MIPTV: Why the 'Black Mirror' Deal Marks a Turning Point for Netflix

For the first time, Netflix outbid a network on a show it originally commissioned and wanted to keep on air.

Online streaming companies have resuscitated series that were on the verge of being dropped, as Amazon did with Ripper Street. And they've resurrected much loved shows that had laid dormant for some time, as Netflix did with Arrested Development, Fuller House and the upcoming revival of Gilmore Girls.

But up until just a few weeks ago, no online streaming company, no matter how powerful, had dared to snatch a show away from a commissioning broadcaster that was looking to retain it for another season.

Enter Black Mirror, the darkly satirical British anthology series created by Charlie Brooker, and that big Netflix deal.

Brooker had developed Black Mirror, a Twilight Zone-style show in which each episode offers a different dystopian vision of a future Britain, for U.K. public service network Channel 4, which aired the first two three-part seasons in 2011 and 2013. Both received critical and ratings acclaim, with 1.9 million watching the premiere episode of season one. A 90-minute stand-alone Christmas special, which Channel 4 commissioned from Brooker, starred Mad Men's Jon Hamm and drew 2 million viewers when it aired on Dec.16, 2014.

But Netflix had already trained its sights on Black Mirror. The SVOD giant had picked up the series for its U.S. service and began streaming it in late 2014. It was an instant hit, garnering an American fan base, including genre master Stephen King, who on Twitter called the show "terrifying, funny, intelligent. It's like The Twilight Zone, only rated R."

Black Mirror was already a global success story, having sold to more than 90 territories, and a third season seemed a given. But instead of Channel 4, it was Netflix that swooped in, commissioning a 12-part season three in September 2015 for a reported $40 million in exchange for worldwide rights. Even then, however, it was assumed that Channel 4 would still air the show in the U.K. But last month, Endemol Shine, which owns Brooker's House of Tomorrow production banner, confirmed that Netflix outbid the network in its own backyard.

According to sources, Channel 4 had a first-look option for the series with Endemol. For its part, Endemol Shine said in a statement on March 29 that the British network "had the opportunity to recommission [Black Mirror] since 2013 and passed on this and subsequent co-production offers put to them. Only following this and the first series' exceptional performance when aired on Netflix did Netflix offer a longer order of 12 with an increased budget that allowed producers House of Tomorrow to realize their ambitions for the series. Further efforts were made to try to reach a settlement regarding a U.K. window for Channel 4, but these were also sadly to no avail."

However, Channel 4 immediately responded, saying it wasn't true their network had passed on the show and had "offered to recommission Black Mirror."

Whatever the true sequence of events, the deal has sent a chill across the European TV industry, worried that deep-pocketed online companies could poach their hit shows.

"It's terrifying," said one veteran producer, who has sold international rights for European series to Netflix in the past and spoke on condition of anonymity. "It undermines the foundation of the free-TV networks."

Netflix has been pumping cash into its European operations, commissioning original shows in the U.K. (royalist period piece The Crown), France (political thriller Marseille) and Italy (Mafia drama Suburra) as well as new series in Germany and Spain.

But taking a risk on original productions is one thing. Snatching away a show with an established fan base from the network that helped make it a hit is something else entirely.

"Black Mirror couldn't be a more Channel 4 show," said the network's controller, Jay Hunt, in a tersely worded statement following the announcement of the Netflix deal. "We took it from a dangerous idea to a brand that resonated globally."

Hunt added that it was "disappointing" that the first broadcast window in the U.K. had been sold off to the "highest bidder, ignoring the risk a publicly owned channel like 4 took backing it."

Hunt's second point is particularly relevant in Europe, where public networks fund a huge volume of TV series and many take risks on cutting edge or alternative content considered too edgy for commercial networks.

But does Channel 4 have any right to feel aggrieved? Sources claim that the network wasn't given an opportunity to match Netflix's offer, but even if it had been, it's unlikely the network could have put a similar amount of cash on the table. Channel 4 certainly wouldn't have been able to front a full 12 episodes of the series, a huge order for a British series, which traditionally have three-to-six episode runs.

"They're just trying to bring to attention that they picked a winner," claims Claire Enders, CEO of Enders Analysis, who says that Netflix's investment in British talent can only be good for the creative industries of the U.K., which, she says, will become the company's hub for global content. "They tend to pick winners and develop new types of talent, as indeed was the case with Black Mirror. Charlie Brooker went from a Guardian columnist to a TV guy. I'm sure they knew the game was up a long time ago."

Netflix increasingly sees itself as a global channel. Company CEO Reed Hastings has made it clear he wants the company's shows to play everywhere and exclusively on Netflix worldwide.

"We're going to see this [Black Mirror-type deal] replicated over and over again," remarks Enders. "This is the beginning of a wave of further rights acquisitions by Netflix, which are global models."