Netflix, Amazon investing billions in content

Shonda Rhimes of 'Grey's Anatomy' and 'Scandal' lured from ABC


Patrick Dempsey and Ellen Pompeo are shown in a scene from, “Grey’s Anatomy.”
ABC Patrick Dempsey and Ellen Pompeo are shown in a scene from, “Grey’s Anatomy.”

Shonda Rhimes, the creator behind television hits such as “Grey’s Anatomy” and “Scandal,” soon will develop new shows for streaming giant Netflix, and the platform’s 100 million worldwide subscribers, the company announced Sunday.

Rhimes and her production company, Shondaland, were hired away from ABC under a multi-year deal, marking the latest aggressive play by streaming services to go head to head with Hollywood and the traditional powers of the entertainment industry.

The signing of the award-winning writer and producer was a massive win for Netflix, analysts said, and highlights the mounting competition among studios for top-tier talent.

Streaming players such as Netflix and Amazon are investing billions of dollars to challenge the cable television model, vying to offer consumers entire libraries of original content, which are tailored to specific audiences and available on a range of devices, at the push of a button.

Just days ago the battle for premium programming intensified. Last week Netflix said it was buying the comic book company Millarworld, the publisher behind “Kingsman” and “Kick-Ass,” in a deal that gives Netflix the tools to make its own interconnected universe of superheroes films and television shows — and a chance to emulate Disney and Marvel’s wildly successful run.

That same week Netflix also announced a new six episode series starring former “Late Show” host David Letterman. And Amazon, for its part, said on Friday that it had inked an exclusive deal with Robert Kirkman, the creator of AMC’s “The Walking Dead,” who will create new shows for its streaming service. Neither Netflix nor Amazon disclosed how much the deals were worth.

Amazon CEO Jeffrey P. Bezos also owns the Washington Post.

For streaming companies and TV networks, the arms race for top programming likely will result in escalating costs, said Michael Pachter, a research analyst at Wedbush Securities, a Los Angeles-based investment bank. Rhimes’s existing ABC programs will continue to run on the network. While specific shows have not been named in her deal with Netflix, Rhimes is slated to develop both original series and special projects. The cost of the deal was not disclosed.



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