1/ On Netflix’s Marvel cancellations, there seems to be some nuance that’s missing which tells you a lot about the future of OTT video in 2019. I’m sure both sides wanted a renewal, but the *absolute* not just relative value for both sides continued to decline. And thus no more.
2/ Netflix reportedly holds the right to keep renewing these shows, irrespective of Disney's preferences. Disney may be entering Netflix's territory with Disney+, but that didn’t drive the cancellations. Netflix was making a rationale decision based on quality, cost, viewership
3/ To point, the shows will remain NETFLIX ORIGINALS for years, Disney would have to buy them back (and says they don’t fit with Disney+’s positioning and won't be rebought) and there’s likely a hold on re-using the IP in TV (i.e. Disney can’t just launch a new Luke Cage in 2019)
4/ The reality is these shows were unprecentedly expensive (Netflix reportedly paying 60% markup), but they weren’t very good, audiences have undoubtedly declined precipitously (you can see this in the marketing spend) and it’s hard to grow audience in late seasons (con't)
5/ With old, mediocre shows it's just about viewer retention each year
To point, Disney never put much effort in their Netflix shows. Daredevil had 3 showrunners in 3 seasons, Luke Cage was 2 in 2, Jessica Jones 2 in 3, etc.
(And the teased MCU integration never happened!!)
6/ It's telling that the signature achievements and performers of the MCU are the 'Avengers' films, but the 'Defenders' was one of the least buzzy, least viewed titles (in part because the preceding two series, the back half of Luke Cage and all of Iron Fist, were very poor)
<Sidebar> Poor quality always catches up to you with content https://t.co/7ruz9R0Nm7
7/ The Netflix-Marvel deal was set at a time (Nov 2013) when NFLX needed big, buzzy IP that stood out and didn't need to be managed internally. Willing to pay whatever it took for it
And note, the deal was meant to be single seasons. Despite its end, Marvel/Netflix was a success
8/ In 2019, Netflix has a huge internal pipeline - fueled by mega-deal with Shonda Rhymes, Ryan Murphy etc - and there's no markup for their own stuff
And Netflix's audience and brand are much larger. This means Netflix's needs grew as the contribution of the Marvel shows waned
9/ And with Marvel now focused on their own SVOD shows (e.g. the MCU Loki series for Disney+), it’s hard to imagine Disney’s best foot forward was going to go towards aged Netflix series
10/ Netflix reportedly wanted to shorten the seasons, thereby reducing total spend and improving retention and quality (Netflix’s shows, especially the Marvel ones, are famously bloated). Reportedly from 13 eps to 6-8.https://t.co/FduR4bW4I8
11/ Which means Disney would have to effectively reduce their revenue from 2/3rds, while keeping valuable characters unavailable for all other live action applications, while focusing on their own D2C. And while Netflix could force a renewal, they couldn’t do so at new terms
12/ So Disney liked balked. The value wasn’t there for either party. It once was. And everyone is now tired of financing another party’s enterprise value growth – the economic incentives (cost minimization and upside maximization) drive vertical integration.
Fin/ In short, it just wasn’t working for anyone. Including most of the series’ original fans.
For more on how Originals work https://t.co/1p7olngzgX
Frantz Paul @FrantzPaul718
Matt this is a great thread. Couple of questions. So Disney could start new Daredevil and Luke Cage shows on their new streaming service but would need to do a complete reboot? Can’t start from where the Netflix shows left off? And could Disney keep these same actors?
Also - To give an numbers example:
Marvel shows need 60% more viewership than one made by Netflix, or 30% more made by another producer, just to be even.
If we assume Marvel shows have lost 50% of their S1 averages, it's possible DD S4 is 3x+ more expensive than alternatives
Probably have to wait 1-2 years
Frantz Paul @FrantzPaul718
So if you had to make a guess, what do you think happens with Daredevil and Luke Cage and the defenders in general from here? Just done for? Because I’m sure Punisher and Jessica Jones are next to be axed. Marvel just sits on those properties you think?
Also important: the importance of capital letter "Quality" is only growing over time. Netflix is increasingly focused on quality/impact over tonnage https://t.co/FduR4bW4I8
Marvel series were primarily about the latter.
Guessing this is the last season (certainly Netflix won't market them hard)
Then they hibernate for a bit
No idea if/where/how they come back, probably as side-characters without origin stories a la Spider-Man in Civil War
Frantz Paul @FrantzPaul718
Thanks Matt. What I was thinking too. Your thread was very informative. I thought this entire time it was Disney pulling them so they could take them to their new streaming site, until I read a writer on here say the marvel execs were stunned too. Crazy stuff.
To be super clear. The shows will not be revived on Disney+, Hulu, Amazon, etc
1/ Netflix would have blocking rights
2/ Netflix won't sell early seasons
3/ No one would want to drive their customers to Netflix for S1-3
4/ Characters are likely contractually hibernated for 1-2yrs
5/ Disney has said they don't fit Disney+, even when the season rights revert after 5+ years
6/ Talent has been released and is very hard to re-assemble (usually far costlier)
7/ There is more upside in starting fresh, with a different take (see Spider-Man Homecoming)