Don’t Cancel Me, Bro
From HBO to Netflix, streamers are quick to hit “cancel”
Happy New Year! We did some housekeeping last week, but we’re back with our first issue of 2023. For everyone who showed interest in wanting to hear more about content on streaming in our poll a few weeks ago, keep your eyes peeled for a new content analysis newsletter coming soon 👀. Now, let’s get to business.
Next week, the man, the myth, the legend, Michael Dorn, returns to reprise his role as the Klingon, Worf, once more in Star Trek: Picard, Season 3. When Paramount revamped Star Trek via the Discovery series, it changed the physical design of the Klingons, much to the chagrin of fans everywhere. Since then, Klingons have been mysteriously absent from any new live-action Trek seasons. The return of Worf with the original Klingon design will be a welcome sight for many, and a great example of a media company listening to its ardent fans.
In this issue:
Are streaming services canceling popular series too quickly?
Top reasons shows are getting axed
Is this the new normal?
Don’t cancel me, bro!
Not too long ago, one of our biggest complaints about the streaming service market was too much content. The largest providers on the market—Amazon, Netflix, and Hulu—are now collectively spending $10 billion per year on original content. In 2022, Netflix hit a new milestone, with 50% of all of its US library content consisting of original series and movies.
Of course, the run-up in new content spending was during what we’d call “the good times,” i.e., pre-pandemic. Since then, the economy has been…let’s say…less than ideal. In the past few years, streaming services have been quick to hit cancel on pretty much any series that shows a hint of not driving enough new sign-ups, increasing user retention, or generating enough profit. Here’s a snapshot for you:
During the 2000-2001 TV season, ER was the top-rated scripted TV series. The series was in its 6th season at the time and went on run for 15 seasons before it got canceled.
During the 2010-2011 TV season, NCIS was the top-rated TV series. The series began in 2003, is still airing, and is currently slated for a 20th season.
During the 2021-2022 TV season, Yellowstone took the crown for the highest-rated TV series. The series was originally released in 2018 and was on its 4th season at the time. It’s now slated for a 5th season in 2023.
Now, these are mere snapshots, but there’s a trend here. Most of the top-rated shows in any given year are not on their first season. And in the past, most of the top-rated shows have been long-run series that went on to continue airing for even more seasons. It’s simple: Viewers like to commit to a good series, and most of the series that ultimately win long-term viewers take time to mature and come into their own. Even into 2022, the most-viewed series are those that have had that time to grow.
Streaming services may be treating new content much like the fast fashion trend. These series are built to last for a few seasons and then get ditched just as fast at the hint of being unfashionable.
Why can’t they just commit?
We could say there are numerous, multidimensional reasons why streaming service providers are dining and dashing on new content. But let’s face it: it’s all about the money.
By and large, Netflix is the only major streaming provider making a profit right now. Warner Bros. Discovery, the current king of cancel culture, has had declining profits every year since 2019. Disney+ isn’t projected to turn a profit until 2024. Even Amazon’s Prime Video is a financial loser, although the company probably treats it as a loss leader since its service is part of a packaged Prime account bundle in the US.
Warner Bros. Discovery’s CFO, Gunnar Wiedenfels, put words to the worries in the most succinct way possible: “We got a lot of public noise about some of the content write-offs that we took, which is a reflection of an industry that went overboard and that went on a spending frenzy.”
Of course that could just be an HBO Max problem. For its part, Amazon made a conscious effort to throw shade in a recent tweet:
To begin 2023, we’re proud to unveil the most effective restructuring in entertainment history. Vought++ is now Vought+ again! We’ve unbundled your favorite apps like VTV+ and VSPN+, and eliminated 35% of our films. All for the new low price of $119/month, plus! https://t.co/UhzWWQQgV8
— Vought International (@VoughtIntl)
Jan 4, 2023
But there you have it. Tax write-offs win the day. Streaming service providers spent too much, got too little for it, and are cutting content left and right.
Our takeaway: This may be the new normal
Streaming service providers appear to operate with significantly lower profit margins compared to traditional broadcast and cable TV services. Even Netflix, which is making a profit, is conscious of the fact that the longer a series runs, the more money it would need to commit to paying actors. The company likely cuts its series short in order to avoid ballooning costs.
This is likely why many industry veterans strongly dislike this new norm. It appears that actors and others are simply getting paid less in this new environment. Could that change? Maybe. But it’s not likely. The slow death of the long-run TV series may be upon us. And that, friends, is worthy of a few tears.
How did you feel about this issue of the Stream Report?
The Drop, uh, well, drops a baby, and onto Hulu this Friday, Jan. 13th.
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Netflix releases a plethora of titles including Trial By Fire and Dog Gone, this Friday, Jan. 13th.
Back with its second season, Hunters premieres on Amazon Prime Video, Friday, Jan. 13th.
The highly acclaimed video game adaptation, The Last of Us, zombie crawls onto HBO and HBO Max, Sunday, Jan. 15th.
Jeremy Renner stars in season 2 of Paramount+ exclusive, Mayor of Kingstown, streaming Sunday, Jan. 15th.
Stream the newest Anne Rice adaptation Mayfair Witches on AMC or AMC+ with SlingTV. Episode 2 drops Sunday, Jan. 15th.
A new iteration of Night Court serves up some evening justice on Peacock, streaming on Wednesday, Jan. 18th.
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