"Netflix will find shows in the still-fat middle of the long tail, and pick them up when they get canceled, and they'll probably go into new production, too."

"Netflix will find shows in the still-fat middle of the long tail, and pick them up when they get canceled, and they'll probably go into new production, too." In theory, yes. In praxis, the problem is that the production costs of picking up canceled shows don't make sense relative to the Netflix revenue model. TV productions are extraordinarily expensive. Talent deals are astronomical. Producers' fees, writers' salaries, even technicians' salaries, are dazzling. Union scales aren't cheap, either. The whole thing is very, very costly to produce. The reason a TV network can afford that cost is because a) it doesn't pay all the costs on its own, and b) it doesn't sell the content directly to its consumers. It sells massive amounts of advertising to a handful of deep-pocketed advertisers, and also makes money licensing the shows to cable networks and other distribution outlets. Netflix, in the original content production business, faces the problem of having disintermediated a costly supply chain, and then having condensed that supply chain into itself. It eliminates the production company, the TV studio, and the TV network, replacing them all with Netflix, but bearing all of those costs as if they went up a three-part value chain (because it inherits all the costs that were already in place when the show was being produced for TV). This is why I have to believe that Netflix will increasingly depend on for-Netflix originals, and not on picking up canceled TV shows. It may pick up a canceled show here or there, all of which will make great headlines and probably generate a lot of new users (or existing user loyalty). But these aquisitions will be loss leaders, serving primarily to grow the subscriber base at a considerable loss per show. They can't be the basis of a business model, in and of themselves. TLDR: Netflix will need to build a first-rate originals business, perhaps aquiring canceled shows along the way to season the steak. The bulk of its future originals will be from production companies pitching content directly to Netflix, and not from Netflix's licensing existing content from other sources. Cost models don't translate very well from medium to medium.