Why Netflix is betting big on true-crime shows despite legal drama

• Netflix continues to seek out true-crime shows despite the legal risks.
• The streamer is facing a growing number of defamation lawsuits, which can increase production costs.
• But Netflix is not slowing down commissions, as the genre drives subscriber engagement.

“Monsters: The Lyle and Erik Menendez Story,” about the title characters’ 1989 murders of their parents, quickly shot to No. 1 on Netflix, and just as quickly sparked backlash from people the show portrays over its accuracy.

Meanwhile, Netflix faces defamation lawsuits over other popular titles based on real-life drama, such as the stalker saga “Baby Reindeer” and “Inventing Anna” about the Anna Sorokin (aka Anna Delvey) scam. By The Wall Street Journal’s count, there have been more than 20 defamation suits filed in the US against Netflix and its production partners since 2019 over real-life stories that were the subject of Netflix programming, with at least six such suits filed this year. The Journal reported that the rise in litigation has driven up the cost of making such programming.

But that hasn’t dulled Netflix’s thirst for crime fare, which shows no sign of letting up, according to Business Insider’s interviews with agents and producers, as well as commissioning data from Ampere Analysis.

Other streamers like Hulu and Peacock have also stocked their libraries with true crime, but none has the ability to give it the attention that Netflix can, with its massive reach of over 282 million global subscribers.

Guy Bisson, executive director of Ampere Analysis, said that among the six biggest streamers' commission activity, crime titles have seen the biggest percentage increase so far this year compared to a year earlier, representing one-fourth of all global, scripted, first-run content. Meanwhile, traditionally expensive genres like sci-fi and fantasy are down the most, he added.

"What generally is going on is, you could almost call a broadcastification of streaming — the pullback from expensive content," Bisson said. "Streaming needs to attract that generalist audience. So they're looking to get more bang for their buck."

True-crime shows are regularly among Netflix's top-watched. "Dahmer," from mega-producer Ryan Murphy, was No. 3 on Netflix's most popular TV shows viewed of all time, as of September 29, with more than 1 billion hours viewed. The next Murphy special in the same anthology series, "Monsters: The Lyle and Erik Menendez Story," also hit the top of Netflix's list of 10 US TV shows in its first two weeks. According to Digital i, a streaming measurement and research service, two of Netflix's top 10 TV shows in Q3 were crime series ("Monsters: The Lyle and Erik Menendez Story," "American Murder: Laci Peterson").

"Clearly, it's working for them," a top TV agent said, speaking anonymously to protect business relationships, adding that Netflix, like other platforms, is "reacting to what people want."

Netflix faces lawsuits over true-crime shows

While true-crime shows often have the potential to become low-budget hits, they can also involve legal risks and associated costs.

"Baby Reindeer," another smash hit, spent eight weeks on Netflix's Global Top 10 TV list and won six Emmys. But it also sparked a lawsuit. Netflix has failed to get a judge to dismiss the defamation suit brought by the woman who inspired the drama series, who is seeking at least $170 million. Netflix has argued that most viewers would understand the show's claims weren't factual because it was dramatized. The judge ruled that even though certain events in the show didn't happen, it's billed as "a true story," inviting the audience to accept it as so. Nevertheless, the legal drama didn't stop Netflix from inking a new partnership with the show's creator, Richard Gadd, in September.

Netflix is also being sued by a friend of Anna Sorokin's, Rachel Williams, who claims she was portrayed in "Inventing Anna" — created by superstar showrunner Shonda Rhimes — as an opportunistic sidekick rather than a dupe. Netflix recently sought to protect the notes of the New York magazine writer whose story inspired the series.

With all the legal headaches, one might expect Netflix to pull back from the genre, but that hasn't been the case. One reason: Polls have shown people love watching portrayals of true crime on the screen, with half of Americans saying they enjoy the genre.

"I don't think it's going to stop them," said a second agent of the legal issues around some crime shows. "They're going to continue to look for things that are popular and cool."

It's possible people will burn out from Ryan Murphy, who seems to be everywhere, and turn to less gory shows for entertainment; or that the true-crime phenomenon will lose some steam. Data from Parrot Analytics suggested viewer demand for true-crime documentaries — as opposed to scripted shows — on Netflix is far outweighed by supply. The second agent said Netflix is wary of topics that have become too saturated.

"There's too many serial killers now, so I think that's harder," the agent added.

Still, for now, Netflix is likely to keep giving people what they want.

The third installment of "Monsters," starring serial killer Ed Gein, has already been announced.