Hmmm, so they outbid Showtime for the rights, which cost them $3M per episode. This implies that this was a $3M vig on top of which Netflix then had to lay out

Hmmm, so they outbid Showtime for the rights, which cost them $3M per episode. This implies that this was a $3M vig on top of which Netflix then had to lay out production costs. So the costs per epi would be pretty high. But...back in 2006 there was no Netflix to bid against Showtime. I've never been able to discover what Showtime was offering other than that Hurwitz seemed a bit insulted by the offer ("half the money for twice the work" is the quote that stands out in my mind, but I can't find a citation). If there'd been other competition for the show from a Kickstarterish platform perhaps the Showtime offer would have been more reasonable. Maybe. Who the hell knows. :)