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.
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.
Growth (Score:3)
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.
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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)
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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
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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.
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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
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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.
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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
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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
Too many, each charging for content .. (Score:4, Informative)
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 ...
Re:Too many, each charging for content .. (Score:4, Interesting)
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:Too many, each charging for content .. (Score:5, Funny)
The only "service" I have today is amazon prime, and that's more because of the free shipping to alaska.
Psst! They ship to other places for free too - you don't have to live in Alaska.
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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.
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Congratulations, you got to be a pedant. Do you feel good now?
Re: Too many, each charging for content .. (Score:5, Informative)
A pedant is someone who is being pedantic. Being wrong is its own separate definition.
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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
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"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
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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.
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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".
Apple had it right with iTunes (Score:2)
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
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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
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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)
. 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)
. 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.
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"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.
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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?
Possibilities (Score:2)
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.
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Not sure how anyone in Hollywood can be surprised by this...
Streaming = JBOS (Just a Bunch of Silos) (Score:2)
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)
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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
comments here seem confused (Score:2)
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
Severed? (Score:2)
"...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.
entertainers (Score:2)
Maybe it is the expectations that are off and not the pay.
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Ratings (Score:2)
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.
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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.
Now streaming: World's tiniest violin (Score:2)
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.
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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.
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So everybody should be productive cogs in the victorian-era machines that drove the industrial revolution .Seems like you not only do not aspire to better, you revel in not doing so. To each their own.
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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???
The were doing the tech company model (Score:2)
Not profits, but supply (Score:2)
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
The value proposition table is tilted... (Score:2)
...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
Viewers never made them millions or billions... (Score:2)
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
Never Have I Ever... (Score:2)
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.
Where's the 20+ episode seasons (Score:2)
I can't be bothered to watch 8 episodes and wait a year. Which reminds me I need to cancel Netflix and Disney.
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< 20 episodes == mini-series
20+ episodes == one season
I am so damn sick of 8 episode "seasons"... fuck off
Progress? (Score:2)
"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.
Re: Progress? (Score:2)
Fuck you phone. Ugh. Proofread man, proofread.
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Anyway (Score:2)
I'm looking forward to next Netflix documentary, "Polar Bears", featuring nothing but Black Bears.
How streaming caused the TV writers strike (Score:2)
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Streamers Don't Have Too Much To Watch (Score:2)
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
It's the story, stupid. (Score:3)
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.
SGA is nexr (Score:2)
There's not "too much to watch" anymore. (Score:2)
Re:So Sad (Score:5, Insightful)
The issue is not that streaming services are not making money. The issue is that the money is not being passed along to creators, and that is unsustainable.
Re:So Sad (Score:5, Insightful)
I doubt that. Does Netflix make more money because a show is very popular? Unless people are directly subscribing just to watch that show, there's no mechanism to do profit from a wildly successful show. The business model is based on having just enough decent content for you to maintain your subscription. If a show is wildly successful, well, they may get a few more subscribers but more likely their users will just not cancel for another few months.
What these people are complaining about is that they think people watching = profit made, which just isn't the case, at least with the current model. To monetize the actual success of the show, they'd need to run ads.
Actually I just forgot that Netflix has an ad-supported tier now, so I'd be curious how well that model works.
Re:So Sad (Score:4, Insightful)
I think it's the executives of the streaming service that need to learn how to live on less money instead of the producers/directors/actors/writers.
Re:So Sad (Score:5, Informative)
Not to mention it's a LOT easier for a streaming service to determine what is actually getting watched than it was for broadcast TV, cable, and satellite solutions.
Re:So Sad (Score:5, Insightful)
To monetize the actual success of the show, they'd need to run ads.
Ads don't make as much money as subscribers.
And really, Netflix wants the world in the dark on the relative success of each show - especially since they want to keep paying one-off rates for show production with no royalties. For better or worse, their profitability is enhanced more by getting showrunners, writers, and actors to work for less pay. Ideally, they get the contract signed for the second season before any of the showrunners know their show is a hit. Traditional TV pays royalties and residuals for syndication and so on.
Re:So Sad (Score:5, Insightful)
Everyone missing the point that Netflix is like the VC model. The returns are averaged out over all of the shows. This results in the hit producers getting underpaid and the flops getting overpaid. Of course no one knows the hits from the flops ahead of time. Consider that Netflix is also like a VC portfolio for the viewer too. They pay a fixed price and get a mix of hits and flops.
So change the risk model for the show producers to be more like a start up. Show producers could accept lower payments from Netflix and then retain the secondary distribution rights. Then if the show is a hit you have some upside. Of course if is a flop you also get some downside. What is not fair is a model when show producers only get upside from hits without suffering on a flop. This choice would be part of the negotiation when the show is sold to Netflix.
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You seem to have missed the main point: there is no secondary distribution, so current contracts that use that to compensate creators for success don't work. In a reasonable world the contracts would have changed when producers created a service in which there is no secondary distribution. But it appears that never happened. So now the writers have to go through a strike just to get the standard contract terms changed to reflect the reality that production and indefinite distribution will now be entirely
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You are saying these shows are never going to reruns on other channels? Secondary distribution doesn't have to be immediate.
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Yes, there is no secondary distribution on these. There will be no reruns on other channels. In the case of something like Stranger Things, Netflix owns it, and they have no reason to let anyone else ever show it. Putting it on old-school broadcast TV goes against their "streaming is the only thing that matters" message, and letting another streaming service have it would be giving something to their direct competitors. And in both cases it sends the message that if you're patient you can get the show witho
Re: So Sad (Score:2)
It's kinda hard to syndicate when they only make 6-10 episodes a year.
Re: So Sad (Score:4, Interesting)
Most series would be a lot better as 6 episode shows.
I don't agree with this. I usually enjoy a show and want to be with the characters and in the universe as much as possible.
Would Babylon 5 been a tighter show with 10 episode season? Undoubtedly but I would have missed having these stories and characters in my life for as long as they were. The same with Stargate, Star Trek TNG, Person of Interests, etc. You lose a lot of subtly and universe building when you only have enough time to really focus on the A plot.
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You might think that but you're a dumbass.
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I don't understand what's inherently wrong with a one-off payment model. You do a job, you get paid for the job.
Hell, that's the way all creatives worked for the overwhelming majority of human history. You're an artist, you get someone to pay you to paint a portrait. You don't charge every person who looks at that portrait. If you're a musician you get paid for your performance or to write a new song for a client.
If they don't feel they are getting paid enough for the work because they are used to the re
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Royalty payments came about because writers wanted better compensation and the networks responded by forcing them to share in the risk to get the raise. There's nothing wrong with one off payments but we've been away for so long, the bigger up front payments are smaller than they look and people are accepting a bad deal
Re:So Sad (Score:5, Informative)
The reason for that piece of the contract is to allow a lower up-front rate. It's not both/and. It's sharing in the risk with the studio and distributor for the chance of a higher payout.
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The problem is there is to much content but none of it in one place. The old cable model solved the one place problem. The market demand for content is probably better than met; but nobody can get enough of it anywhere. Maintaining 6 different subscriptions is far to much friction for most people. They won't bother.
Similarly people said they wanted al-a-cart but realistically not many people actually want that. If you want that Amazon video offers it. When was last time you "rented" something or bought di
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If a show is wildly successful, well, they may get a few more subscribers but more likely their users will just not cancel for another few months.
Especially with how much Netflix costs. Paramount+ and Friendly TV were low enough that I would keep forgetting to cancel. Netflix, on the other hand, I would remember simply due to cost,
Re:So Sad (Score:5, Insightful)
Residuals mean a lot for TV - it's what pays the bills and what gets the industry (producers, directors, writers, actors, etc) taking on work.
Streaming services have residuals as well - they own the content, and they can license that content out to other services, or even go and syndicate the show.
Netflix, among others can syndicate some of their more popular shows out - perhaps a cable station might want to carry Stranger Things, paying Netflix money for each episode they air, which is where the residuals come from.
Or Netflix could put the show on DVDs and have revenue coming in that way.
There's a long tail to TV shows and movies - it's content the studios ensure isn't "locked up" because it's often licensed or syndicated to be aired.
Movies have a long tail after theatrical release. After that you have digital streaming, the physical release, then streaming in general, then cable TV stations, then free to air stations. The whole process can take several years, so long after the movie left theatres, money is still coming in for it.
Even TV shows go the syndicated route - many popular shows are still viewable on free to air TV years after they were cancelled.
Why should Netflix just make a TV series and sit on it? Why aren't they marketing that content elsewhere, like regular TV?
HBO traditionally does this - their shows end up on physical media and often get syndicated a couple of years afterwards to earn more money from those who don't want to subscribe. And it makes everyone happy because like I said, residuals.
Re:So Sad, Sustainability (Score:5, Interesting)
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That's the problem. What is the "success of the product"? If you're operating in a strictly dollars and sense mode, you only have a couple of available sources.
- The number of people who subscribed specifically to watch that show (perhaps derived by the number of people who bought a month, binged, and didn't renew)
- The number of people who were stopped from canceling their subscriptions because the show came out. (almost impossible to derive)
- Advertising ads delivered (if the site is serving that content
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"Raw number of views is actually a completely useless statistic "
Clearly, people subscribe to Netflix for the shows they don't watch.
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Creative productions seem to work on an ebb and flow model. They don't keep everybody employed all the time. This seems true regardless of the type of media. Games and movies seem to be very similar this way. Most software engineers don't seem to go through the same waves, the vast majority of them have regular salaried positions and only a small percentage are contractors.
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Most industries work with their creators working by the job or by the hour.
I suspect the AI systems will be able to write a TV script pretty soon. The actors will be able to interpret the script to keep it interesting until they are replaced by Deep Fake all CGI "actors."
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"The software industry has survived largely without creators being compensated based on the success of the product"
The term you are pretending doesn't exist is "restricted stock unit".
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The difference is that the pay rates are calculated differently for those industries. Basically, the residuals have long been considered part of their compensation in the entertainment industries, so the up-front pay is lower. Now the residuals are being cut out, but the up-front pay isn't being increased - and the studios are instead just keeping all that extra cash for themselves.
Think of it this way: The residuals are part of the benefits package. You take a lower-paying job because the benefits package
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I guess I just assumed that all show creators either A) made sure their contracts were set up like "we get a fixed amount, plus x% of the revenue from the show" with legal definitions of applicable revenue or B) made the show "for hire" and just got what the contract said they got.
I mean if I was making a show for Netflix, I'd probably say "I want $X per episode, plus 10% of the view-hour-weighted average revenue for the show. That is, something guaranteed to cover cost, plus a clause to get a bonus for hug
Re: So Sad (Score:2)
And exactly what would that accomplish? Netflix doesn't necessarily make money on hours watched. For a non-ad supported platform, the only thing they make money on is the subscriptions. And those are flat rate regardless of what it how much people watch.
With broadcast and cable TV, the model was the more people watching the more they could charge for the ads. Thus, popular shows made more money because more people watched and the ad revenue was greater. That doesn't translate to a flat rate subscription mod
Re:So Sad (Score:4, Insightful)
"I want $X per episode, plus 10% of the view-hour-weighted average revenue for the show.
Why is this difficult?
It's partly because of the above, but Netflix absolutely refuses access to stats on individual shows. They treat it as a trade secret and an NDA isn't enough because it affects future negotiations with the same people.
Right now, they're big enough to just walk away from a deal something like that is demanded.
When Netflix first started throwing around cash, they were offering more up-front than anyone else. They still are. It's just that you don't earn another dime after that and those dimes would have added up to more than you were paid up front. The way to win a better contract is to be willing to shop a show around to other streaming services. If an idea is good, some company will be smart enough to offer the higher dollar amount. On the other hand, it probably means that we're on our way to streaming services having more "safe bet" shows and movies like what's currently in theaters. Just remakes and re-releases and licensing popular IP.
We're making a bit of a return to the 1920s of cinema and Netflix writes the contracts and owns the cinemas.
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Ah I didn't realize they were that opaque...so what is wrong with having to shop your show around to other providers?
At the end of the day, there is no obligation for anyone to publish the show, so isn't this "the market at work"? If people really want to publish their shows, won't "nature find a way", regardless of the annoying entrenched companies?
Note I'm not trying to defend anticompetitive practices - I'm trying to be a voice for "don't be so defeatist - if there's an opportunity, maybe risk something
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Everything you said is right. That's going to be the new normal going forward. It does hinder the chance of creating big great new shows because the negotiation also often includes budget per episode and not just payment to the creators.
I'd say Netflix is ripe to tap into the indie filmmaker circuit a bit more. Doing more with less compared with entrenched players. It will bring down pay a little bit overall, but it will also widen the market a bit.
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I don't think there's a better way to determine an individual's unique causal contribution to a show's success than the market. (And I do see a legal strike as a valid part of that determination).
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And from what I understand this guy "created" it but wasn't nearly as involved in the actual production of the series. Well, that's a pretty darn important part of the process. Perhaps MORE important. Ideas are great. Execution is key. The best plot in the world can be ruined by crappy production.
Night Agent was pretty good. I binged it. Not great though. Some cheesy
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It is passed along, just not directly. If a show is popular, they are going to want a second and third season and THAT is when you have negotiating power to get the big bucks. The Duffer brothers are not crying about not getting enough money from Netflix.
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It's only unsustainable because too many people have their hands out, and nobody at the top is willing to take a pay cut.
The issue (Score:2)
Transferring media over the network costs the platform money; without viewing related advertising, the only money earned is money the show might draw if it creates new subscribers and/or renewals.
The problem here, it seems to me, is that the popularity of the show is, or can be characterized as, significantly disconnected from money earned due to the num
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It means the people who signed a contract to do some work get paid what they agreed to.
I'm sure this guy has now reached the level of fame where his next contract will have a bigger paycheque and royalties. For maximum payout he'll have to get lucky more than once, but I'm sure he'll still be able to make a comfortable living churning out a crappy cop show every five or ten years.
Not broken, now like most other careers (Score:3, Interesting)
By "broken" they mean they're not making enough money?
It's not even that - it is that the producers are not making more money instantly from some work they just did that was unexpectedly successful. Instead, like most of us, they will have to establish a reputation based on sustained high-quality work that will lead to more demand for their services and so higher pay.
If anything I would expect this to improve the quality of shows over time because now a great producer can't just make one hit and retire on the winnings, they will need to keep producing good
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I'm not crying any tears because these guys aren't becoming rich, but I do think it's worth considering that their employment isn't steady. If they only get a paycheck, and they are unemployed between shows, then maybe it's not ultimately going to be a good deal, let alone a great one.
If Netflix execs are walking off with big salaries and the people responsible for actually creating the shows aren't, that's not unusual, but it's still a shame. But I am not up on who's making what.
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They cancel so many shows though, I'm not watching a damn thing until it's got at least 4 seasons.