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Netflix just stole television’s biggest creator from Disney in midst of separation

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This is a much needed move for Netflix

Kerry Washington posing in Scandal. ABC

Late last night, Netflix announced it had signed a new exclusive deal with Shonda Rhimes, the most important showrunner working in television today.

This isn’t just a big win for Netflix, which the company needed, but a devastating loss for ABC. Rhimes has created some of ABC’s biggest shows, including Grey’s Anatomy, Scandal, How to Get Away with Murder and Private Practice. Her name has become synonymous with Emmy nominations; an aspect of her tenure at ABC the network has come to cherish.

Rhimes said the new deal was the result of a “shared plan [Netflix content chief] Ted Sarandos and I built based on my vision for myself as a storyteller and for the evolution of my company,” according to a statement from Netflix. The statement also said that Rhimes was interested in producing more television series that she couldn’t do on ABC because of network restrictions.

This is more than just a business move for Netflix; it’s a statement. Netflix is making itself the go-to platform for creators who want to do more. Rhimes, Spike Lee, Jenji Kohan and other showrunners have all saddled up with Netflix. Why wouldn’t they? The network is notorious for not allowing its talent to worry about trivialities like ratings or audience numbers, orders every series straight to season and is ready to budget millions of dollars per episode to create prestigious series like Sense8 or House of Cards.

This isn’t the only statement Netflix is making, though. In the midst of a split from Disney — a deal Netflix paid hundreds of millions of dollars to enter into five years ago — Netflix needs to look strong. It needs to remind subscribers why Netflix is the go-to streaming service. In the past few months, Netflix has become synonymous with troubling times. Reports of the company being $20 billion in debt appear alongside stories regarding Fox pulling its series from the streaming service and massive complaints that Netflix’s new rating system has made the user experience much worse. Disney announcing that it would pull all of its movies from Netflix by the end of 2019 was just the cherry on a depressing, unfortunate cake.

Netflix needed a win. Even with the absurd amount of original series Netflix offers, Netflix needed something eye-catching. Partnering with Rhimes, one of the few television creators who is almost guaranteed to create popular, talked-about series every single time, is that win.

It’s not just that Netflix partnered with a top-tier creator, but the company has stolen Rhimes away from ABC; a network owned by Disney. Netflix can distract its subscribers by promising more television series — which will include A-list actors — even while popular movies are removed from the service.

Netflix’s decision to buy into Rhimes’ vision — along with the talents of other creators like Chuck Lorre and Jerry Seinfeld — also says something else about the company’s future: it will continue to be TV first. Netflix has received flack from its users in the past few months for its decision to cancel some of its original series, including the beloved, but trés expensive Sense8. At CodeCon, Netflix CEO Reed Hastings admitted the company needed to take more risks with its original series and cut its losses instead of trying to hold onto everything. Not even a company as viable as Netflix could continue to add content without worrying about its financial future.

It’s a sentiment that Sarandos echoed just a few weeks later.

“Relative to what you spent, are people watching it? That is pretty traditional,” Sarandos said, as reported by Variety. “When I say that, a big expensive 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.”

This is where Netflix’s new deal with Rhimes gets even bigger. Compared to other dramas, Rhimes’ shows don’t cost as much to make. Rhimes creates series about the drama of human relationships and those tend to cost less than a CGI-intensive, special effects heavy sci-fi series. For example, Orange is the New Black and House of Cards reportedly cost $4-4.5 million an episode whereas Sense8 and Game of Thrones reportedly cost $8-9 million an episode. Rhimes has said in the past that her own shows take anywhere from $3-6 million to make, depending on what’s needed. While that’s a little more in some cases than Orange is the New Black and House of Cards, it’s still far less than Sense8.

Rhimes can continue to create the series she wants, without having to worry about the logistical restraints that come with being on a network and pushing the envelope even further. Netflix can boast having Rhimes on its schedule and make itself look even better to an audience it may not have broached beforehand. Both can work together on the shows they want to create without having to worry about crossing a line or spending a fortune to make it happen.

Netflix partnering with Rhimes was more than a good idea; it was a display of survival. While Netflix is in talks with Disney to retain some of the studio’s films, including Marvel and Lucasfilm titles, snatching one of ABC’s biggest talents is a win all on its own.