Netflix Inc. has not been shy about flashing wads of cash to acquire TV series and films from some of Hollywood’s biggest names, but it’s drawing a line at burning cash on content it doesn’t think enough people watch.
Netflix NFLX, -4.17% axed the sci-fi drama series “Sense8” on June 1 after two seasons. A week before, Netflix had put an end to “The Get Down” after just one season. Prior to those cancellations the company had only canceled five series since delving into original programming.
While management is quick to praise certain shows, they keep any specific details about the viewership of their series close to the vest.
After years of sending shows straight to series rather than waiting to see a pilot, renewing just about everything and bobbing when the industry weaved, Netflix is starting to take a more traditional tone.
“Relative to what you spent, are people watching it? That is pretty traditional,” Netflix chief content officer Ted Sarandos said at the Producers Guild of America conference over the weekend, Variety reported. “When I say that, a big show for a huge audience is great. A big, expensive show for a tiny audience is hard, even in our model, to make that work very long.”
“The Get Down,” director Baz Luhrmann’s grandiose series detailing the birth of rap and hip hop in the South Bronx during the late ’70s, cost Netflix $120 million, or about $11 million per episode. That’s among the most expensive per-episode TV shows ever. And reports have pinned “Sense8” with a $9 million per-episode price tag.
There’s no telling how many people watched either series, but the cancellation of “Sense8,” drew out its passionate fans, who were in an uproar. Some publicly called for users to delete their Netflix accounts. Just a few hours after the news, the hashtag #ReviveSense8 was trending worldwide on Twitter and fans created petitions to keep the show alive.
The show of support was the biggest response to a Netflix show being cancelled. Late last week Netflix responded with a post on the show’s official Facebook page:
“We’ve seen the petitions. We’ve read the messages. We know you want to #RenewSense8, and we wish we could #BringBackSense8 for you,” the message read. “The reason we’ve taken so long to get back to you is because we’ve thought long and hard here at Netflix to try to make it work, but unfortunately we can’t.”
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That statement indicates that not even Netflix can keep up with Netflix’s kind of spending. Chief Executive Reed Hastings recently told CNBC that the streaming giant should look to cancel more shows to make room for other projects. And in the company’s most recent first-quarter letter to shareholders, Hastings wrote that its film business needs to start seeing a better return on investment.
Netflix shares, while closing down more than 4% on Monday, have gained more than 22% in the year to date. The S&P 500 index SPX, -0.10% is up nearly 9% during the same time frame.