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Is Canceling Shows Too Quickly a Mistake? One Industry Exec Thinks So

Jessica Lerner

Over the past several months, companies have been in a mad rush to cancel shows that had already been ordered or renewed and remove others from their respective streaming services in efforts to trim expenses from their bottom lines. Warner Bros. Discovery’s efforts are front of mind, but Netflix, AMC Networks, STARZ, and others have also been guilty of axing and offloading underperforming shows. However, cutting these shows may be a mistake in the long run, at least according to one streaming executive.

“When you look at a lot of the streamers and how they program now its ‘three seasons, eight episodes each season and we’re done,’” NBCUniversal TV’s chairman of entertainment at TV and streaming Susan Rovner said at the South by Southwest festival this week. “So they’re not building those libraries, and I think that’s a mistake. I think that’s going to catch up.”

When it comes to ordering new series and cutting poorly performing ones instead of investing in the shows in an effort to build libraries, Rovner believes that streamers may be sacrificing short-term financial benefits over long-term customers. After all, if every underperforming and costly show is canceled, then several years down the line, streamers may find themselves having very little content to offer subscribers.

Canceling shows that don’t find an audience is part of how television has worked for decades, so that’s not new, but unlike on broadcast and cable, streaming series have the opportunity to continue to drive engagement for years to come, if they are given an opportunity to build a following, even if it is smaller than the company would have originally liked. All too often, streamers would seemingly rather cancel a show that is not a hit immediately and move on to another show that can be an instant smash for the service.

“Everything right now is so driven by subscriptions and getting as many subscribers as possible and that’s why people are going after the shiny and new,” she said.

Though this is a trend for all streamers, Netflix has been noted for canceling shows very quickly, but the company’s co-CEO Ted Sarandos has said that the service has “never canceled a successful show.

While this might be true based on the data that the streaming giant uses, it can still have a negative impact on the subscriber base. The streamer has recently canceled popular, but apparently under-watched series “The Midnight Club,” “1899,” “Uncoupled” and “Warrior Nun,” which may be at least part of the reason that Netflix was the most-canceled service in late 2022, according to a recent survey.

Netflix’s cancelation procedures are difficult to argue with, especially given the sizeable chunk of domestic and international streaming that the platform’s titles represent. Five of the top 10 most viewed English-language TV series were on Netflix in 2022, with “Stranger Things” Season 4 and “Wednesday” attracting the most attention with more than one billion hours watched each.

“This business is really completely about engagement, profit, and revenue,” Netflix co-CEO Greg Peters said during the company’s fourth-quarter 2022 earnings call. “We’ve got to grow all of those things and all those things are tied to executing content. When the content’s working, the business is working. We grow engagement; we grow revenue; we grow profit.”

Rovner, though, hopes to get Peacock to a “place that’s not just about new subscriber growth, but it’s also about stopping churn and making sure we’re retaining people.”

Numerous studies on streaming have indicated that new, buzzy titles are what initially draw customers to streamers, but the libraries filled with familiar titles are what keeps them subscribed. However, it’s not that simple. Stopping subscriber churn and retaining customers doesn’t necessarily equate to increased revenue. And as unpopular as some of the cuts may be, the companies behind them are already seeing the benefits.

WBD has taken a lot of flak for its dramatic cost-cutting efforts at HBO Max — as well as at the company overall — but these measures have helped the company’s bottom line. In its most recent earnings call, WBD disclosed Q4 streaming losses of $217 million, a significant decrease from the segment’s $600 million loss reported in the prior quarter. The $217 million deficit for the period was also an improvement of $5.11 million over 2021’s total, prior to the merger of Discovery and WarnerMedia.

Disney and Peacock both disclosed fourth-quarter streaming losses of over $1 billion. As a result, things are not as bad for Warner Bros. Discovery as they probably would have been without the controversial actions. Of course, it’s important to note that Netflix and HBO Max are in a different boat than Peacock. Netflix has nearly 231 subscribers worldwide, and Warner Bros. Discovery has 96 million streaming subscribers globally across HBO Max and discovery+. Peacock has a mere 20 million aid subscribers, a total which is more than double where it was a year ago.

Moreover, Netflix and HBO Max already have established brands, while Peacock is still trying to figure out what kind of content it wants to offer. Therefore, it makes sense that Netflix and HBO Max can be more decisive in canceling underperforming shows because they know their brand and audience better than Peacock does, which is still finding its footing.

In the end, it’s a balancing act. Canceling so-called underperforming shows too early may make sense financially, but it could also drive away current and future subscribers who are looking for something else after they finish the show that they initially signed up for. Conversely, keeping an expensive and poorly-watched show on air just because a small, but passionate, group of viewers like it means that the company will likely lose even more money.

“We talk a lot about it, especially when you do a show that is heavy mythology that really needs a beginning, a middle and then hopefully needs to have that end,” Rovner said of Peacock. “You want to honor your viewers who have invested in that show and give them that end and, unfortunately, sometimes that means making the decision to order more episodes of a show even though financially it may not make as much sense. But you are gaining trust with your viewers and your audience and your consumer.”

  • Peacock

    Peacock is a subscription video streaming service from NBCUniversal that includes original shows, blockbuster movies, and classic television series. Peacock is home to “Yellowstone,” and “The Office,” as well as original hits like “Poker Face” and “Bel-Air.” You can also watch live sports including Sunday Night Football, Premier League, and exclusive MLB games. Peacock is also the exclusive home to many WWE events like WrestleMania. Premium Plus subscribers can stream their local NBC feed in all 210 markets.

    Peacock includes news, entertainment, sports, late-night, and reality from various NBCU properties including NBC, Bravo, and E!.

    Peacock also includes the entire library of Bravo shows and has exclusives like “Below Deck: Down Under.” They also include live and on-demand access to Hallmark channels.

    The company has acquired the rights to many classic shows like “Parks and Recreation,” and the entire Dick Wolf library including “Law & Order” and “Chicago Fire.”

    The service also features blockbusters and critically-acclaimed films from Universal Pictures, Focus Features, DreamWorks Animation, Illumination and content acquired from Hollywood’s biggest studios.

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    Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.

    Netflix offers four plans — on 2 device in HD with their “Standard with Ads” ($6.99) plan, on 1 device in SD with their “Basic” ($9.99) plan, on 2 devices in HD with their “Standard” ($15.49) plan, and 4 devices in up to 4K on their “Premium” ($19.99) plan.

    Netflix spends more money on content than any other streaming service meaning that you get more value for the monthly fee.

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    Max is a subscription video streaming service that gives access to the full HBO library, along with exclusive Max Originals. There are hubs for content from TLC, HGTV, Food Network, Discovery, TCM, Cartoon Network, Travel Channel, ID, and more. Watch hit series like “The Last of Us,” “House of the Dragon,” “Succession,” “Curb Your Enthusiasm,” and more. The service changed its name from “HBO Max” on May 23, 2023.

    Max has three tiers, an ad-supported plan for $9.99 an ad-free plan for $15.99, and the ultimate tier that includes 4K for $19.99.

    All Max subscribers will get the full libraries of shows like “Friends”, “The Big Bang Theory”, “South Park”, “Fresh Prince of Bel-Air”, “The West Wing”, and more.

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