Netflix Originals: Why ‘Hemlock Grove’ May Be the First to Get Canceled

Netflix Originals are the key to the company's growth strategy. Credit: Netflix.

For Netflix (NASDAQ: NFLX  ) , nothing is quite so important as funding original series that customers can't get elsewhere. Chief Financial Officer David Wells said as much in May, at the J.P. Morgan Global Technology, Media & Telecom Conference.

"Our intent is to continue to expand the content library," Wells told the investors in attendance. "If we're going to meaningfully address the 60 million to 90 million [potential U.S. subscribers], we'll need to do that by adding more originals, we need to do that by adding more breadth of content. And part of that is making our content more exclusive, so moving it from nonexclusive to exclusive, and offering more curated offerings" (Source: S&P Capital IQ).

On balance, Netflix originals have done quite well. "House of Cards" is an Emmy winner. "Orange Is the New Black" has a large and growing following. Can the good times continue? After looking at the data for "Hemlock Grove," I'm not so sure.

The horror of 'Hemlock Grove'
On Netflix, more than 1.5 million people had rated the show as of this writing, giving it a combined 3.9 out of 5 stars. By comparison, 3.9 million have weighed in on "House of Cards" (4.8 stars) while 5.8 million have rated "Orange Is the New Black" (4.4 stars). Among Netflix originals, "Hemlock Grove" is a weak performer.

The picture worsens when you look beyond internal Netflix scores and consider social data.

Below, I've compared Netflix's horror show to one of its peers, "Orange Is the New Black," and another edgy, pay-TV drama, "Ray Donovan." The show does well in all but one very important category:

Show
Strength
Sentiment
Passion
Reach

Hemlock Grove

6%

4:1 positive

29%

25%

Orange Is the New Black

42%

3:1 positive

13%

48%

Ray Donovan

10%

4:1 positive

31%

30%

Source: socialmention.com.

Rating just 6% in "strength" -- a measure of the likelihood of the show being discussed on social media -- the performance of "Hemlock Grove" is negligible when compared to "Orange Is the New Black." That's a bad sign for Netflix, which is depending on its originals to produce buzz and bring in subscribers.

How big a problem would it be if 'Hemlock Grove' failed?
As of this writing, we still don't know if Netflix will bring "Hemlock Grove" back for season 3. I will not be surprised if the company decides to pull the plug.

What would it take to reach that point? In a June interview with The Hollywood Reporter, Cindy Holland, Netflix's executive in charge of original content, admitted that the streaming sensation faces many of the same challenges networks face when it comes to keeping a series on the air, even if the business models are different.

"If the creative team decides they don't want to go on, that's one factor [in cancelling a series]. And if the investment required outweighs the subscribers and the viewing hours we predict for the series, that would be another," Holland said at the time.

Foolish takeaway
Notice how she describes the process. Like network TV, it's data-driven. If a show has either the buzz to draw in new subscribers or the adjacent appeal to keep existing subscribes engaged, it'll stay funded. If it doesn't, then it won't. "Hemlock Grove" appears to be on the bubble, and what happens next is important.

So, set aside whatever ill will you might harbor toward werewolves and outrageous horror. The story of whether "Hemlock Grove" gets a third season will tell us a lot about the business drivers for Netflix's original series. Be sure to tune in.


Read/Post Comments (11) | Recommend This Article (2)

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  • Report this Comment On August 07, 2014, at 4:11 PM, PrincessUpir wrote:

    I really hope Netflix renews Hemlock Grove! I know there are a lot of other fans out there. I understand why the ratings are being compared to 'Orange Is The New Black' and 'Ray Donovan' but what they should also consider is how different the subject matter is. Hemlock Grove is a gothic fantasy, the other two are more real to life. I've recently been on a few websites trying to find out if there will be a third season. If you look at tv.com, a lot of people want it back.

  • Report this Comment On August 08, 2014, at 12:38 AM, highlandchild wrote:

    I think the show is great. I don't think Netflix is doing enough to grab the attention of fans. Both House of Cards and Orange is the New Black had press tours, nothing like that for this. Plus, with the new Marvel shows, its not looking to good. Maybe they'll do 5 episodes to tie up loose ends.

  • Report this Comment On August 08, 2014, at 12:46 AM, OrderOfTheDragon wrote:

    This show is AMAZING! Very edgy!! We love it in my home. The mythology is rich, the special effects, the actors are all unique. I think it might be to complex and gritty for many people. And I only found out about it from a Game Informer Magazine. I was blown away, that such an amazing show was on Netflix the entire time, and I was sucked into its complexity once I finished the first 3 episodes. It's brilliant. Market it more around Halloween and watch the number shift!

  • Report this Comment On August 08, 2014, at 12:49 PM, Roxy4 wrote:

    Please please please I hope this show gets renewed. *starts prayer circle*

  • Report this Comment On August 09, 2014, at 10:50 AM, Geeon wrote:

    Wife and I both enjoyed this series. The characters kept us guessing. Famke Janssen is amazing. I hope netflix sees all they positive comments and keeps this series on going.

    Far better than orange is the new black or ray donovan

  • Report this Comment On August 11, 2014, at 1:45 PM, lorelaim wrote:

    Gotta get #HemlockGroveSeason3 trending everywhere to fix this. I've done my part. :D

  • Report this Comment On August 11, 2014, at 10:07 PM, squashsquatch wrote:

    Netflix has options that network TV does not. They can make a final

    season that is 3 episodes. Or 1 episode. Or an exciting 90 min final

    movie that answers all our questions. They can tie up the loose

    ends and finish the story. This will mollify the show's fans.

    And they'll have a complete story arc in their

    video library rather than an aborted 23 episode series that leaves their

    customers hanging.

    In fact, Netflix should let it be know that this will be their policy

    for all series that they produce. Finish the dang story. Don't leave

    the viewers that have stuck with a series for all those hours hanging.

    It would be great way to differentiate Netflix from network TV.

  • Report this Comment On August 11, 2014, at 10:50 PM, Netman0116 wrote:

    Hemlock Grove was surprisingly good. I say this

    because I'm not really a horror fan.

    I became hooked on the show after watching the first episode.

    I really hope that Netflix decides to bring it back for a 3rd season and not just a couple of episodes.

    Also, I was a big fan of Orange is New Black, but after watching Hemlock Grove, I completely lost interest.

  • Report this Comment On August 14, 2014, at 4:49 PM, Sweetmelody wrote:

    I hope they bring Hemlock grove back for another season or how others have stated at least wrap things up. I was concerned that season 2 was shorter than season one but in my opinion they don't advertise the show like some of the others.

  • Report this Comment On August 18, 2014, at 3:27 PM, Floydsgrandma wrote:

    This series was AMAZING! I loved every episode and the actors were all just perfect for their parts. Please Please Please Netflix, keep this great show going. I'm a huge fan.

  • Report this Comment On September 02, 2014, at 3:14 AM, lovetheshow83 wrote:

    Hamlock Grove is my favorite show, I have watched all of the episodes!!! I need an ending. The fans need a conclusion, we have been with the show from the beginning and love it! I would love a third season but at least some kind of conclusion is needed! Please don't leave us guessing :(

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