Why Networks and Production Companies are Merging

We have all watched Netflix evolve from the speedy DVD delivery service to the online streaming, binge watching giant. Was it an easy road for them? Absolutely not. There was outrage in 2011 when Netflix started focusing more on streaming. Despite major setbacks, it appears that Netflix has found its way out of the woods and on the road to streaming success.

There was once a time when Netflix shied away from syndicating the big shows. After all, at one time Netflix was just a start up that didn’t have the big bucks necessary to pay the hefty syndication fees for top-grossing shows. These days, Netflix is capable of doing more and more. Last July, the internet was abuzz over the syndication rights to the hit sitcom, Seinfeld. Businessweek reported that the Seinfeld’s syndication deals were up in September of 2014. The show’s creator and star, Jerry Seinfeld, spurred even more online discussion when he took to Reddit and hinted that the show may finally wind up on Netflix.

What really got people talking was when Netflix syndicated all ten seasons of Friends at the beginning of this year. The fact that Netflix is capable of syndicating shows like Seinfeld and Friends demonstrates that the online streaming giant is outperforming traditional networks.

Ryan Bushey, of Business Insider, analyzed Netflix’s niche and how they are finding ways to capitalize on that opportunity. Netflix was typecast from the beginning to host shows that required commitment from the viewer. Shows with a continuous storyline that didn’t succeed as reruns after initial airing on normal TV channels thrived on Netflix. Queue the development of binge-watching. People who watch Netflix overdose on shows when they sit down to watch TV. Netflix has always provided the shows that lend themselves best to binge-watching, but just as it is for any network, syndicating those shows is pricey and temperamental.

In response to this problem, Netflix has expanded their operations from simply being a business to being a production company. The shows they have produced like House of Cards and Orange is the New Black  have been wildly successful, earning many Emmy Nominations. Better yet, they have provided an outlet for Netflix to continue increasing their content with predictable requirements.

It is no secret that the networks that own their own programs make more money than those that don’t. Netflix’s transition has proved to be wildly successful. House of Cards is now considered to be one of the top TV shows in the world. But this doesn’t mean traditional TV is going the way of the Dodo. Faced with decreased viewership, traditional TV networks are finding innovative ways to remain competitive with online streaming companies like Netflix.

Traditional TV networks and production companies are beginning to join forces in the hopes of creating more “original” content. Capital New York reported that recently, 21st Century Fox merged with Fox entertainment. The move makes sense, as tying a production company to a single network means that more programs will now be aired exclusively on the network affiliated with the production company. It is certain that this kind of consolidation will make these exclusive shows more successful. Consolidation isn’t just beneficial for networks. Production companies that choose to produce more exclusive content for a specific network will be able to produce more content and see their shows survive longer on the air.

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