The eternal content battle between Netflix (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN) is just getting started. The latest addition to Amazon Prime's content quiver is going to provide brand new detail on what the two services have in common -- and on their fundamental differences.
It's the end of the world as we know it
Amazon's latest Prime Video show comes from Britain, where the company is partnering with BBC Studios to produce a six-episode miniseries based on Neil Gaiman and Terry Pratchett's classic book about Armageddon, Good Omens. Raising the curtain in 2018, Amazon holds the global subscription video-on-demand, or SVOD, rights. The BBC will broadcast the series in the U.K. on a traditional weekly schedule, but only after Amazon Prime Video has published the whole series as a streaming package.
Little is known about the budget or star power involved in this production except that Gaiman, himself, is converting the book into six hour-long scripts and also will act as showrunner. For those unfamiliar with TV industry lingo, that gives him a large amount of creative control over the production while he also keeps a firm hand on day-to-day operations. Basically, Gaiman will have the power to hire or fire episode directors, and then tell them what to do. And yes, Pratchett not only agreed to have Good Omens filmed, but also helped out with the scriptwriting before he passed away. This will be done right.
Amazon and, in this case, the BBC handed creative control right back to the original author. This is very much in keeping with Netflix's content-production approach. House of Cards writer and creator Beau Willimon served as showrunner for the first four seasons of that pivotal series. 2016 hit Stranger Things also saw the original idea men, Matt Duffer and Ross Duffer, jointly taking on the classic showrunner role, with their fingers deep into writing, directing, and producing everything.
It's kind of how Netflix works -- hire the right creative geniuses and let them do their magic. It has worked well for the streaming-video veteran, and I expect that the same approach will be successful for Amazon, as well. That's only more true when the reins are handed to Neil Gaiman, who, in my humble opinion, can do no wrong in any creative endeavor.
Amazon, on the other hand, seems less committed to the showrunner idea. More often, Prime Video's hit shows are pitched by one creator (or creative team), then handed off to a completely different set of producers, writers, and directors, who deliver the final product. This approach has led to several award-winning hits and is a perfectly respectable option -- it's just demonstrably different from the showrunner philosophy.
Good Omens is a break from that tradition.
What can Good Omens tell us about licensing strategies?
If the Good Omens production is such a great fit with Netflix's methods, why didn't the series end up with that studio, instead?
The answer, as always, is to follow the money.
Amazon splurged for a tremendously favorable license package here. Global coverage is commonplace in streaming licenses these days, but this one went a few steps further. Normally, when a co-production is paired with seasons on an old-school TV station somewhere, streaming audiences in that particular market will have to wait for the end of the broadcast run before digging into the new material.
For example, that's how Netflix set up its contract with BBC America for Dirk Gently's Holistic Detective Agency. The series, based on Douglas Adam's hilarious books, ran through its first season on BBC America before becoming available to audiences worldwide. That show is still unavailable to Netflix subscribers in the U.S., and it's unclear whether that will change on the one-year anniversary of the original broadcast. Netflix weighed the cost of a more aggressive license against the benefits of doing so, and ended up cutting some corners.
Netflix probably sat at the same negotiating table with the BBC over Good Omens, angling for its usual lower-cost deal, while Amazon offered more money for a higher-quality contract. At the end of the day, the BBC chose Amazon's more lucrative offer, while Netflix took its budget proposal and went home.
In that light, Good Omens will become a litmus test for balancing generous distribution structures against high licensing costs. Most of the results will only be seen behind closed doors, of course. But it's something to think about the next time you see Amazon or Netflix announcing another great content deal.
The costs of every detail have been weighed against the benefits -- most likely in the heat of battle against other studios. Nobody is just throwing good money after bad ideas in the streaming-video industry.