix are just getting revenue from retained subscribers, and they get the figures above, we&amp;#x27;re looking at losses of:&lt;p&gt;$88m for Marco Polo.&lt;p&gt;$16m for Black Mirror.&lt;p&gt;$37m for Unbreakable Kimmy Schmidt.&lt;p&gt;Obviously the situation is far more complex than that - they&amp;#x27;ll be financing with coproduction deals, they&amp;#x27;re looking for growth rather than revenue, they also acquire a lot of content cheaply (very, very cheaply in some cases) through licensing - but it&amp;#x27;s certainly not rosy enough that they&amp;#x27;ll be happy with 380k viewers for shows they&amp;#x27;re making.</text></item><item><author>Throwaway23412</author><text>&amp;gt;The networks are gambling big in a risky industry where only the most prominent shows survive. While top-rated hits can garner millions of viewers, FX research found that the bottom 20 percent of shows averaged around 380,000 viewers, a daunting prospect for networks that depend on big audiences for ad revenue.&lt;p&gt;Only the prominent shows survive in the ads business model that currently governs these networks. If an Amazon or Netflix show gets 380,000 viewers and this show convinces the majority of those viewers to keep their subscription, then the respective streaming giant has already accomplished their goal. That&amp;#x27;s another $3.8M (or whatever the average subscription amount is) in monthly subscription revenue. They&amp;#x27;re not beholden to advertisers. A typical &amp;quot;Black Mirror&amp;quot; viewer might not overlap with a typical &amp;quot;Marco Polo&amp;quot; viewer or a typical &amp;quot;Unbreakable Kimmy Schmidt&amp;quot; viewer, but, as long as each viewer has a reason to stay subscribed, Netflix doesn&amp;#x27;t care if said shows were to have a low average number of viewers.</text></item></parent_chain><comment><author>thenomad</author><text>Yes, usually you&amp;#x27;d have to consider syndication rights, DVD sales, merch, etc when looking at a show&amp;#x27;s overall profitability.&lt;p&gt;OTOH, it would appear in many cases those rights aren&amp;#x27;t going to Netflix directly. See&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.wired.com&amp;#x2F;2014&amp;#x2F;03&amp;#x2F;comcast-bites-netflix-snagging-big-show&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.wired.com&amp;#x2F;2014&amp;#x2F;03&amp;#x2F;comcast-bites-netflix-snagging...&lt;/a&gt;&lt;p&gt;, for example.&lt;p&gt;(Of course, this is how Netflix is getting so many shows made - they&amp;#x27;re trading those rights to the production company in exchange for not footing the entire production cost.)&lt;p&gt;It&amp;#x27;s worth noting, though, that those will scale strongly with the initial success of the show. Breaking Bad DVD sales were huge. The sales of DVDs of, say, &amp;quot;Alphas&amp;quot; on Sci-Fi will not be nearly as impressive.&lt;p&gt;As for subscribe numbers - I don&amp;#x27;t have hard figures, but based on years of persuading people to watch video-based narrative content I&amp;#x27;d guess 5% of total viewers for a weak show, 10% for a strong show or one that&amp;#x27;s capturing a new audience, 18% for one that&amp;#x27;s both very strong and targeted at a radically new audience. Occasional outliers like Breaking Bad and Game Of Thrones will probably provide higher capture for the subscription services showing them, but they&amp;#x27;re 1-3 times a decade phenomena.</text></comment>
<story><title>America has never had so much TV, and even Hollywood is overwhelmed</title><url>https://www.washingtonpost.com/news/the-switch/wp/2016/11/07/america-has-never-had-so-much-tv-and-even-hollywood-is-overwhelmed</url></story><parent_chain><item><author>matwood</author><text>It would be interesting to know how many people subscribe and unsubscribe to Netflix for a single show. I tend to think it is a small minority, but without numbers it is hard to know.&lt;p&gt;Also, the up front production costs do not need to be recaptured on first watching. The 90M to produce Marco Polo creates and asset that can be sold, traded, etc... Eventually Netflix will have so much good, custom content that a new person joining will take years to go through it all if possible. What we are watching now is them bootstrap that process, but it will not always be that way.</text></item><item><author>thenomad</author><text>It&amp;#x27;s probably not quite as rosy as you state here, I&amp;#x27;m afraid.&lt;p&gt;Let&amp;#x27;s look at a 380,000 viewer show. It&amp;#x27;s very unlikely that ever single one of those viewers paid for Netflix for a solid year just to get access to that show (which will have all its episodes released at once).&lt;p&gt;So let&amp;#x27;s assume it has significant cult appeal, meaning a full 25% of its viewers are primarily subscribed for that show and things like it. (I&amp;#x27;d say that&amp;#x27;s likely to be very high, based on my experience in the narrative video world, but let&amp;#x27;s be optimistic.) And let&amp;#x27;s say, based on subscribing for that show and forgetting to cancel for a couple of months (or subsequently being retained by another 380k viewer show), that Netflix gets 3 months&amp;#x27; worth of revenue from them.&lt;p&gt;So that&amp;#x27;s 380k&amp;#x2F;4 = 95,000 * $7.99 * 3 = $2.28m revenue attributable to that show.&lt;p&gt;Of the shows you mention:&lt;p&gt;Marco Polo cost $90m to produce for the entire season.&lt;p&gt;Black Mirror doesn&amp;#x27;t have figures online, but it&amp;#x27;ll be around $3m per episode if it&amp;#x27;s similar to other BBC shows. So that&amp;#x27;s $18m.&lt;p&gt;Unbreakable Kimmy Schmidt doesn&amp;#x27;t have figures available, but based on Tina Fey&amp;#x27;s fees for other shows and general knowledge of how much TV costs, I&amp;#x27;ll guess at about $3m an episode. (Might be cheaper if they&amp;#x27;re being clever about it, so could be as low as $2m) So that&amp;#x27;s $39m.&lt;p&gt;So, assuming that Netflix are just getting revenue from retained subscribers, and they get the figures above, we&amp;#x27;re looking at losses of:&lt;p&gt;$88m for Marco Polo.&lt;p&gt;$16m for Black Mirror.&lt;p&gt;$37m for Unbreakable Kimmy Schmidt.&lt;p&gt;Obviously the situation is far more complex than that - they&amp;#x27;ll be financing with coproduction deals, they&amp;#x27;re looking for growth rather than revenue, they also acquire a lot of content cheaply (very, very cheaply in some cases) through licensing - but it&amp;#x27;s certainly not rosy enough that they&amp;#x27;ll be happy with 380k viewers for shows they&amp;#x27;re making.</text></item><item><author>Throwaway23412</author><text>&amp;gt;The networks are gambling big in a risky industry where only the most prominent shows survive. While top-rated hits can garner millions of viewers, FX research found that the bottom 20 percent of shows averaged around 380,000 viewers, a daunting prospect for networks that depend on big audiences for ad revenue.&lt;p&gt;Only the prominent shows survive in the ads business model that currently governs these networks. If an Amazon or Netflix show gets 380,000 viewers and this show convinces the majority of those viewers to keep their subscription, then the respective streaming giant has already accomplished their goal. That&amp;#x27;s another $3.8M (or whatever the average subscription amount is) in monthly subscription revenue. They&amp;#x27;re not beholden to advertisers. A typical &amp;quot;Black Mirror&amp;quot; viewer might not overlap with a typical &amp;quot;Marco Polo&amp;quot; viewer or a typical &amp;quot;Unbreakable Kimmy Schmidt&amp;quot; viewer, but, as long as each viewer has a reason to stay subscribed, Netflix doesn&amp;#x27;t care if said shows were to have a low average number of viewers.</text></item></parent_chain><comment><author>Ntrails</author><text>my &amp;quot;to do list&amp;quot; on netflix probably has 500 hours of television on it.  That&amp;#x27;s ignoring the random stuff I&amp;#x27;ll see as new and just watch (eg gone girl) or the re-watching of a classic (hello breaking bad).&lt;p&gt;Netflix still has shitty recommendations, and annoying pushing of content I&amp;#x27;m not interested in.  But by the time I get through all the things I actually want to watch as of today I&amp;#x27;d be amazed if there wasn&amp;#x27;t almost as much new content.  In other words I don&amp;#x27;t think I&amp;#x27;ll ever run out.</text></comment>