Hillary Atkin

FX’s John Landgraf on the Coming Streaming Wars: At What Point Does Television Become a Utility?

Sep 11, 2018

Long-established as an industry thought leader, FX CEO John Landgraf is getting ready for the big change when Disney takes over the cable network he’s called home for about 17 years.

Landgraf spoke last week at Variety’s Entertainment and Technology Summit in a one-on-one conversation with Cynthia Littleton that touched on topics including the value proposition of a brand, diversity in front of and behind the camera, ratings and his predictions for what’s ahead on the media landscape.

With a portfolio of acclaimed and often edgy and groundbreaking shows beginning with “Nip/Tuck” and “The Shield ” and fast-forwarding to “Atlanta,” “American Crime Story,” “American Horror Story” and “The Americans,” Landgraf can rest assured of his creative legacy at the basic cable network.

Despite some recent defections to Netflix — we’re talking about you, Ryan Murphy — he forged an environment where creators could be sure that their vision would be respected. Basically, he’s made FX the basic cable version of premium networks like HBO and Showtime and he’ll put up any of his shows proudly against theirs.

Yet Landgraf admitted that in the current distribution model where streaming is gaining greater traction, it’s a little unpopular to talk about brand. He pushed back against the idea that algorithms are better than humans.

“I believe society needs curation,” he said about the vast amount of programming available to consumers. “Sorting through the editorial possibilities plays a valuable role in a world large enough to contain diversity in age, race and sex, comedy and drama. There’s a danger in becoming so large that you become diffuse, and at that point it’s a utility and that’s not what we are trying to do. Just like with HBO shows, we provide some value for consumers who want reliably high-quality fare.”

Landgraf said he’s excited about the new ownership by Disney, expected to take further shape and form in early 2019, but admitted to experiencing some trepidation.

“There’s a logic behind it that’s irrefutable and necessary,” he said about the acquisition of 21st Century Fox, which was driven by the strategy of pumping more content directly to consumers via OTT subscriptions in order to compete with Netflix.

He talked about the key players in the streaming wars that will unfold. “You can see at least four large media companies that are going to be aggressively pursuing a large streaming platform — Netflix, Amazon, Disney in its future iteration, and AT&T-Time Warner,” Landgraf said. “I don’t think those are the last combinations, and I don’t think those are the last entrants. I’m not saying that YouTube isn’t making original series or that Facebook isn’t hedging around the edge of it. And you have to add Apple. But in terms of somebody saying, ‘Okay, we’re going to commit whatever it takes — $5 billion, $10 billion — there are four companies.”

As for the future of some of those streaming services that have yet to come down the pike, specifically Disney’s and potentially one spearheaded by Comcast, Landgraf said he doubts that 50 million homes will want to buy a single service — that it has to be bundled and include adult and family fare. “FX has to support it but we don’t know how it’s going to work yet,” he said about the upcoming Disney platform that will incorporate FX programs.

“The average family will have four or five services so there will not be enough for everyone [service providers] to eat. I believe there will be dominant winners. There will be overspending for years but at the top of the curve these companies will have to right-size their costs,” he said.

The longtime executive admitted a well-publicized mistake.

“I called the end of Peak TV — and I was wrong. You’ll see peak spending but at the end the ones that remain will have to be profitable. It has to be driven by earnings per share.”

Backed up by both critical and popular acclaim in terms of awards and ratings, Landgraf didn’t miss another opportunity to tout the quality and creativity of FX programs like the new “Mayans M.C.,” the “Sons of Anarchy” spinoff that debuted last week to what could be the highest cable series ratings this year.

“Every year shows have to get better. There’s more money on the screen and more innovation and experimentation. It’s increasingly hard to find a distinctive cop show and a spy show. We look to find creative people to do something new,” he said. “It was easier when it was just HBO and Showtime and before that AMC. We’ve tried to make things that are not just what everyone else is doing.”

He spoke about the drawbacks of linear television — like not being able to run 1,500 episodes. Audiences can get them on a service like FX+, for which Landgraf said they’re staying to watch not only the shows they came for but all of FX’s programs.

“In an instant the brand leaps up to HBO and in fact, we have been matching them for years. We can’t break out in the current ad-supported model, but when it’s noncommercial, we are equal to HBO.”

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