This past week at an expensive coffee shop in Brentwood, I sat down over iced tea with two longtime Hollywood negotiators to talk about the crazy business of Hollywood, among 20 different tectonic shifts that are transforming everything.
Dealmaker One suddenly said that the two should put together a fund to buy streaming shows that have been on the market for more than two or three years. After all, he said, most show that the “old” is essentially dead, lost in the algorithm, invisible to most customers when they page through a service’s interface. Yes, old shows can be found if you’re really looking, but otherwise they’re out of sight, out of mind. So is sitting in a vault in Santa Clarita.
Dealmaker Two was quick to point out that the fund might only need $500 million to raise it all. After all, “old” shows are worthless to a streaming service when the algorithm forgets them. Someone new, or maybe the original creators, could bring back the shows and sell them to TV networks in Rwanda and Malaysia, or as an NFT in a virtual reality theater, or build a FAST channel, or really, whatever. At least the shows would have a chance to reach a different audience, and make money in a different way.
They were both joking, I think, but their observation is astute. In the age of streaming, when access to content is bottomless, how much content is enough? How long is that tail? And what do we do with the slightly older stuff that no one is looking for or seeing?
Amazon spent more than $8 billion last year to acquire MGM’s library of stories. But apart from the James Bond franchise, the real value wasn’t in showing those things on Prime Video or Freevee. Instead, executives enthused, the deal was about the spin-offs, sequels and reboots the company will create from that huge pile of intellectual property.
Lionsgate, on the other hand, is once again trying to sell itself by touting its library of movies and TV series spanning decades. It has not yet found a recipient. At least the company seems close to recovering from its ill-fated decision to buy premium channel Starz for $4.4 billion in 2016, selling at least part of it to some Next Greater Fools.
Apple could, of course, pick up Lionsgate, which is said to have looked closely at MGM, to flesh out Apple TV Plus. He didn’t worry, and yet they found/made original projects that won an Oscar for Best Picture and an Emmy for Best Comedy last year. We don’t know yet what Apple’s success with TV Plus is, but spending billions on new things alone seems fine.
Meanwhile. Billions of dollars worth of content is available on every streaming service, with no significant audience or apparent afterlife. It could be headed yet further into oblivion as Netflix, HBO Max and Disney cancel projects and signal more “discipline” in their programming choices.
Disney Plus had nearly 100 million subscribers in its first year, thanks to its impressive collection of vintage Disney and Pixar animation, Star Wars projects, and films spanning the interconnected double dodecahedron of the Marvel Cinematic Universe. But everyone who was binge-watching those shows during the lockdown probably did by now. What’s next? A little less of these shows and more adult-friendly new stuff to appeal to a wider audience, Bob Chape has decided.
On Netflix, of course, only a handful of shows avoid quickly sinking into the Great Red Sargasso Sea of Stuff. The company itself recognizes this with its almost-last-year policy of ending series after three seasons.
Sometimes death comes even faster. This week, First Kill , the high school vampire series that attracted more than 100 million viewing hours in its first 28 days this summer, failed to produce adequate secondary measures. Netflix renamed First Season Kill and canceled it.
Only a few stalwart franchises get a fourth season, like the record-breaking Stranger Things or, believe it or not, the ground-breaking Virgin River reverend… Everything else seems to quickly fall through the algorithmic cracks in the Netflix equivalent of Stranger Things’ Upside. Down.
But the question of how long a show should last is a pressing one in Streaming Land. Warner Bros. In the wake of Discovery’s earnings this week, the company announced that it’s not only merging its two flagship streaming services, but also making them thinner.
With synergy seeker David Zaslav, WBD seems determined to eliminate any vestige of the previous regime’s handiwork, including plans to make 10 live-action HBO Max films a year. The company canceled two nearly completed HBO Max movies, including Batgirl, to take advantage of a briefly available tax break. It was then revealed that WBD had also quietly defenestrated several other HBO Max features and series, including projects from Robert Zemeckis, Melissa McCarthy, Doug Liman, Seth Rogen and (twice!) Anne Hathaway.
The reasoning: It costs more to keep underperforming shows alive and online, paying out contract provisions, than mothballing them. It must be a bitter pill for Hollywood creatives who did business with streamers, but now they have to wonder if a fat but limited upfront paycheck is even for those near the top of their craft. It’s piecemeal work, cost plus 15%, like awarding a widget contract for the Department of Defense.
Maybe it’s time for some new deal provisions that recognize the longevity of many streaming projects.
Creators working for broadcasters have already given up much of the good back-end that came with a Hollywood deal. You did a series first, and if you got enough episodes on broadcast or cable outlets in the US, you had an asset that you could sell to other parts of the world, or in syndication, for a lot of money. That lottery ticket is now mostly gone.
And among filmmakers, even a low-budget indie film can get production financing, and possibly a big profit, by selling in dozens of overseas territories. There are projects (including some of my two dealmakers) that still do that, but fewer of them have that option in an age where most streaming deals buy distribution rights in perpetuity.
Maybe we need an expiration date on all those global and forever agreements. Perhaps the film business can once again take a page from the music industry, where some artists have regained control of their masters from labels 35 years after the original recording, thanks to a 1978 US copyright law.
That’s too long a window for the streaming video business, where few shows have the enduring appeal of Louis Armstrong, Frank Sinatra, Elvis Presley, Bob Dylan, The Beatles, The Grateful Dead, Fleetwood Mac, U2, Radiohead or Taylor Swift.
Swift, of course, didn’t wait 35 years to get her masters back after getting upset over the way the rights to her early hit albums were sold to a new label. Swift began recording new versions of those albums, ordering her rabid fans to only buy and listen to the new versions.
It’s hard to imagine, say, Robert Zemeckis calling his fans to watch just one version of the HBO Max remake of The Witches.
But as streaming services continue to adjust their programming, spending, ambitions and expectations, we need to figure out a different way to handle older shows that weren’t huge hits. Free the orphans! Clear the shelves! Unlock the algorithm!
Daniel Frankel is the managing editor of Next TV, a vertical internet publication focused on the video streaming business. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked with the staff at E! Online, Electronic Media, Mediaweek, Variety, PaidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!
Daniel Frankel is the managing editor of Next TV, a vertical internet publication focused on the video streaming business. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked with the staff at E! Online, Electronic Media, Mediaweek, Variety, PaidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!
