Netflix invests in successful productions but quickly gives up on some series, much to the dissatisfaction of many subscribers. This strategy alters how the audience relates to streaming content and gives rise to a dangerous trend for the industry, experts say.
Netflix doesn’t hesitate to drop a series that doesn’t perform as expected. Just this month, the video streaming giant decided not to continue the series „KAOS,” a satirical reinterpretation of Greek mythology with Jeff Goldblum as Zeus, just a month after the first season was released.
It was a huge shock to fans, as not only did the series have a stellar cast and story, but it also made it into Netflix's Top 10 most-watched productions in the first month. However, The Hollywood Reporter evaluated the series' 14.9 million views in the first four weeks as "average" by the platform's standards.
Additionally, Netflix has announced that "That '90s Show," which has an 81% rating on Rotten Tomatoes, and "Unstable," starring Rob Lowe and his son John Owen Lowe, have not been renewed. According to Deadline, the decision to cancel "Unstable" comes after the series failed to make it into the Top 10.
Secret Data Determines Which Series Disappear
Netflix has become famous for mercilessly canceling productions, but it claims to only give up on those with the lowest audience numbers. However, the giant keeps its audience figures for its productions secret, notes Newsweek.
According to Dan Goman, CEO of the media technology company Ateliere Creative Technologies, Netflix's decisions are driven by data values and performance. Although a series might seem like a sure success if it has a strong Hollywood cast, it's not always the case, as the cancellations of "Kaos" and "Unstable" demonstrate.
"Netflix's data-driven approach plays a key role in its quick decisions about content, including the swift cancellation of series like 'KAOS'.
While star-studded casts may initially attract attention, Netflix's reliance on its own data – much of which is not shared publicly – provides unique insights into viewer behavior.
This allows Netflix's leadership to make decisions that may seem brutal but are based on clear performance values. These may include not only raw viewing figures but also watch duration, abandonment rates, and audience retention in specific demographic categories," he explained.
"Access to this private data gives Netflix a more nuanced perspective on a production's performance, which could explain why it cancels projects that don't meet certain thresholds quickly, even if they have growth potential.
Thriving on efficiency and prioritizing high-performance content, Netflix ensures that its catalog remains clear and captivating, a necessity in an extremely competitive market," the expert added.
Prematurely Buried Unfinished Stories Change the Audience and Industry
While Netflix's trend of immediately giving up on underperforming content may seem like a sign of failure, for Goman, it's evidence of the company's commitment to managing a high-performance business.
"By swiftly eliminating content that doesn't align with its performance values, it can focus resources on productions that have a better chance of sustaining long-term viewer engagement, contributing to maintaining its leadership position in the streaming world," he said.
In perspective, this trend could push the industry to rethink how it fosters audience loyalty, as more platforms may adopt similar algorithm-based strategies to match content with niche audiences.
However, not all experts believe that this policy will help Netflix and the streaming sector in the long term.
"While data will decide whether Netflix will renew or cancel productions, its graveyard of unfinished stories and series that didn't get a chance to find their audience will grow," said Stefan Lederer, CEO and founder of Bitmovin, a company providing video streaming infrastructure for various companies.
"A vital tool Netflix uses when deciding to keep or end a series is its completion rate. The general rule is that if 50% of the show's audience doesn't finish the season, it's unlikely to be renewed.
However, there's an argument to consider: that Netflix is too hasty when preparing productions. Not all TV series will immediately become a global phenomenon, like 'Stranger Things' or 'Squid Game'.
For example, the first season of the American version of 'The Office' was very unpopular with the audience, but they changed the format and some of the characters for the second season, and it became one of the biggest sitcoms," Lederer explained.
According to him, Netflix needs to consider that canceling productions too quickly could affect subscribers' willingness to watch new series if they think they might be canceled after one season.
Elizabeth Cox, founder and CEO of the independent production company Should We Studio, agrees that Netflix's approach to canceling shows creates frustration, not only among viewers but also in the entertainment industry as a whole.
"Netflix wants to make money, creators want to make art, and the audience wants to have fun, and while it sounds plausible in theory that audience enjoyment directly translates into studios/distributors making money, I don't think the largest and most profitable audience is necessarily the most loyal," she said.
Shows that generate the most discussion and media buzz are often not widely watched, and great productions are canceled all the time.
However, assessing performance based on views doesn't capture this kind of attention, and it's not clear how important views are as an indicator of revenue potential on a subscription-based platform, Cox emphasizes, adding that it will be increasingly difficult for independent producers to gain access to major video streaming platforms.
T.D.