Why Disney+, Paramount+, Max, and more are throwing dump shows left and right

That was the promise of the streaming age: you can have it all, you can have it everywhere, and you can have it all at once. Subscribe to our platform and you will have access to our huge library of ‘content’ forever, on demand, whenever you want. you want more? See, it’s in the plus sign at the end of the platform name. (Why did everyone do that?)

This utopian fantasy was in serious contrast to the old way of watching TV, where you would sit down to watch your show at the time it aired or wouldn’t watch it at all unless you were lucky enough to catch it in reruns. . Once your show is cancelled, you can’t watch it anymore. We have VHS recorders, and then TiVos, sure, and eventually you can buy a show on tape or DVD after it airs. But all of these require intent and planning, an action on the part of the prospective audience member. flow? That will be easy.

The utopian fantasy turned out to be a fantasy for a reason. In recent months, major studios have begun pulling content from their platforms, sometimes at bewildering speed. Paramount, for example, Recently announced He didn’t just reverse course and cancel it Grease: The Rise of the Pink Ladies Instead of the previously announced renewal, but the show — which ended on June 1 of this year — has been taken off the Paramount+ platform entirely, along with a host of other offerings. Disney + lost Y: The last man And willowamong others, and gave Warner Bros. Discovery westworldAnd generic + ionAnd The time traveler’s wife Booting into the relaunched Max platform.

You might very reasonably ask, why would anyone do this? If the show is on a hard drive somewhere, and it’s not harming anyone, what’s the harm in leaving it there? It’s probably not the most watched show on the service, but who cares?

Companies care, it turns out, especially about their balance sheets and their shareholders. Getting at the exact reasons why big entertainment studios like Disney and Warner Bros. Discovery doing anything at all is a bit like trying to ascertain the secrets of the universe: you know they’re out there, but no one will ever give you a straight line. It’s a work that runs on smoke, mirrors, secrecy, deception, and a kind of unbalanced magic.

Regardless, we can discover some of the reasons giant companies may want to take, for example, FBoy Island from their digital platform. They’re not ideological reasons, unless you factor in the simple fact that Hollywood’s only ideology (circa 2023, anyway) is profit margins. Content content, so to speak, does not matter to executives. It’s all about belt tension.

Studios have their reasons

The first way removing an offer from a platform saves money is related to some of the reasons why WGA is attractive and SAG-AFTRA is considering that: residuals. Production companies pay members of various unions (such as the WGA) a fixed percentage each year if their show is available on a streaming platform. The exact rate is calculated in a byzantine manner and renegotiated every three years by the unions, and can range from a pittance to a livable income, depending on the deal struck for that offer. But it’s a cost to the company, and if they remove the supply entirely, the cost is eliminated.

However, more often than not, offers removed from the platform don’t disappear completely. In case westworldFor example, Warner Bros. Discovery removed the show from its platform (now called Max) but licensed it to free, ad-supported channels operated by Roku and Tubi. This means that you can actually watch westworld Now, completely free of charge, as long as you’re willing to run a few ads — and that means Warner Bros. Discovery start making some money from westworld once again.

What you can’t necessarily do is watch it literally anytime you want. These free channels, called FAST (for free ad-supported TV), operate on a linear model, which is basically the same way cable TV does. You flip through the channels and watch whatever is “on TV” right now. What makes FAST different from traditional cable or network TV is that it’s distributed over the Internet, so you can watch it on your laptop, device, or smart TV, instead of on cable or airwave.

But wait, you might ask: Shouldn’t Warner Bros. Discovery will now pay the remainder to everyone who participates westworld? Yes, it is – but the residual rates for FAST are currently lower than the rates for SVOD on streaming platforms, which in turn are much lower than the rates for broadcast television such as network or cable. In addition, Warner Bros. is getting. Discovery is on the money from Roku and Tubi — that’s what it means to “license” your show. So there’s less income and inflow, and that’s a net positive on the balance sheet.

Speaking of balance sheets, there is another reason why this happens. For companies like Disney, Paramount, and Warner Bros. Discovery, every show on their platform is an asset. If an asset depreciates more quickly than expected, you can “write down” its value, which means that it is now worth less; It ultimately leads to a loss on your balance sheet, which translates into a tax deduction. If you remove an offer from your platform, it is now “weak” in terms of gaining traction, and is therefore worth even less. It’s all very complicated, but the companies seem very eager to incur write-downs, perhaps in part to show their shareholders that they’re serious about getting their financial houses in order. (This is key for companies like this, which after years of relentless, profligate spending on content are feeling pressure to populate their platforms — especially during a pandemic.) Disneyfor example, announced that it would incur a whopping $1.5-1.8 billion drop fee from removing content from its platforms, which translates to a very large writedown and a lower tax burden.

I’ve explained each of these factors in an oversimplified way, but you can see a pattern here. Executives think it’s time to pump the brakes. We’re emerging from an era where entertainment companies throw money at projects without seeming to fully understand that a $10 subscription fee isn’t going to pay for all this and that consumers have a limited appetite (and wallet) for streaming. Subscriptions. Contributors want answers. Companies are responding.

Unfortunately, this means some of us lose easy access to shows we love or, at least, are meant to get around to watching one day. The good news is that they will likely still be accessible, at least via FAST. It’s not comfortable, it’s kind of annoying, and I think it might make more than a few streamers decide this whole thing just isn’t worth it. But the entertainment business has entered its most chaotic era, and this is just one more show of it.

At least you don’t have to learn how to tune your VCR.