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Originally Posted by getbak
It sounds like Netflix is increasingly using its algorithm to make programming choices and the algorithm shows that anything beyond a third season for a show doesn't drive new subscriptions and it doesn't do much to keep old subscribers around either. That means, for their business model, renewing a series for a 4th season or longer is a money-loser.
For traditional, ad-driven tv, it still makes sense to continue to renew series because they bring in viewers with predictable numbers that can be sold to advertisers with more certainty (less risk of needing to give away free advertising if a show misses its targets). There's also more money to be made selling more episodes on the secondary market.
Ironically, buying an existing series with more episodes is more valuable to Netflix than producing more episodes of its own series.
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That’s really interesting to hear. I guess though after awhile you as a viewer will stop investing in shows for the long haul if you know they won’t invest after a third season. And if this is the case why don’t they just design most series they initially invest in, to wrap up after season three? I’m sure they’re figuring it all out but it’s nonetheless a really interesting take.