Ok, now before you read this, a disclaimer, I have no insider information on this topic. This is merely pondering the questionable timing of the cancellations and Netflix’s explanation of why the canceled the shows. Ok now the rant.

So if you haven’t heard yet Netflix last month canceled both Iron Fist and Luke Cage. A lot of fans, me included, were upset and confused by this information. Those shows both ended on major cliff hangers. At first it was Iron Fist with no real explanation other than low ratings. Which I found odd since Netflix said that Iron Fist season 1 was there most binged drama premier. How much of an audience lost did they take? According to the numbers Netflix released to Screen Rant after the cancelation Iron Fist lost 64% And Luke Cage lost 59%.

Sounds like a lot, right? Well first those are percentages so we don’t know how many people that actually is and let’s compare that to some other popular super hero shows currently on network TV

Agents of SHIELD Season 1 premier 12.12 million viewers season 2 premier 5.98 million a loss of 51%
Gotham                       Season 1 premier 8.20 million viewers season 2 premier 4.57 million a loss of 44%
The Flash                   Season 1 premier 4.83 million viewers season 2 premier 3.58 million a loss of 26%
Arrow                         Season 1 premier 4.14 million viewers season 2 premier 2.74 million a loss of 34%
The Flash                   Season 1 premier 4.83 million viewers season 2 premier 3.58 million a loss of 26%

The point is ALL TV shows lose viewers over time. Especially from their premier to their second season. And yes the percentages are bigger for Luke Cage and Iron Fist, but what does that mean for Netflix?

Shows are canceled on regular TV due to poor ratings because networks don’t make as much money off of shows with poor ratings. See your standard TV network makes their money from advertising (that think you skip over when you DVR your shows). See the rate which networks can charge for advertising is based on a long established concept called CPM That stands for Cost Per Thousand. So if a show loses 1/2 it’s audience a TV network loses a lot of money.

How much money can they lose? Let’s take Gothamas an example. So let’s sat Fox charges a CPM of 5 dollars, that means the advertiser pays a 5 dollars for every thousand people that tune into Gotham. So that means on the season 1 premiere fox earned roughly 600,000 per ad and with an hour long show you get roughly 30 ads at 30 seconds a piece, which equates to 18 million dollars earned per episode. Now if your audience drops to 1/2 that’s a loss of 9 million dollars per episode. So you can quickly see why viewer numbers are so important to Network TV. Makes sense right?

But Netflix is completely different, they have NO advertisers. They make all their money based solely on subscribers. Netflix charges subscribers an average of 11 dollars a month. It’s a guaranteed income, it doesn’t go down if people don’t watch a show on the platform. Netflix currently has 137 million subscribers at 11 dollars a piece that roughly translates to 1.5 billion dollars a month. And again they make that regardless if you watch Luke Cage or not, just as long as you stay subscribed.

So they only real justification is if they could somehow prove they have lost subscribers due to the loss in viewers on these shows. But according to their numbers they have gained 71.6 million subscribers since Daredevil premiered in april of 2015. They more than doubled their subscribers in that time period.

Which also begs the question are the percentages they presented based on percentage of Netflix subscribers watching or based on number of viewers of the shows season over season? The Screen Rant article does not explain the numbers. And if it’s season over season are they comparing similar timeframes considering it’s an on demand viewing experience are you essentially punishing fans for waiting to watch the show and not jumping on it the month/week/day it was released?

The more I think about this the more frustrated I get! A company that normally doesn’t share their download numbers on shows cancels 2 Marvel shows and then releases percentage numbers to justify the cancelation? That feels like a face saving smokescreen on their part. Also a source told the Hollywood reporter that Luke Cage was cancelled due to “creative differences” not viewership. That Marvel/Disney and Netflix couldn’t agree on the terms for a third season of Luke Cage.

So what really happened? Why did Netflix pull the plug on these shows (and are rumoured to be pulling the plug on the other Marvel shows as well). Well in my opinion it’s simple. They felt threatened. Let’s not forget only one month before the cancelation Disney announced they were going to create original Marvel shows for their streaming app starting the actual actors from the movies. The buzz around this was tremendous, and is still.

My guess is Netflix wanted something from Disney they weren’t going to give them. Either holding off on the new shows/app, or an exclusivity clause of some kind or they didn’t want Disney to pull their content from the service.

Think about that, if your Netflix and you don’t want to lose content that has attracted a large number of subscribers you don’t want to lose that content right? And how do you do that? The only bargaining chip you have are the Marvel shows.  So when it comes time to negotiate a the deal for the new season you try to throw a clause in the contract to keep some content. Then you threaten to cancel the shows if Disney doesn’t play along. Disney calls you on this and thus you cancel the show thinking it give you a better power position.

Problem is Disney is entertainment. They own so much  at this point they probably didn’t care one way or the other about the properties. Netflix took a gamble as a power play and we the fans are the ones that get hurt.

I could be wrong, but I really feel that the low numbers thing makes no sense. All I can hope is the shows live on over at the Disney app. And mark my words if all the Marvel Netflix shows end up over there I will cancel my Netflix subscription in lieu of Disney, because I did sign up to Netflix just for the Marvel shows. We will keep out eyes on this one and see where it goes.

In the meantime don’t forget to check out our latest episode here: http://superherospeak.com/wp/282-battle-for-the-shield/