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FX Chief Says Industry Hasn’t Reached 'Peak TV' Yet, Blasts Netflix’s 'Wonky' Economics

'Content creation is in an economic bubble'

"There’s still going to be a lot of TV for the foreseeable future," said FX Networks chief John Landgraf. Getty Images

Five months after he coined the term "peak TV" to describe the overwhelming amount of video content available to audiences, FX Networks CEO John Landgraf said we're not yet at the peak, but will be soon. Landgraf also renewed his calls for Netflix to release data so it can be on a level playing field with the other TV networks.

FX released data last month which indicated that a record 209 scripted series aired in 2015. Landgraf said the number actually increased to 412, after a Pivot show and two other Netflix series were factored in, and that doesn't count 750 or so unscripted shows. "Counting television series is like counting lemmings," Landgraf said. "Hopefully they won't all run off a cliff and plunge to their deaths in the ocean," he said.

And the 2016 tally will climb, Landgraf says, before 'peak TV' is reached. "I think there's a reasonable prospect there will be fewer in '17 than there are in '16. We'll get to 450 shows, and then there will be a contraction down to 350 or something like that," Landgraf expects. "There's still going to be a lot of TV for the foreseeable future."

The rapid increase in scripted television—almost double the number from 2009—brings more quality TV show to audiences, but "from a business standpoint and increasingly from a consumer standpoint, it's harder to launch shows. I think it's harder for consumers to see good shows," Landgraf said. "There's too much of everything in many ways. There's not enough human attention to go around."

With the onslaught of TV content and the shift to delayed viewing, "the U.S. television ecosystem is in a period of dynamic and rapid change," said Landgraf. And FX is feeling the effects of that shift: FX's average prime time audience was down 13 percent in 2015, though upstart FXX was up 28 percent, and now ranks 28th among ad-supported cable networks. FX Networks is seeing "double to triple digit" growth on its FX Now streaming platform for authenticated cable and satellite subscribers.

"I think content creation is in an economic bubble," said Landgraf, of all of the new outlets—especially streaming services like Netflix and Amazon—creating content in recent years. "There's something a little wonky, and if you really dug under the economics of every business making scripted television shows and every show itself, they wouldn't all be profitable. There are more shows being made than can be sustained economically."

While Netflix's stock is soaring, that company "doesn't make any significant profit," said Landgraf, who noted that the company has gone from producing zero shows three years ago to 100 shows: 55 for adults and 45 for children. "Something has got to give eventually in that regard."

Until then, Landgraf used a "Moneyball" analogy when comparing FX to Netflix. "Basically, we're competing against payrolls, if you will, a la the Oakland As and New York Yankees, that are three or four times ours," he said. While FX doesn't break out earnings, globally they are "many, many times higher" than Netflix's, Landgraf said.

Yet FX lost out on the bidding for Netflix's Aziz Asari comedy Master of None and upcoming Netflix drama The Crown after the streaming service "overwhelmed us with shock and awe levels of money and commitment."

Landgraf reiterated his earlier calls for the infamous-secretive Netflix to make its ratings available to the industry and public. "I think it's ridiculous that we don't have usage numbers on Netflix," he said. Television data "feels more like sports scores, stuff that should be public and where everybody should be on the same playing field. And I'm sure it will be, at some point."

And while NBC did release Symphony ratings data about Netflix earlier this week, those numbers "are more directional than anything else," said Landgraf, who said Symphony's methodology  "doesn't feel rigorous enough…it's kind of a random demography."

While Netflix is making a splash with programming, FX is about to deploy a big gun of its own: its star-studded miniseries The People v. O.J. Simpson: American Crime Story, "a story which is even more relevant today than it was two decades ago" said Landgraf.

That 10-episode anthology series reflects Landgraf's belief that there are multiple models of TV programming that can be successful now. While many shows still make 22 episodes a year, "I'm starting to feel like the process of making television can be much more fluid and can continue to evolve in the sense that it follows the voice, the timing, the needs, the schedule of the creative people, rather than them having to mold themselves into a predetermined business structure, in which they have to be creative on demand," said Landgraf, explaining FX's unconventional schedules for Fargo (which won't be back for Season 3 until 2017) and Louie (which won't return until creator and star Louis C.K. decides he's ready for another season). "I'd rather make better shows on a different, more discursive timeframe," Landgraf said.

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