When the epitaph for broadcast television is written, it won’t be streaming video that is credited as the killer; it’ll be the networks’ inability to adapt to an on-demand ecosystem and co-exist with (and even capitalize on) what streaming does well. The Manifest situation perfectly illustrates the limitations of the current thinking.
As most TV insiders know, there are three ways that television series make money: the initial run, off-network domestic sales (like syndication or, more likely these days, a streaming deal, or sometimes both), and international. And as even my mother knows, the audience for all television, and especially for scripted dramas, has been shifting from linear to on-demand streaming.
That’s been particularly problematic for broadcast networks and the studios that supply them because A) initial run ratings are cratering, displeasing advertisers; and B) the marketplace for off-network dramas—which, thanks to the audience shift, is now dominated by streamers—has dried up. Since a mini-boom a few years ago with shows like This Is Us, The Blacklist, and Scandal, Netflix and the others have been reluctant to buy A-level broadcast shows because they’re expensive, they have too many episodes (Netflix gets the most “efficiency,” its word for bang for its buck, out of between 30 and 50 episodes, not 100), and they don’t often help build a worldwide library that plays in 200 countries.
But Warner Bros. Television, which makes Manifest, was able to secure a small off-network sale to Netflix for the supernatural missing-plane drama this spring, ahead of its third season on NBC. At that point, Manifest was a middling performer for the broadcaster, good enough to score a Season 3 renewal only after WBTV’s Peter Roth and Susan Rovner lobbied hard for it, I’m told. (Warners, Netflix, and NBC all declined to comment.) Still, Netflix thought the serialized storyline, centered on a group of passengers who emerge after being presumed dead for more than five years, could become binge-worthy in its on-demand environment. Remember, while Netflix likes to position itself to the industry as a highbrow programmer, its bread-and-butter is increasingly the broad, middle-of-the-road, broadcast network-style dramas and sitcoms that actually generate clicks and high completion rates. As I’ve written, Netflix might say it wants to be HBO, but it really wants to be CBS—or, in this case, NBC.
So Netflix bought Seasons 1 and 2 of the show (29 episodes) and scheduled them for June, when NBC’s Season 2 exclusivity ended. (NBC’s shows go to Hulu the day after they air for a year.) Ironically, NBC was airing Season 3 at that point, and just as the first two seasons were becoming huge on Netflix, NBC decided to cancel the show. Failing to recognize that a library push by Netflix might increase interest, I’m told NBC didn’t really consider picking Manifest up, or, importantly, giving itself an option to do so if the Netflix run sparked viewership, as it has with such shows as Lifetime’s You, AMC’s Breaking Bad, PopTV’s Schitt’s Creek, and so on. And WBTV didn’t really push for renewal like it did for Season 3. So NBC canceled it in June, and Warner Bros. shopped it, but here’s where the new world order made things tricky. The Manifest “library” was locked at Netflix, and the Season 3 episodes were tied up for another year at NBC. So who would want to air Season 4 of a serialized show when the other seasons are elsewhere?
That put Netflix’s TV chief Bela Bajaria in the pole position. Having previously run acquisitions for Netflix (and spent years at NBC), Bajaria knew that NBC had created value around Manifest, even if the show wasn’t exactly Emmy-worthy. Despite their declines, broadcast networks still enjoy a big promotion platform, and anyone who watches Sunday Night Football or SNL probably saw a Manifest promo or 10 at some point. People may not have actually watched Manifest on NBC, but it was a show they had heard of, so when it appeared on Netflix, a place where they are increasingly looking for and watching these kinds of shows, it popped in a way that most of its original stuff does not.
People watched, and Manifest began rising on Nielsen’s list, where it peaked as the most-consumed show in the world. So just pick up more seasons, right? Easy! Not easy. Bajaria’s mandate at Netflix is worldwide, which Channing Dungey, who took over at WBTV when Roth retired, knew well because Dungey worked at Netflix. Warners had already sold the show to France, Germany, the U.K. and other territories via its lucrative output deals, so it needed to unwind (i.e.: pay off) each one individually to make a worldwide deal with Netflix. That, in turn, required Netflix to put a significant offer on the table.
Where was NBC in all this? It kept talks going with Rake and his WME agents. But rather than calling Bajaria and offering to make a joint deal to revive the show, I’m told Susan Rovner, who by then had left WBTV to become NBC’s entertainment chair—yes, TV executive jobs can seem like musical chairs—offered a 12-episode final season. But she also wanted a discount on NBC’s previous license fee, and she wanted to hold back some rights for Peacock, its streamer. That was a nonstarter, so Warner Bros. focused on Netflix, which upped its offer and guaranteed 20 episodes. Done. Netflix gets Seasons 1-3 to roll out in most global territories and two tranches of new episodes; the per-episode budget will increase from about $4 million to about $5 million, I’m told; the actors get raises because their options had expired; and now Rake can tell his story how he intended—and make a few more bucks in the process.
And NBC gets nothing. Well, you might be saying, these kinds of serialized shows don’t work on broadcast anymore anyway. That may be true, but unless NBC just wants to throw in the towel and go full Jerry Springer in primetime, it needs to figure out how to make the new ecosystem work for itself, too. NBC could have prioritized teaming with Netflix to fully exploit a show it helped make a hit (though an NBC source says that wasn’t really on the table). And NBC definitely could have asked for an extension of its option to pick up Season 4 until after Netflix had aired it for a few months. I’m betting the producers and actors would have agreed to it, and then NBC’s Rovner, rather than Netflix’s Bajaria, would have been in that pole position when the show became a Netflix-fueled hit. Or perhaps NBC should have recognized that streaming was a better fit for this kind of storytelling from the beginning and shifted the show to its own platform, Peacock, rather than allowing Netflix to capitalize.
It’s an open question whether Peacock can make anything a hit—or whether any streamer but Netflix can make an off-network show a hit—but NBC can certainly try harder with these broad-audience plays. I’m told Manifest did pretty well during that Hulu window after its first season, and I’m betting more people would have watched the show on Peacock than Girls5Eva or the Punky Brewster reboot. Traditional entertainment companies can use their broadcast networks for their promotional capabilities and their streamers for the viewing experience. If they don’t, Netflix will continue to win in these situations, and the death rattle for networks will continue to grow louder.