TV Eyes Hitmakers Nervously After Netflix Lands Ryan Murphy

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Ryan Murphy on stage at the 29th Annual Producers Guild Awards in Beverly Hills on Jan. 20.
Ryan Murphy on stage at the 29th Annual Producers Guild Awards in Beverly Hills on Jan. 20. Credit: Photo by Frazer Harrison/Getty Images

Another showrunner who has a been a staple for traditional TV is decamping for Netflix. Ryan Murphy, whose series like "American Horror Story" and "American Crime Story: The People v. O.J. Simpson" have been both critical and pop-culture hits for Fox Networks Group, has signed a five-year deal with Netflix that once again leaves a network group searching for its next hit-maker.

Shonda Rhimes, who is responsible for key ABC hits such as "Grey's Anatomy" and "Scandal," announced in August that she was taking her Shondaland banner to Netflix, ending her 15-year relationship with the alphabet network.

Following Rhimes' move, Murphy's departure should put other traditional TV networks on alert. As Netflix looks to spend as much as $8 billion on content this year, it could very easily go after other networks' key showrunners. The CW is currently airing six series from Greg Berlanti with several more in development; Chuck Lorre is a staple for CBS comedy; and Dick Wolf's "Chicago" franchise along with "Law & Order: SVU" make up a big chunk of NBC's drama slate.

In the near term, Ryan's exit is a blow to both Fox and Walt Disney, which has a deal in place to acquire much of Fox's assets. Murphy, whose agreement with Netflix begins on July 1, was expected to bring some much-needed cachet to the Mouse House's typical family-friendly fare.

He's certainly been reliable for Fox, with five shows currently airing across the company, including "American Crime Story," "American Horror Story," "Feud" and the upcoming "Pose" on FX, plus "9-1-1" on Fox. He's also known for the earlier medical drama "Nip/Tuck" and musical dramedy "Glee."

Murphy is responsible for some of the highest-rated original scripted series on Fox and FX. His new first-responder procedural "9-1-1," which debuted in January, is currently Fox's most-watched scripted show, averaging 6.3 million viewers per episode, and the third highest-rated series on the network. With an average live-same-day draw of a 1.7 rating—or 2.2 million adults 18 to 49 – "9-1-1" trails only "Empire" and "The Simpsons" in Fox's core audience demographic. The show was renewed for a second season on Jan. 16, just two episodes in to its freshman season.

Sports and reruns to the rescue?

But Murphy's productions don't necessarily have an outsized impact on either network's bottom line. The contribution of "9-1-1" to Fox's overall gross ratings points is negligible.

That's partly because, for better or worse, original scripted shows don't exactly move the needle at Fox and FX.

NFL games and programming surrounding live sports accounted for 46 percent of Fox's overall GRPs in 2017, according to analysis from MoffettNathanson. And solely looking at the fourth quarter, the NFL and Major League Baseball contributed anywhere from 80 percent to 90 percent of the network's ratings points, which explains why Fox is looking to pivot to sports and news if the Disney deal goes through.

"9-1-1" is also not an especially robust driver of ad sales revenue. The show cost advertisers about $105,000 for a 30-second spot, on average. This compares to the over $300,000 advertisers paid on average for a 30-second spot in "Empire" during the upfronts, according to Ad Age's analysis.

On the cable side, Murphy is the star attraction. The current incarnations of "American Horror Story" and "American Crime Story" are FX's most-watched, highest-rated shows. "American Horror Story" averaged 2.2 million viewers and pulled a 1.1 rating in the demo and "American Crime Story" is currently being watched by 1.5 million viewers and garnering a 0.5 rating. Murphy's newest series, "Feud," is FX's third most-watched show, with 1.4 million people tuning in.

Still, as tends to be the case in cable TV, movies and off-network acquisitions make up the lion's share of GRPs. In 2017, movies accounted for a staggering 77 percent of FX's total GRPs, while reruns of "Mike & Molly" and "Two and a Half Men" contributed another 10 percent. Thus, nearly 90 perent of FX's overall deliveries come courtesy of theatricals and off-net comedies, while Murphy's various shows account for around four percent of the network's GRPs.

Nonetheless, Murphy's move is yet another blow for traditional TV, which is finding it increasingly difficult to retain showrunners being wooed by the freedom and flexibility that platforms like Netflix provide.

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