How ‘Shogun’ Helped FX Find Its Footing as a Streaming Empire

Six days before the debut of “Shōgun” last February, John Landgraf was worried about the “Endless Scroll.”

Sitting with his feet propped up on a low table in his office on the Fox lot in Los Angeles, the longtime head of FX explained what he meant with his signature soft-spoken, brainy intensity. The “endless scroll” is not a talisman from “Shōgun” or an artifact of the Middle Ages but rather a symptom of our times. It refers to the never-ending stream of content that so many of us now have at our fingertips.

When asked if he was worried viewers wouldn’t turn out for the most expensive production in the 30-year history of FX, Landgraf paused to think. Any butterflies he had about the show’s launch, he said finally, were wrapped up in his larger concern about the “endless scroll” effect that may be training us to have shorter and shorter attention spans. “You get 10, 15, maybe 25 seconds of somebody’s attention before they make a decision whether this is for them or not for them,” Landgraf said. “That’s the thing that I worry about most.”

Following that thread, Landgraf fretted about the prospect that humans will gradually lose interest in the stuff that is his absolute jam: dense, novelistic, narrative storytelling as delivered via movies and TV series — like a lavish sword-and-kimono costume drama set among warring factions in 16th-century Japan.

“The technologies enabled by computers and the internet are orders of magnitude bigger than almost any disruption we’ve ever seen, because they’re not just economic — they’re cognitive. They’re cultural,” Landgraf said. “They’re fundamentally transforming the way we live and the way we think and the way we learn.”

This response is far removed from the typical hype and bombast that is the natural language of Hollywood executives. But Landgraf, 62, is far removed from a typical executive.

“The culture that John has created at FX is very special,” says Justin Marks, who is showrunner and executive producer of “Shōgun” alongside his wife, Rachel Kondo. “You never feel like you’re working with people who are afraid of losing their jobs over one bad decision, which is incredibly rare these days.”

At a time when traditional cable channels are trying to avoid extinction, Landgraf and the organization he has steered for 20 years is enjoying a resurgence that has been five years in the making. Led by the critical and commercial success of “Shōgun,” FX packed a wallop this year with a busy slate of originals including “The Bear,” “What We Do in the Shadows,” “It’s Always Sunny in Philadelphia,” “Reservation Dogs” and the latest iterations of “American Horror Story,” “Fargo” and “Feud.”

Moreover, FX’s rebound started just when its parent company, Disney, needed some good news. “Shōgun” not only paid off on Disney’s considerable investment — estimated to be around $200 million for the production of Season 1 alone — but the show’s impact in the U.S. and key overseas territories helped quiet CEO Bob Iger’s critics as Disney’s stock price slumped. FX’s banner year was the proof Iger needed to counter the argument that he’d overpaid when he bought 21st Century Fox — which included the FX cable channel — for $71 billion in 2019.

“Year after year, they’ve demonstrated that they not only have a keen eye for great creativity, but they have guts,” Iger says of Landgraf and his team. “You have to be fearless and willing to take big risks.”

Iger had to back up his words of praise for the FX operation with Disney dollars shortly after the Disney-Fox deal closed in March 2019. “Shōgun” had been percolating in development at FX for years. Landgraf and FX Entertainment presidents Gina Balian and Nick Grad felt the project was finally ready and that FX could make a statement with a big, ambitious production.

“A guy comes into your office and says, ‘I’d like to make a limited series set hundreds of years ago, and it will be virtually all in Japanese with a Japanese cast,’” Iger recalls with a chuckle. “How do you make that bet? You end up making that bet because you bet on John and his team.”

“Shōgun” was the very first project that Balian commissioned for development after joining FX from HBO in 2012. Fortuitously, the series hit the airwaves right around the time that Iger was being publicly targeted in an activist investor campaign waged by Trian Partners’ Nelson Peltz — for the second time in two years. That was not a good look for Disney, a pillar of corporate America. If “Shōgun” had fizzled, it would have put even more pressure on Disney.

“It was equal parts relief and exhilaration that it worked, because we’d bet the farm on it,” Landgraf says.

The creative achievement of “Shōgun” was recognized with 18 Emmy Awards in September, which propelled FX past HBO and Netflix to lead the industry in total Emmy wins for the first time. It was a crowning moment for Landgraf and his tight-knit team.

“What makes FX is John’s taste, his intelligence, his profound love for artists and creators, his storytelling sense and his almost encyclopedic knowledge of TV and film,” says Dana Walden, Disney Entertainment co-chairman who oversees FX and the rest of Disney’s TV operations (other than ESPN) including global streaming. “And onto that foundation you layer in a number of excellent executives who have been together for a very long time. That’s unique in the industry right now.” Walden has been a close colleague of Landgraf ’s for 25 years.

Beyond award-season bragging rights, the success of “Shogun” helped reinforce FX’s role as a content engine driving Disney’s adult streaming strategy for Hulu and Disney+.

“We proved to ourselves that we can do it,” Balian says. “With all the marketing and the publicity planning and a real worldwide launch – our teams figured out how to navigate this huge system that has so much to offer in terms of support. We learned a lot about how to market and launch a show like that.”

And somehow, it seems fitting that it took a series that looks back 500 years in history to help FX find its way forward.

“You couldn’t make ‘Shōgun’ for anything other than a global streaming platform. You need a global audience to amortize the cost,” Landgraf says. “We proved that Disney should be making this kind of programming. But we didn’t do it without them. We made it with them, and we distributed it with them. And it worked.”

For Team FX, the path to figuring out how it would settle into the Disney universe was complicated by the internal drama that seized the media giant during Bob Chapek’s short tenure as CEO from 2020 through November 2022. (Iger had stepped down as CEO in February 2020.) The post-merger integration process that began under Iger in 2019 had already been humbling for FX. The company had been accustomed to having a lot of autonomy under the Fox regime. “We went from being an actual business that we managed to essentially a cost center inside Disney’s larger organization,” Landgraf said.

The radical restructuring of Disney’s network and studio operations that Chapek subsequently implemented also created a lot of internal agita and speed bumps. Iger restructured the restructuring the moment he returned to power in November of 2022.

The Chapek plan “was done in good faith, but it was very challenging because it functionally separated business and creative,” Landgraf observes. “Decoupling those two things sort of pitted those disciplines a little bit against each other more than creating a cooperative environment. The reconstitution of Disney Entertainment brought us all back together again.”

Amid all of the shuffling, the elevation of Dana Walden in 2022 to be the top executive running all TV might have been a catalyst for a leader of Landgraf’s stature to seek a job somewhere else. He’s been courted by many companies many times — and by his own account he’s never engaged because he’s never had a more tempting offer. He routinely expresses his gratitude for Iger’s leadership as well as for Walden and Peter Rice, the Fox veteran who held the top TV job immediately after the Disney deal but was pushed out in 2022 by Chapek.

“If Dana, Peter and I hadn’t come over together, I don’t think we would have made it through all that. Obviously, at a certain point, Peter didn’t make it through. I don’t think I’d still be here without Dana,” Landgraf says. “None of this would exist without Bob [Iger]. I don’t think I’d be here without Bob – term one and term two.”

Walden notes that she and Landgraf first worked closely together even before he joined FX, during the 1999-2004 period when Landgraf ran Danny DeVito’s Jersey Television banner. Jersey Television had a studio production pact with 20th Century Fox Television as Walden was climbing the ranks at that studio.

“There’s an enormous amount of trust between the two of us. We’ve been there for each other for a very long time,” Walden says. “From the moment I got this job, John said, ‘I’m thrilled.’ These jobs can get a little lonely at the top. I think he feels a little less lonely in his role because he has me as a partner.”

From Landgraf and Walden on down, the well established working relationships among the core executive team is a big advantage for the company, industry insiders say.

Balian considers herself a newbie at the company, and she’s heading into her 13th year as a senior production and programming executive. Grad is at 22 years and counting. Marketing chief Stephanie Gibbons passed her 20-year milestone earlier this year. Communications chief John Solberg is approaching 25 years. Eric Schrier spent 22 years as a key architect of FX before moving two years ago to a senior role under Walden as president of Disney Television Studios and business operations. Continuity of management breeds strong company culture, and the culture at FX is as strong as the chrome on the motorcycles seen in “Sons of Anarchy.”

“There’s just a scrappiness to the place,” says Balian during a sit-down interview with Grad and Landgraf in late October.

FX signed on the air in 1994 amid a boom cycle for cable channel launches. Thanks to its humble beginnings as a ragtag cousin of the Fox broadcast network, FX had a steeper climb to becoming a contender in prestige TV contests than HBO after “The Sopranos” hit the creative communities on both coasts like a meteor.

“You never counted on being given anything. You always felt you had to work for it, right?” Balian asks Grad and Landgraf. They nod.

“I go back to the same analysis I’ve been doing for 22 years,” Grad says, “which is, make really original, cool shit, and the rest will sort itself out.”

Iger made a visit to FX’s office on the West L.A. Fox lot days after the Disney-Fox acquisition agreement was reached in December 2017. He was already a fan of the work the company did, but he didn’t know Landgraf or anyone else there, with the exception of Grad. (Grad’s late father, MTM Television and 20th Century Fox executive Peter Grad, had been Iger’s business associate in the 1980s and ’90s.) “I walked in and said, ‘Tell me about yourselves,’” Iger recalls. “To a person, they understood the brand’s mission and what they stood for.”

Iger assured the nervous staffers that he had no intention of disrupting the FX ecosystem or imposing an overly Disney-fied work environment on them. Iger has learned the importance of preserving an acquired company’s unique culture and characteristics the hard way — by enduring difficult post-merger transitions.

“The culture of a company is extremely valuable and part of the value proposition in a deal,” Iger says. “You don’t create a Pixar unless you have a great culture, unless you have people who don’t stop trying to make something the best it can be. People who don’t accept mediocrity.”

FX’s strength flies in the face of trends that are reshaping the industry. Americans are bailing out of linear cable TV subscriptions in favor of less expensive streamers, a steady decline that spells doom for even the most established cable channels. FX still has tentpole franchises that draw viewers to the linear channel. That’s allowed it to experiment with slightly different programming strategies for the cable channel and the FX branded show portfolio that’s showcased on Hulu in the U.S. and Disney+ in major territories outside the U.S.

Walden points to the FX drama “Snowfall” as an example. During the show’s six-season run, the average age of viewers who tuned in was in the 60s. On Hulu, the average age was in the mid-30s. That’s clear evidence that making the show available on different platforms means that it reaches different viewers. Almost all of FX’s series eventually wind up airing on both linear and streaming. “We view it more as a windowing strategy versus an either/or,” Walden says.

FX leaders also still eagerly embrace the concept of producing a pilot episode before making a series greenlight decision. That seems antiquated by comparison to the number of outlets that make the yea-or-nay call after reading a few sample scripts. (HBO is a notable exception.)

Grad cites the FX comedy series “Atlanta” as an example of how starting out with only a pilot helped a series become what it was meant to be. As Donald Glover was crafting the show a decade ago, the star insisted that its first installment be directed by Hiro Murai, his collaborator on music videos released by Glover’s hip-hop alter ego, Childish Gambino. It was easier for FX execs to gamble on an untested TV director when the network was only paying for a pilot than to commit full-throttle to an eight- or 10-episode TV series. Pilots used to be the norm for all TV networks and studios, but that has also changed amid the rise of streaming.

“If we weren’t making pilots, I don’t know if we’d make that decision on Hiro, who turned out to be one of the most talented narrative directors in the entire industry,” Grad observes. “Cutting our risk into small [financial] milestones along the way definitely allows us to be much ballsier with our choices.”

Like other traditional outlets, FX has struggled to adapt to new norms for TV series production and the resulting impact on how creative talent is compensated. FX has some flexibility in dealmaking when it also serves as the studio, as it did on “Shōgun.” But the larger industry shift toward subscription business models and away from after-market sales of movies and TV shows has changed the stakes for creatives. It’s a factor behind the anger that fueled last year’s writers and actors strikes. And it’s by no means settled, the FX trio acknowledge.

“Psychologically, I like to live in a world where there’s home runs,” Grad says. “I think people like to know that even if the odds are stacked against them, there’s always the chance they could make life-changing money. And the fact that’s kind of off the table now is less our problem than it is a collective industry problem.”

Most of all, FX leaders pride themselves on working hand in hand with writers, producers and other creatives to find the essence of what the artist is trying to say with their work. FX doesn’t have the budget to write big checks to land starry packages. What it can offer creatives is a white-glove approach to honing the material, in an environment where the platform is handling 15 to 20 shows a year, not 150 to 200. It’s a strong selling point for a certain breed of writer, director, producer and star.

“We’re like relentless editors, but we’re not relentless editors who are trying to impose our own taste or our own aesthetic on something. We’re relentless editors who say, ‘OK, let us descend into the world that you’re in. Let us help you do the thing you want to do,” Landgraf explains. “We think about what are the best possible questions we can pose to you to challenge you, to make sure that you have thought [the story] through. We want to help artists make the very, very best version of the show that they can possibly make.”

Kondo, creator and executive producer of “Shōgun,” confirms that a note-taking session at FX is like none other, thanks to the skills leadership trio as well as key executives such as exec VP Kate Lambert and VP Lindsay Donohue. But it starts at the top.

“It’s amazing how deeply [Landgraf] listens to you and the degree of thought that goes into everything he says. He brings in philosophy, history, literature, the Bible – you name it, he brings it all to the table,” Kondo says. “I come to every meeting with my notebook cleared. I know I’m going to get something incredibly valuable, not only to what we’re working on but, like, for my life in general and how I think about my writing.”

John Landgraf knows something about human behavior. He was an anthropology major at Pitzer College. He’s been a television programming executive for most of his adult life. He’s studied the intersection of social movements and artistic and pop-culture trends. He’s fascinated by how communities are formed and how they splinter at a time when communication tools (aka the new iPhone in your pocket) are advancing at lightning speed.

One indisputable result of the quickening pace of innovation is the increasing amount of global economic activity that revolves around engaging consumers in some form of media — whether a TV show or a TikTok feed or a live virtual concert staged within a Fortnite video game. Will the soft power of media eventually become the most valuable commodity of all? The global economy seems to think so. And that also really worries Landgraf, as the largest of what he calls the “trillion-dollar companies” move deeper into the business he knows best.

“There’s something really strange in an economy where there are 500 companies in the S&P and seven of them account for 70% of the growth in the U.S. economy. That’s different,” he says, referring to the group of companies dubbed the “Magnificent Seven” by Wall Street: Apple, Alphabet (Google), Amazon, Microsoft, Nvidia, Meta and Tesla.

“I’m not making any value judgment on what they do or what they don’t do. But I can tell you, they’re not long-form storytelling companies,” he says. “And long-form storytelling has been very deeply at the center of American culture and American enterprise and American soft power and a whole lot of other things. And demoting it in the scheme of the communications hierarchy can have profound effects that really worry me.”

The Walt Disney Co. is no mom-and-pop operation; as of Nov. 21, its market cap stood at $209 billion. But in the scheme of companies with trillion-dollar balance sheets, Disney could become a takeover target down the road. For now, however, Landgraf is glad that FX found a place in the Magic Kingdom.

“Disney made a really bold choice to pivot a century-old company into streaming and the direct-to-consumer business,” he says. “And they decided that they wanted to be as excellent in general entertainment as they are in family entertainment and sports.”

FX will take another swing at a big-budget event series with the reimagining of “Alien” with “Fargo” showrunner Noah Hawley. It’s slated to debut in the summer. So the pressure to deliver on a global scale begins anew.

Also on the to-do list for next year is moving into new offices on the Disney studio lot in Burbank. That will be the symbolic final step in the Disney merger integration for FX’s nearly 300 staffers, who have continued to work out of leased offices on the Fox lot.

There are myriad other challenges ahead. Some of them are utterly unpredictable, like the forward march of AI and technological developments that might further upend the pay-TV ecosystem. Others are as old as the Hollywood Hills.

“I’ll give you an analogy,” Landgraf says. “Somebody hands you a giant bucket full of acorns, and only one of them is going to be an oak tree. And they say, ‘Pick the acorn out of this bucket that’s going to be an oak tree.’” He smiles. “You do have the ability to plant it, fertilize it, water it. But some acorns just are not going to grow into oak trees, no matter what you do with them, so you’ve got to pick the ones that have the ability to do that.”

Balian and Grad take in the oak-tree analogy as Landgraf argues that the real “magic” of the entertainment business is found in the hunt for the right acorn to nurture. That heady assertion hangs in the air for a few seconds, and then each executive heads back to their office to plant some more trees.

Makeup (Balian): Agostina/Exclusive Artists using L’Oreal Paris; Hair (Balian): David Gardner/Exclusive Artists using Phyto Paris