Why Netflix keeps cancelling your favourite shows after two seasons

It’s hard to imagine now, but when the US-version of The Office first premiered on NBC in 2005, the show was panned by both critics and audiences. People thought it was unoriginal, unfunny and a bad clone of the UK version. But NBC made the call to renew the show anyway. It seemed to be the right one, because from season two onwards, The Office US was winning plaudits everywhere, which lasted nine glorious seasons.
In the age of streaming, however, many TV shows aren’t afforded the same courtesy, nor given the time to prove their worth. Data from media analytics firm Ampere Analysis suggests that average Netflix Original gets just two seasons before being cancelled.

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Last month, sci-fi show Altered Carbon was inducted into Netflix’s expanding season two cancellation club, joining Sense8, The OA and Luke Cage in being axed after just two seasons. What followed was the now-traditional furious fan campaign to save the series from an early death.
Apart from the one-off Sense8 movie finale, which was commissioned following an aggressive campaign from fans, most attempts to bring a Netflix Original back from cancellation often end in failure. The company’s decision to cancel a show is often final – just ask #SaveTheOA. But while it’s sad for fans to see a show cut dramatically short, for Netflix, it comes down to the data.Netflix doesn’t release rating figures in the same way as linear television networks, but it’s been widely reported that it decides to renew or cancel its shows based on a viewership versus cost of renewal review process, which determines whether the cost of producing another season of a show is proportionate to the number of viewers that the show receives. “The biggest thing that we look at is, are we getting enough viewership to justify the cost of the series?” explained Netflix’s vice president of original programming Cindy Holland in 2018, during the Television Critics Association’s summer press tour.
Shows can have a dedicated fanbase, like Altered Carbon and The OA, but they might not have been successful enough to have amassed a Netflix-wide viewership. Tom Harrington, an analyst at Enders Analysis, explains that the ideal show for Netflix is one where the large majority of people who subscribe to Netflix will watch it, and not just one dedicated fanbase. Something like Stranger Things can bring in new audiences, and maintain current ones, which is why it keeps getting renewed.
According to a letter sent to the House of Lords Communications and Digital Select Committee, Netflix also considers three other metrics when it decides whether or not to cancel or renew a show. It looks at two data points within the first seven days and first 28 days of a show being available on the service. The first is ‘Starters’, or households who watch just one episode of a series. The second data point is ‘Completers’, or subscribers who finish an entire season.

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The final metric is ‘Watchers’, which is the total number of subscribers who watch a show. In an interview with Vulture, 28 day viewership, which refers to the number of people who watch an entire season of a show within a month, was consistently referenced as one of the metrics used to decide renewal. All of that data helps Netflix paint a picture about whether to renew your favourite series or not.More money is on the line for Netflix as well. Like other streaming services, it differs from traditional television networks in that it commissions an entire season of a show at once, rather than just a single pilot. Netflix also employs a cost-plus model, which means that it pays a show’s entire production costs, plus a 30 per cent premium on top.
Historically, what networks have done is pay a portion of those production costs, and then get the production company to fork up the rest. The idea is that shows will be shopped internationally, going to other broadcasters and even streaming services, continuing to make money for the producers. But when something is on Netflix, it typically stays on Netflix.
Netflix tries to make itself more appealing to TV show producers by giving them bonuses and pay bumps the longer a series carries on. Harrington says that shows on Netflix are more expensive after season two and even more expensive after season three, with the premiums going up each season. “They have to give [a show] more money per series, and if they decide to recommission it, it becomes more expensive for them to make,” he explains. “Because of that, so many more shows are cancelled after two series because it costs them more.”
Financially, it makes more sense for Netflix to commission a new show than to renew an underperforming show which is only going to get more expensive the longer the series goes on. Tim Westcott, research and analysis director at Omdia, says that in terms of investment in content, Netflix is still in the growth stage. “In the US, subscriber growth has levelled off a bit, and they’ve now got a lot of competition in the US. But they’re adding many hundreds of thousands of subscribers every quarter around the world. They’re still in a phase where they’re still throwing fuel on the engine to keep that subscriber growth going,” he explains, adding that it’s ultimately looking to increase volume so that it can churn out new shows that it can promote to attract more subscribers.

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According to Deadline, if a show hasn’t grown significantly in popularity over seasons two or three, then Netflix thinks that it’s unlikely to gain any new viewers beyond those already watching it.
Ultimately, if viewers want their favourite show to be renewed, then the first 28 days are critical periods to be both a watcher and a completer, and they just have to hope that it’s attracted enough of a mass audience to warrant the cost of renewal by its second season. As Harrington asks: “If a show hasn’t proven itself by series two, then why would you make any more of it?”
Alex Lee is a writer for WIRED. He tweets from @1AlexL
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