With Streaming’s First Major Series Emmy, Hulu Hits Netflix Where it Hurts

You could hear the wails from Netflix’s Redmond offices when the winner was announced.

With Game of Thrones on ice for the season, this year’s Emmy for Best Drama Series was anyone’s game. NBC had its breakthrough hit This is Us, while HBO had Westworld in Thrones’ place. The category really belonged to the streaming services: Netflix slotted in Stranger ThingsHouse of Cards, and The Crown, while Hulu landed in serious Emmy contention for the first time with The Handmaid’s Tale. Unless This is Us cried its way onto voter ballots, this was the year that streaming would finally be recognized by the Academy. I had called it for The Crown, an immaculately conceived bio-series about Queen Elizabeth II that had already claimed accolades before. The envelope tonight, read by Oprah, had The Handmaid’s Tale printed inside.

It’s a major triumph for the streaming world, the television industry finally acknowledging it as a creative force. It’s a stunning victory for Hulu, which had lagged behind Netflix and Amazon when it came to critical acclaim and industry recognition. For Netflix, it is an embarrassing defeat that puts its status as the premier content provider on shaky ground.

Streaming services haven’t been investing in “For Your Consideration” Emmy campaigns for fun. Netflix, Amazon, and Hulu all understand what an Emmy win can mean for their series and their bottom lines. A high-profile win is validation, not just of the particular series but of its associated service. It’s a promise to potential subscribers that their content is of the same high-quality, awards-worthy material they expect from premium and cable channels like HBO and AMC. Original programming has eclipsed licensed content as the key drivers of streaming growth – more people are subscribing for Stranger Things instead of Breaking Bad – and awards recognition, just like it was for HBO, is paramount in getting people interested, engaged, and subscribed. An Emmy win is also attractive to top talent – the producers, directors, and actors who are fleeing film en masse for TV’s greener, more creatively rich pastures. Besides from the hundreds of millions of dollars that these providers will give them for their work, they will be recognized by the industry.

Hulu’s victory shifts the spotlight away from Netflix. Originally a online repository for current broadcast series, Hulu can now claim itself as a legitimate creator of award-winning, top-tier content. Viewers will likely succumb to the curiosity factor and subscribe to Hulu to see the The Handmaid’s Tale for themselves. The series, which also claimed Emmys in the Lead Actress, Supporting Actress, and Writing categories, will be the flagship for Hulu’s inevitable, aggressive campaign for more prestige, Emmy-worthy content (the storyline – Elisabeth Moss finally receives overdue recognition for her work, with Hulu). Hollywood, always looking for a new platform for their stories, will see Moss with her two Emmys and hop on the phone with execs to plot their own domination. All of this industry attention sets Hulu up for continued awards success in the years to come.

Where does this leave the trailblazing Netflix? The streaming giant has had a tough 2017, as pressure to find the next big hit led to critical disappointments and a wave of cancellations. Meanwhile, Netflix’s licensed library continues shrinking, most publicly when Disney yanked its titles in favor of its own streaming service. Not only does Hulu’s success sting the ego, it makes it more difficult to work with prestigious collaborators. Now, Netflix will have a legitimate challenger in the race to new and exciting programs, and the “Emmy winner” moniker will put Hulu ahead in more than a few races. Netflix will likely have to break out serious cash to remain competitive, which won’t be sustainable without either cutting back on licensing deals or raising prices on customers (and that has never worked out well for them).

Netflix is still leading the streaming market in every important metric, but this critical blow is proof that it isn’t the only game in town for the industry. Netflix needs marquee original programs to remain on top, and acquiring those just got harder now that Hulu is sitting pretty with the biggest award in the industry. More than just bragging rights, Hulu has a brand new bargaining chip to bring to the table, one it will surely point out that Netflix doesn’t have.

Don’t be surprised if Netflix tries for a co-producing credit on the final season of Game of Thrones.

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