Stream Away

“Everything became big tech — the Amazon model of ‘We don’t actually have to make money; we just have to show shareholder growth.’ Everyone said, ‘Great. That seems like the thing to do.’ Which essentially was like, ‘Let’s all commit ritual suicide. Let’s take one of the truly successful money-printing inventions in the history of the modern world — which was the carriage system with cable television — and let’s just end it and reinvent ourselves as tech companies, where we pour billions down the drain in pursuit of a return that is completely speculative, still, this many years into it.’”

Our friends at Vulture have been examining the state of streaming TV. and reading their conclusions you not only have to wonder if the Emperor is wearing clothes, but if the empire even exists beyond a bunch of IOUs piled up inside a big old vault.

Surely I wasn’t alone in thinking that there were far too many streaming services for them all to be profitable. The success of Netflix inspired imitators, like Hulu and Apple and Peacock and Discovery+ and Acorn and PBS+ and Prime and Disney+ and Crunchyroll and Tubi and Britbox and HBO+/HBO Max/MAX, or whatever they’re calling themselves this week. All these services, all spending billions of dollars to attract the same viewers . . . I figured there would be blood on the boardroom floor ere long, and then they would all consolidate down to a small, manageable number. Maybe.

Is anyone making money?

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.

So who is getting rich off hits like The Night Agent? Not streaming services, no matter how many global viewing hours they accumulate. Many streamers have spent themselves into billions of dollars of debt building their content libraries, and subscription fees haven’t grown fast enough to close the gap. If platforms like Netflix make any money at all, it is only a fraction of what entertainment companies used to make back when more than 105 million U.S. households spent an average of $75 per month on cable.

. . . Over the past decade, Hollywood completely reorganized itself around the digital model, as once-mighty networks and studios turned themselves into apps and abandoned reliable income streams hoping larger ones would materialize. They tripled their output, overpaid Oscar winners to debase themselves in miniseries, and hired all of your friends to work in writers’ rooms. Viewers across every niche and taste cluster were inundated with more bespoke programming than they could ever realistically consume.

We knew it couldn’t last, and it didn’t. Amid much lip service to fiscal responsibility, streamers have signaled plans to make fewer shows — a dramatic shift considering that the number of original scripted series had exploded from 210 in 2009 to 599 in 2022. 

And once the networks’ lack of profitability became apparent, and stock prices crashed, what happened?

HBO Max, Disney+, Paramount+, and Hulu purged entire series from their libraries for the tax savings. Some slashed shows that had already wrapped production on full, unaired seasons; Nasim Pedrad’s Chad got pulled just hours before its premiere. Not even projects with big names were safe. In June 2022, HBO nixed J. J. Abrams’s $200 million sci-fi drama Demimonde even though it had been in development for four years and had just cast its lead actor. “The Demimonde thing shook everybody up,” says one showrunner. “If HBO can say ‘no’ to J. J. Abrams, they could say ‘no’ to anybody.”

And the writers? As the number of series ballooned, so did the number of writing jobs, allowing more people than ever, from a wider range of backgrounds and experiences, to partake in the great American fantasy of making TV. As other creative industries disintegrated, Hollywood promised not just an escape hatch but a ladder to career advancement, as former nobodies like Severance creator Dan Erickson saw their pilot scripts pulled from slush piles and given full-season orders. Novelists and playwrights descended on L.A., and there were so many writers’ rooms to fill that a few shows even hired (God help them) journalists.

But again, where’s the money? Under the old TV model, if a show was a success, its creator stood to get rich on the back-end profits. With all of linear TV’s revenue streams combined (ads plus syndication plus overseas rights), a studio might bring in $3 for every $1 in costs on a hit. The problem for writers was that most shows flopped, so there was no back end to get a piece of. Streamers offered something different. Their model, called “cost plus,” might pay $1.30 to $1.50 up front, making every show a winner — just not a very big one.

To make up for the lost back end, streamers floated performance-based incentives. Schur describes a scenario in which a platform might promise a showrunner a $100,000 bonus for season one, $250,000 for season two, $500,000 for season three, and $1.7 million for season four. “So you’re like, Holy shit. This is great!” he says. There was a catch. Many seemingly successful series began to vanish after just a couple of seasons. “What no one saw coming was they’d just kill the show before they ever had to pay that money out,” Schur says. “They kind of tricked everybody. Now if you get to 20 episodes, it’s a miracle.”

And the current Writers’ Guild strike? “The Writers Guild, delusionally, is harkening back to a day when there were 25 episodes of Nash Bridges a year and repeats and residuals. Back-end payments existed because Europeans were willing to watch our garbage, and Americans were willing to watch repeats of that garbage on cable at 11 at night. The real issue is that the medium changed. Instead of getting a job as a staff writer on CSI: Miami for 46 weeks a year, now it’s a 25-week job working on Wednesday, which is a better show. That’s just progress.”

But this so-called progress may have long-term consequences. Fewer weeks of employment mean that many entry-level writers are not receiving the training they need to advance through the ranks. Staff writers are now rarely invited to sets or editing rooms to learn the skills that would someday help them create their own series.

There’s a lot more in the article in the way of depressing news, plus an interesting new party game called “Is It a Show?”, which I recommend to you all.

And honestly, what I really recommend is that you turn off the streamer and sit down with a good book.