Netflix vs. Disney: Why the Companies Are Waging ‘Studio-on-Studio Violence’

Days after Disney announced its plan to pull film roster from Netflix, the streaming service signed ABC mainstay Shonda Rhimes to a multi-year deal

Shonda Rhimes is leaving ABC for Netflix, signaling a newfound focus for the streaming giant to sign proven content creators to overall deals.

The news came just days after ABC’s parent company, Disney, announced plans to pull its movies from Netflix and launch its own streaming service to rival Reed Hastings’ upstart engine.

While the timing may be purely coincidental, Netflix dealt a definite blow to Disney’s broadcast TV division by nabbing the creator of such ABC stalwarts as “Grey’s Anatomy,” “Scandal” and “How to Get Away With Murder.”

According to Kristen Warner, University of Alabama associate professor of journalism and creative media, Netflix’s deal for Rhimes is akin to “studio-on-studio violence” and marks a setback for ABC, which has in recent years been defined by the prolific producer and Rhimes’ brand of serialized, soapy dramas featuring diverse casts and targeting higher-income households.

“This is like a quiet, subtle revenge,” Warner said. “For Netflix to release in the middle of the night, ‘She’s coming over here with us,’ that seems a bit petty.”

Netflix declined to comment for this story; Disney has not responded to a request for comment.

Warner added, “Netflix certainly shook ABC for a minute, and it’s going to take them a bit to recalibrate and figure out the plan, to try to find a new way to figure out what the network is.”

Disney has been very much in the business of recalibrating its TV operations, not only at ABC but at ESPN, the company’s one-time cash cow that has drained subscribers in recent years with the growth of cord-cutting.

But the media conglomerate appears uniquely positioned to challenge Netflix on Hastings’ home streaming turf — which CEO Bob Iger announced he would do by launching separate services over the next two years for both ESPN and Disney entertainment. The latter will tap into its vast catalog, including its animated and family-fare classics.

The Shondaland move certainly wouldn’t be the first time that Netflix’s bold business model has ruffled feathers within the older-model brands.

FX boss John Landgraf has previously needled the streamer for its prodigious level of content creation and deep pockets.

So Netflix raised some eyebrows when it made an announcement of its new show — a Western from the Coen brothers — during Landgraf’s presentation at the Television Critics Association tour. FX’s Emmy-winning anthology series “Fargo,” after all, is based on the Coens’ Oscar-winning 1996 thriller.

The Rhimes deal also marks Netflix’s first overall deal with a content producer to create more than one project.

Although the company has previously worked with name-brand producers like Chuck Lorre, many of its buzziest shows have come from up-and-comers creating their first hits, including the Duffer brothers’ “Stranger Things” and “Making a Murderer” writers Laura Ricciardi and Moira Demos.

That said, Netflix pays extremely close attention to the programming that its subscribers watch — including, say, “Grey’s Anatomy” reruns. Gina Keating, author of “Netflixed: The Epic Battle for America’s Eyeballs,” told TheWrap that the company’s propensity for rebooting series with nostalgia play (e.g., “Fuller House”) proves that it values investing in proven commodities.

Indeed, landing Rhimes — who touted the creative freedom that Netflix offers as the reason for her move — could serve as a warning that other networks are potentially at risk of losing key showrunners to a platform that is known to give autonomy to content creators and doesn’t get caught up in week-to-week ratings numbers.

“They are probably going to try and poach more folks because they are thinking about their brand, but also thinking about ownership,” Warner said of Netflix. “If they could get Dick Wolf to move over from NBC to Netflix, they totally would.”