CBS Corp. CEO Leslie Moonves bragged more than once about the near-instant profitability of summer dramas “Under the Dome” and “Extant.”
Thanks to streaming deals hammered out for both shows in their infancy, “It’s almost like the rating on CBS is secondary,” Moonves said last year at the Fortune Brainstorm Tech Summit in Aspen. “The shows are successful before they even get to the air.”
The key word there is “almost.” CBS confirmed Friday that it had canceled “Extant” after two seasons of bad, then worse ratings. The move came six weeks after “Under the Dome” was terminated after three seasons. The two cancellations reveal the limitations of new business models being pursued by broadcasters as linear television viewing continues to decline.
“Dome” was a surprise breakout hit when it premiered in 2013, averaging a 2.67 live-plus-same-day Nielsen rating in the advertiser-coveted demographic. But the Stephen King-inspired sci-fi drama declined 39 percent in season 2, averaging a 1.63. This summer it drew a meager 0.97.
“Extant,” for its part, was never a ratings winner, averaging a 1.09 in season 1 and a 0.73 for season 2. But in addition to its Steven Spielberg pedigree — the filmmaker’s Amblin Television produced both shows — “Extant” boasted Halle Berry, one of the biggest movie stars to make the leap to television, at the top of its call sheet.
But ratings, as Moonves pointed out, didn’t tell the whole story. “Dome” went to series only after CBS struck a deal to stream episodes on Amazon four days after their initial broadcast — a remarkably short window that bucked the industry standard. That deal was replicated a year later for “Extant.”
CBS then followed a similar formula for deals with Netflix on “Zoo,” which premiered this summer and has been renewed, and “Braindead,” which will premiere in 2016.
Those deals essentially subsidize the cost of producing the shows. So the streaming services get a product that has already been marketed to a mass audience while it’s still fresh in people’s minds. CBS gets a show that costs a fraction of what it would otherwise.
But what does it say when two shows with as much upside as “Dome” and “Extant” are canceled?
“What it says is there’s a balance,” Bill Carroll, vice president and director of programming for Katz Media Group, told TheWrap. “The balance comes from not only the performance of the shows on broadcast but their afterlife. In the case of both shows, it seems like there was also some questions about what they could do creatively if the both went forward.”
“Dome” and “Extant” were conceived and marketed as so-called event series with short, 13-episode seasons. Neither was ever going to be an endlessly renewable resource, a la the network’s procedurals.
The big payoff for most TV series comes when they reach 88 episodes and their reruns go into syndication — a major reason why networks, which now produce most of their own shows through their studio divisions, will often renew a series for a fourth season that is struggling in its third.
But the same streaming deals that made “Dome” and “Extant” profitable from the get-go also removed an incentive to keep them on the air. Those shows were designed to make money up front, not have value later in life as syndication packages. CBS can walk away from them without leaving money on the table.
The migration of audiences from live telecasts to delayed and digital viewing has forced networks to rethink their business models. It’s no longer enough to rent a show from an outside studio, put it on the air, and sell commercials against it. Networks now rarely pick up series they don’t also produce, as ownership allows the company to exploit the product on other platforms. And digital is the fastest growing of those platforms.
Regardless of the shows’ fates, CBS hasn’t soured on the model that made “Dome” and “Extant” possible. Just hours after canceling “Extant,” the network announced it had given a straight-to-series order to “American Gothic,” another Spielberg-produced summer series.
CBS is in talks with Netflix, Amazon and other services for a streaming deal for the show.