![]() ![]() There's no need to remind viewers that House of Cards is on the air every Thursday, because the entire season was presented all at once. TV-based channels may spend up to $40 million per season just to promote their weekly episodes, and it's a never-ending fight for attentive eyeballs where you can never take a break.īy contrast, Netflix lets word of mouth and random walks around its user interface do most of the marketing work. ![]() Maybe Amazon isn't out to kill Netflix at any cost after all.īut wait - there's this hidden discount, too Finally, Micelli said Netflix saves a ton of money by taking a new approach to marketing. But Amazon seems to be taking the opposite route, carving out a lower-end niche in sitcoms priced at $1 million per episode. The online giant could theoretically outspend Netflix in every way, given its $11 billion in cash reserves and $1.2 billion of annual free cash flows. The agent even put Netflix budgets into context with the original shows ( NASDAQ:AMZN) is doing. That lengthy exclusivity doesn't come cheap. After that, production partners can turn around and syndicate the shows to premium cable channels, standard broadcast networks, and other outlets. This structure typically gives Netflix four years of exclusive distribution rights, the world over. Smaller studios handle the other current titles. ![]() Netflix provides the budget Lionsgate pockets a profit and provides the show-making expertise. Lionsgate ( NYSE:LGF-A) develops and films Orange, for example. Netflix pays for the production but actually outsources the real work to companies that already know how to do it. Micelli also noted that a significant chunk of these costs would account for global licensing rights. That show is a huge selling point when Time Warner ( NYSE:TWX) peddles its premium HBO service and has collected eight Emmy Awards in just two seasons. HBO flagship Game of Thrones reportedly plays in the same budget ZIP code. Micelli reminded his audience - about 500 entertainment lawyers at a symposium hosted by UCLA - that the costs are much higher than your regular, run-of-the-mill hour of serialized TV drama. If this agent is anywhere near the real figures, Netflix is spending way more on these shows that analysts and pundits have been assuming so far. And all three of the shows he discussed broadly match the oft-guessed figures for House of Cards. House of Cards was supposed to be the big-ticket title at roughly $100 million for two seasons, but Micelli's figure is at least 20% higher. Isn't that a bit high, though? These figures are a bit higher than the rumors you've seen elsewhere. Whoa, doggie! Will production costs eat Netflix alive? That's why I think Micelli should have a better view of Netflix's production budgets than most of us mere mortals. Moreover, CAA knows plenty about the television industry, managing big names such as David Letterman and Ryan Seacrest when it isn't busy launching the Oprah Winfrey Network or hit shows such as House and American Idol. CAA is one of the "big four" talent agencies, and even though Netflix seems to have chosen actors from other agencies in most cases, you can safely assume that CAA sat at every show's negotiating table.Īgents certainly have a clue what the going rate for acting services is, and you can't consider a 13-episode role without knowing something about the production values surrounding the cast as well. These are not hard numbers straight from the source, but Micelli's estimates presumably based on discussions with Netflix and other stakeholders. The numbers, please Here's the cost per show, according to Creative Artists Agency agent Peter Micelli, by way of a report in Variety : And the company isn't skimping on budgets: The "cheapest" show on deck would be prison dramedy Orange Is the New Black, which costs about $3.8 million per episode. ![]() But third parties are spilling the beans.Ī self-described "super agent" at a major Hollywood talent agency just provided detailed estimates on what Netflix pays per episode of this year's new in-house shows. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.įollow Anders on Twitter, LinkedIn, and Google+.įollow ( NASDAQ:NFLX) is notoriously tight-lipped when it comes to the costs of producing fresh content for its own exclusive use. Believes in coyotes and time as an abstract. Contains six flavors not found in nature. He has been an official Fool since 2006 but a jester all his life. Where the two markets intersect, you'll find his wheelhouse. Anders Bylund is a Foolish Technology and Entertainment Specialist. ![]()
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