1/ On Netflix’s Marvel cancellations, there seems to be some nuance that’s missing which tells you a lot about the future of OTT video in 2019. I’m sure both sides wanted a renewal, but the *absolute* not just relative value for both sides continued to decline. And thus no more.

2/ Netflix reportedly holds the right to keep renewing these shows, irrespective of Disney's preferences. Disney may be entering Netflix's territory with Disney+, but that didn’t drive the cancellations. Netflix was making a rationale decision based on quality, cost, viewership

3/ To point, the shows will remain NETFLIX ORIGINALS for years, Disney would have to buy them back (and says they don’t fit with Disney+’s positioning and won't be rebought) and there’s likely a hold on re-using the IP in TV (i.e. Disney can’t just launch a new Luke Cage in 2019)

4/ The reality is these shows were unprecentedly expensive (Netflix reportedly paying 60% markup), but they weren’t very good, audiences have undoubtedly declined precipitously (you can see this in the marketing spend) and it’s hard to grow audience in late seasons (con't)

5/ With old, mediocre shows it's just about viewer retention each year To point, Disney never put much effort in their Netflix shows. Daredevil had 3 showrunners in 3 seasons, Luke Cage was 2 in 2, Jessica Jones 2 in 3, etc. (And the teased MCU integration never happened!!)

6/ It's telling that the signature achievements and performers of the MCU are the 'Avengers' films, but the 'Defenders' was one of the least buzzy, least viewed titles (in part because the preceding two series, the back half of Luke Cage and all of Iron Fist, were very poor)

7/ The Netflix-Marvel deal was set at a time (Nov 2013) when NFLX needed big, buzzy IP that stood out and didn't need to be managed internally. Willing to pay whatever it took for it And note, the deal was meant to be single seasons. Despite its end, Marvel/Netflix was a success

8/ In 2019, Netflix has a huge internal pipeline - fueled by mega-deal with Shonda Rhymes, Ryan Murphy etc - and there's no markup for their own stuff And Netflix's audience and brand are much larger. This means Netflix's needs grew as the contribution of the Marvel shows waned

9/ And with Marvel now focused on their own SVOD shows (e.g. the MCU Loki series for Disney+), it’s hard to imagine Disney’s best foot forward was going to go towards aged Netflix series

10/ Netflix reportedly wanted to shorten the seasons, thereby reducing total spend and improving retention and quality (Netflix’s shows, especially the Marvel ones, are famously bloated). Reportedly from 13 eps to 6-8.

11/ Which means Disney would have to effectively reduce their revenue from 2/3rds, while keeping valuable characters unavailable for all other live action applications, while focusing on their own D2C. And while Netflix could force a renewal, they couldn’t do so at new terms

12/ So Disney liked balked. The value wasn’t there for either party. It once was. And everyone is now tired of financing another party’s enterprise value growth – the economic incentives (cost minimization and upside maximization) drive vertical integration.

Fin/ In short, it just wasn’t working for anyone. Including most of the series’ original fans.