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Television

The Binge Purge 156

TV's streaming model is broken. It's also not going away. For Hollywood, figuring that out will be a horror show. From a report: Across the town, there's despair and creative destruction and all sorts of countervailing indicators. Certain shows that were enthusiastically green-lit two years ago probably wouldn't be made now. Yet there are still streamers burning mountains of cash to entertain audiences that already have too much to watch. Netflix has tightened the screws and recovered somewhat, but the inarguable consensus is that there is still a great deal of pain to come as the industry cuts back, consolidates, and fumbles toward a more functional economic framework. The high-stakes Writers Guild of America strike has focused attention on Hollywood's labor unrest, but the really systemic issue is streaming's busted math. There may be no problem more foundational than the way the system monetizes its biggest hits: It doesn't.

Just ask Shawn Ryan. In April, the veteran TV producer's latest show, the spy thriller The Night Agent, became the fifth-most-watched English-language original series in Netflix's history, generating 627 million viewing hours in its first four weeks. As it climbed to the heights of such platform-defining smashes as Stranger Things and Bridgerton, Ryan wondered how The Night Agent's success might be reflected in his compensation. "I had done the calculations. Half a billion hours is the equivalent of over 61 million people watching all ten episodes in 18 days. Those shows that air after the Super Bowl -- it's like having five or ten of them. So I asked my lawyer, 'What does that mean?'" recalls Ryan. As it turns out, not much. "In my case, it means that I got paid what I got paid. I'll get a little bonus when season two gets picked up and a nominal royalty fee for each additional episode that gets made. But if you think I'm going out and buying a private jet, you're way, way off."

Ryan says he'll probably make less money from The Night Agent than he did from The Shield, the cop drama he created in 2002, even though the latter ran on the then-nascent cable channel FX and never delivered Super Bowl numbers. "The promise was that if you made the company billions, you were going to get a lot of millions," he says. "That promise has gone away." Nobody is crying for Ryan, of course, and he wouldn't want them to. ("I'm not complaining!" he says. "I'm not unaware of my position relative to most people financially.") But he has a point. Once, in a more rational time, there was a direct relationship between the number of people who watched a show and the number of jets its creator could buy. More viewers meant higher ad rates, and the biggest hits could be sold to syndication and international markets. The people behind those hits got a cut, which is why the duo who invented Friends probably haven't flown commercial since the 1990s. Streaming shows, in contrast, have fewer ads (or none at all) and are typically confined to their original platforms forever. For the people who make TV, the connection between ratings and reward has been severed.
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The Binge Purge

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  • by fluffernutter ( 1411889 ) on Friday June 09, 2023 @08:28AM (#63588350)

    the inarguable consensus is that there is still a great deal of pain to come as the industry cuts back, consolidates, and fumbles toward a more functional economic framework.

    I didn't realize these networks in danger of going bankrupt. Or perhaps the concept that there can be continuous growth forever and to infinity is the problem.

    • by dmay34 ( 6770232 )

      The problem is that the "Spend crazy money on content and make it up of subscriptions" worked for Netflix when they were the only platform and everyone put their stuff on netflix.

      It doesn't work when there are 3 dozen services. People generally choose 1 or 2 and ignore the rest (or others serve as loss leaders for other services, like HBO Max and Prime Video)

      • It STILL works for Netflix. Having a sustainable business isn't enough for shareholders anywhere, it seems. Shareholders want continuous GROWTH and Netflix already has market penetration like crazy all around the world. The people who didn't subscribe before are being picked up by ad-supported tiers and by cutting subscription sharing - because they're the only likely candidates left for new sales. They probably don't even need much new content, just better curation and recommendations again. They used

        • by ceoyoyo ( 59147 )

          Shareholders want continuous GROWTH

          Do you expect a percent return on your investments? That includes interest on money in a savings account, return on retirement investments, accumulation of equity in a house, etc.

          If so, I hate to tell you, but that's not only continuous growth, it's exponential growth.

          • Netflix the company gets a return and profits. But they don't pay dividends. Like most stocks, they're just a way to gamble on potential stock price changes rather than investing in the company itself. Therefore they see no reason to pay any profits to the actual owners of the company and just reinvest every dollar back into new content and chasing a higher stock price.

            Several of the members of the board of directors are shareholders and have a vested interest in the stock price, even to the detriment of

            • In case my wording sounds strange, I don't believe that investing everything in new content is a good way for the company to invest in itself. They need to attract stable, long term investors. They've been around too long to keep trying to pump their stock price directly.

            • by ceoyoyo ( 59147 )

              This is a very common line from Internet critics who don't understand what a stock is.

              Netflix doesn't pay dividends because they've judged that the company has a use for any money they generate. The money either gets reinvested or accumulates. Netflix is in the hole so they're not accumulating money. They are investing like mad to try and compete. If they ever create a stable business, they'll start paying dividends, because everybody knows that a company that's just accumulating a giant pile of cash withou

          • by flink ( 18449 )

            Shareholders want continuous GROWTH

            Do you expect a percent return on your investments? That includes interest on money in a savings account, return on retirement investments, accumulation of equity in a house, etc.

            If so, I hate to tell you, but that's not only continuous growth, it's exponential growth.

            That's only true if you expect the only way you are going to see a return on your investment is when you sell your stake. A company could stay a static size, with the same number of employees, and the same number of customers and the same market share indefinitely and the investors would still see a return as long as the corporation paid out a modest dividend every year as a % of net profits.

            Profit only requires exponential growth in the stocks-as-ponzi-scheme model of investment. If stocks were values on

  • by JasterBobaMereel ( 1102861 ) on Friday June 09, 2023 @08:30AM (#63588356)

    Too many services each with some must watch shows, some good shows, and a lot of filler ...

    When people change services a few times and realise they will never find all the good shows, and if they do they will be eventually be removed
    and the show they are watching will be cancelled ...

    Then they stop changing and settle on one service (out of many) - or cancel all of them ...

    • by Firethorn ( 177587 ) on Friday June 09, 2023 @08:43AM (#63588408) Homepage Journal

      Indeed. Netflix, with a huge library back in the day, was worth the $10-15 it cost. Now the library is relatively tiny. They also got rid of their rating system - which even after they lost most of their library, was at least still able to recommend stuff I'd like. Now I have to go searching for it, and there's a lot of false positives(IE shows I don't like). I ended up canceling.

      The only "service" I have today is amazon prime, and that's more because of the free shipping to alaska.

    • Re: (Score:2, Insightful)

      by thomn8r ( 635504 )

      Too many services each with some must watch shows, some good shows, and a lot of filler

      There's no such thing as a must-watch show.

    • When people change services a few times and realise they will never find all the good shows, and if they do they will be eventually be removed

      I've never understood paying monthly for a streaming service just to have access to a show you've seen 100 times. This is where physical media is way cheaper. For that matter, you can buy permanent streaming rights of individual episodes or seasons for twice that price if you hate physical media and still save money.

      I do keep one baseline service (Netflix) and subscribe to others as they have new seasons of shows I want to watch. A lot of services I will only subscribe to for a month or two until I catch

    • "When people change services a few times and realise they will never find all the good shows, and if they do they will be eventually be removed
      and the show they are watching will be cancelled ...

      So honestly, who cares if a show is eventually removed from a platform? Why would anybody expect media to access persist indefinitely? I really liked "WKRP in Cincinnati", but the copyright gods doomed my access to that. My life isn't poorer for it's loss. Cancellation was always a problem in broadcast media, and always will be. "never find all the good shows" - That's an interesting way of describing a good thing as a bad one.

      Honestly, the benefits of the media landscape has never, in all of history, been

      • by Calydor ( 739835 )

        Because if you don't get started on it when it's new, but maybe only get it recommended when it's got three or four seasons, you're suddenly on a very tight timer to start watching it or it's gone forever.

        • Maybe? But how often does that happen, and does it really matter? Seems like a use case that's true, but mostly abstract.

          But really, most of the time when a streaming service drops a show it's due to licensing problems (expiration, for instance), which also generally means if you really do want to watch it, you can find it "somewhere".

  • Honestly, Apple had it right the first time with iTunes when they introduced videos. Just sell subscriptions to shows that people want to watch and let people pay to rent movies they want to watch.

    I would have happily paid $40 to have had the opportunity to watch Disney's Little Mermaid with my daughter and wife in my home on opening weekend (beats the heck out of taking the family to the theater). Similarly, I would pay $40 for a season of a big name production, like Secret Wars, or $20 to try something ne

    • A lot of traditional pay/broadcast TV do make it possible to buy permanent streaming rights for seasons of shows.

      Netflix won't do that because it leaves a paper trail of metrics on how popular a show is. Just look at Arrested Development. You can buy the "Complete Series" on DVD but it's only seasons 1-3. Netflix licensed season 4 and Fox did release that separately. Season 5 was financed by Netflix and released 4 years ago and not only can you still not buy it - they are planning to remove it from stre

      • by dmay34 ( 6770232 )

        What's really going to kill 90%+ of these streaming services is the next recession. When families start cutting back, extra streaming services are going to be the first things to go. This isn't unique to streaming, and there are lots of industries that are very susceptible to recessions -like Cruise lines. But these services are use to saving up through recessions, and cruise lines especially are known for having multi-billions in emergency savings.

        If streaming services aren't raking in money now to save fo

  • Ignorance (Score:4, Insightful)

    by JBMcB ( 73720 ) on Friday June 09, 2023 @08:36AM (#63588380)

    . In April, the veteran TV producer's latest show, the spy thriller The Night Agent, became the fifth-most-watched English-language original series in Netflix's history, generating 627 million viewing hours in its first four weeks. As it climbed to the heights of such platform-defining smashes as Stranger Things and Bridgerton, Ryan wondered how The Night Agent's success might be reflected in his compensation.

    A "veteran" TV producer was given a flat-rate compensation package on a network with no ads, then was confused why his popular show didn't earn him extra money? He didn't get paid more because it didn't generate more ad revenue, because there is no ad revenue. Where did he think the extra money would come from?

    Your extra money comes from the next show you produce, which you can charge more for, unless you have a multi-show deal, also at a flat rate, that you negotiated with the network.

    • Re:Ignorance (Score:5, Insightful)

      by quantaman ( 517394 ) on Friday June 09, 2023 @12:16PM (#63589144)

      . In April, the veteran TV producer's latest show, the spy thriller The Night Agent, became the fifth-most-watched English-language original series in Netflix's history, generating 627 million viewing hours in its first four weeks. As it climbed to the heights of such platform-defining smashes as Stranger Things and Bridgerton, Ryan wondered how The Night Agent's success might be reflected in his compensation.

      A "veteran" TV producer was given a flat-rate compensation package on a network with no ads, then was confused why his popular show didn't earn him extra money? He didn't get paid more because it didn't generate more ad revenue, because there is no ad revenue. Where did he think the extra money would come from?

      Your extra money comes from the next show you produce, which you can charge more for, unless you have a multi-show deal, also at a flat rate, that you negotiated with the network.

      Human nature being what it is you'll probably put in a bit more effort if you're rewarded for the show your creating, rather than the abstract reward of getting a bigger reward for the next one.

      But I think the broader issue is that gauging the success of a streaming show is a lot more difficult. Partially because the services are secretive (since they're not reliant on ad dollars), and partially because success is more complicated than "X hours viewed by Y demographics = Z ad dollars".

      But hiding the metrics is useful for the streaming services since it removes bargaining power from the artists and that lowers salaries.

      • "Human nature being what it is you'll probably put in a bit more effort if you're rewarded for the show your creating, rather than the abstract reward of getting a bigger reward for the next one."

        Then negotiate the bonus you expect into the next contract.

    • by g01d4 ( 888748 )

      Where did he think the extra money would come from?

      He thinks the extra money comes from the new subscribers his show brings in. How much of that extra money currently goes into the pockets of the c-suite?

      • Let's flip this logic around. If one of the flat-rate actors this producer employs becomes really popular, and it's clear the show is popular because of a particular actor, is he going to pay that actor a bonus after the show is released, if the actor's contract doesn't specify they are entitled to it? Snowball's chance in hell. That actor can ask for more for the follow-up series, but gets *nothing* more than they are are contractually entitled to for work completed.

    • If you ask for monkey points, you get monkey points

      Not sure how anyone in Hollywood can be surprised by this...
  • Streaming shows, in contrast, have fewer ads (or none at all) and are typically confined to their original platforms forever.

    And therein lies the main problem of how streaming actually ended up being worse than cable - shows/movies that are exclusive to a platform can't be seen in any other way - for example, I can't get Ted Lasso on Blu-ray and the only way I can watch it (legally) is if I have a subscription to the single service that runs it (if they still decide to offer it)

    • Dazzler Media has purchased UK distribution rights for physical media for several Apple TV shows. A few Blu-Rays are out, but not Ted Lasso yet. Presumably a proper release in 24p, so you'd be able to use a region free player to view without any odd distortions.

      10 years from now, streaming companies still want you to subscribe to see the show again. Just look at how many people cancelled Netflix when the Office left. And that's with physical media actually available. And if they want you to watch the n

  • Some are commenting on the unfairness of revenue sharing between streaming services, show owners, and the "talent" that produce those shows, which is the target of the quoted article. Others are commenting on the revenue base for the streaming model altogether. These are separate issues.

    The streaming model does have revenue issues, with some of the services looking at ads (that evil that cures all fiscal problems, apparently) But unless those streaming services go bankrupt, they will have to figure out h

  • "...the connection between ratings and reward has been severed."

    No, it hasn't. When someone claims they aren't "complaining" that doesn't mean they aren't, but we can know they are still making obscene money. Just not "buy a jet" with a year's compensation money. Reward hasn't been "severed", it's still preposterous.

  • Maybe it is the expectations that are off and not the pay.

  • With broadcast television there were ratings, Nielsen numbers and advertising revenue to measure success. The streamers have so such public metrics, so almost impossible to empirically determine success.

    • Nielsen does distribute hardware for tracking streaming. It's mostly on the basis of audio recognition to determine the show being streamed. This is still mostly television viewing and not portable devices. Instead of selling to advertisers, they'll probably be offering their services to studios/writers/etc to help negotiate contracts.

  • Sympathy Concerto in Wahh-major for all the poor poor "creatives" (god, what a repugnant term - the fact that they chose it for themselves is a sign of the aesthetic malaise plaguing the whole entertainment business from top to bottom) forced to endure a middle-class lifestyle for churning out decrepit midwit shit with any signs of ingenuity or even life focus-grouped right the fuck out of it in pre-production.

    • the fact that they chose it for themselves

      Oh, really now? I missed that. Could I get you to call up the notes from the meeting of the official consortium of artistic individuals, and show me in the minutes where they voted on that?

      Matter of fact, "creatives" isn't a particularly creative term. I'm offering better than even odds that it was applied from without.

    • The only people who use the term "creatives" are cringey internet hard-ons like yourself.
    • Right?

      I'd like to have sympathy for the writer's strike - except for the fact that for the majority of shows in the last 2 decades, the writing has taken a steep dive and been absolute garbage.

      Perhaps the problem is the shitty writers need to be fired???
  • Spend lots of money, get lots of users & viewed hours, who cares how much debt we rack up, we'll figure out profit later. Now, with interest rates higher, bank failures and a bunch of the free VC money spooked; it's later. Wall street wants profit. The execs sure as hell aren't taking pay cuts, so they're scrambling to slash & squeeze whatever they can.
  • The downgrade in huge profits has nothing to do with ad revenue nor syndication.

    Instead, there are so many services buying, that it got easy to get bought. So a whole new slew of people joined the industry. In 1988, during the strike, the vote was 2,111 members for, 422 against settling.

    For the 2007 strike, they had 12,000 members. (tripled over 2 decades)

    For the current (2023) strike, they have over 20,000 members ( + a third over 16 years)

    Yes, the profit has not gone up, but that would be fine if they h

  • ...towards the consumer. Never has the value chain been more thoroughly disrupted. People used to be willing to pay for that value. If you had 100 movies on your shelf, you probably paid around$1500 for them - and for the dubious honour of having little, unsightly, colourful boxes sitting there just.... taking space. But you could draw a direct line from creator to consumer, right through money,

    The last movie I physically bought was the most recent HD restoration of JC's "The Thing". Before that it was a Ma

  • Binging and streaming have nothing to do with it. It's the model that has changed...

    Those shows that come on after the Super Bowl with millions of viewers, those viewers are not paying to see those shows, the advertisers are paying to be placed in the commercial breaks. That's where the millions and billions come from.

    But on streaming platforms, viewers pay a flat rate to have those advertisements removed. Netflix doesn't rake in millions and billions because they're not (or weren't anyway) selling off comm

  • Not once in these conversations has anyone discussed the absurdly high pay given to CEO's. CEO pay should be capped at $1,000,000, because nobody needs to earn more than a million dollars a year. The rest of the money can then go to show creators, while making streaming profitable.

  • I can't be bothered to watch 8 episodes and wait a year. Which reminds me I need to cancel Netflix and Disney.

    • Seriously. WTF Holly wood!!!!

      < 20 episodes == mini-series

      20+ episodes == one season

      I am so damn sick of 8 episode "seasons"... fuck off
  • "For the people who make TV, the connection between ratings and reward has been severed."

    So what you're saying is that they've joined almost every rank- and- file worker in America. The connection between productivity and pay for intentionally severed back in the 70's because fuck you is why. Now they live in a land of golden parachutes while everyone else struggles to get by. Totes "fair and equitable" .

    I hope the stock market crumbles, our lives are already fucked, time to share a bit of the pain.

  • I'm looking forward to next Netflix documentary, "Polar Bears", featuring nothing but Black Bears.

  • The way scripted television gets made today has transformed the careers of writers.... https://www.vox.com/videos/202... [vox.com]
  • There are a very few gems worth watching in the monstrous pile of steaming stinking shit (nice alliteration, eh?) that is streaming. Especially Netflix.

    The reality is that streaming providers thinking and actions sit somewhere between the many brick and mortar retailers who offer sales on the crap no one needs, and idiot consumers who buy the stuff "because I got a good deal, ah-hue ah-hue ah-hue"; smiling like they are geniuses and not the retards they are.

    Spending money on useless shit that you don't need

  • by RogueWarrior65 ( 678876 ) on Friday June 09, 2023 @01:17PM (#63589262)

    The Night Agent is a success because it's a decent story and when the characters shoot, they don't act like paintball players with unlimited ammunition just spraying and praying. If you're looking for something similarly interesting, try Rabbit Hole on Paramount+. I'm also liking Silo on Apple+ a lot too. Andor on Disney+ is good, too. They all keep you guessing as to what's going on. The shows that I find unwatchable are things like Citadel on Prime.

    As for the economics of it all, the royalty business model has to change. The distributors don't want to spend money on expensive shows that they have to keep paying for which is why you see a lot of cheaper foreign shows most of which are unwatchable. Quality comes at a price as well it should.

  • They’ve sean residuals drop significantly, and will strike if no good deal is reached. Probably a larger upfront fee to makeup for the lack of significant residuals; which once was ~70 of their income.
  • There was for a time, but not now. For the past couple of years, Netflix has been embarrassing itself with low-quality offerings while simultaneously failing to promote its catalogue of brilliant ones from prior years. HBO is doing okay, but nowhere near its past glories. Amazon is a wasteland with a few oases of creativity that you have to make a real effort to find, and I don't feel like going on a damn treasure hunt just to get what I already paid for. Hulu is trash. I won't even consider the other

The unfacts, did we have them, are too imprecisely few to warrant our certitude.

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