Is Netflix Causing a Dangerous Glut of TV Show Content?

Image of a TV set with static on the screenMany critics believe we’re in a golden age of television production, with numerous high-quality shows being made by both traditional and new media firms. But companies like Netflix, Inc. (NASDAQ:NFLX) are so prolific that we’re quickly reaching a climate of oversupply.

From Bloomberg:

The TV industry will make a record number of shows in 2017, as streaming services Netflix, Amazon and Hulu propel a swell in production that’s creating an oversupply, veteran Fox executive John Landgraf said during his semiannual presentation for critics.

TV networks will make 500 original scripted shows in 2017, almost 20 percent more than the 419 produced in 2015, which was itself a record, according to Landgraf, chief executive officer of 21st Century Fox Inc.’s FX Networks. Netflix Inc. alone will make 71 shows — not counting the service’s growing number of kids series, documentaries, movies and foreign-language programming.

Once the industry reaches a saturation point, many shows will wind up suffering steep losses. That’s because consumers can only watch a finite amount of content in a given year.

Some claim that we’ve already reached that point, which Fox executive John Landgraf has labeled as “Peak TV.” When you consider Netflix’s plans to produce 71 shows in a single year, it’s not a stretch to think he’s right. Even Netflix itself recently capitulated on the issue:

Netflix didn’t respond to a request for comment on Landgraf’s remarks, but weighed in on claims of peak TV during its presentation for critics on July 27. After repeatedly rejecting the notion of peak TV in the past, Netflix Chief Content Officer Ted Sarandos conceded that there were too many bad shows being made. No one ever complained about too much of a good thing, Sarandos said.

If Peak TV hasn’t arrived yet, it probably will very soon. The fallout will include many companies losing a whole lot of money on unsuccessful shows, and probably a great deal of contraction and consolidation in the industry.

Netflix shares fell $0.41 (-0.44%) to $93.58 in Wednesday afternoon trading. NFLX has fallen 18% year-to-date, as the company struggles with waning subscriber growth and speculation on whether it’ll be able to find an acquirer.

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