(2023-07-31) Streaming Services Arent Hiding Hits They Are Hiding Bombs

Streaming Services Aren’t Hiding Hits. They Are Hiding Bombs. Companies are spending a lot of money on shows people aren’t watching.

The second season of Wednesday is going to be very expensive for Netflix. Jenna Ortega is negotiating a pay bump — likely pushing her north of $1 million an episode... All told, the cost could eclipse $20 million an episode, which would make Wednesday one of the most expensive shows on TV. MGM will do its best to manage the costs, but doesn’t care too much. That added expense is passed on to Netflix, which licenses the show. Netflix will try to bring the cost down, but it is going to pay what’s needed to get a second season. Do you know why? Because it’s a hit — and everyone knows it. Netflix says Wednesday is the company’s most-watched English-language original series ever.

There is just one problem: This isn’t true.

The people who make these hits get paid. The creators of Friends, The Office and South Park are making more money now than when shows were first on the air.

Consider the hundreds of new shows produced each year that never appear on any top 10 lists. And yet, streaming services treat these shows like they are hits.

That has distorted the market, as producer Jason Blum has long argued. It convinced a lot of people that their shows were more popular than they really were.

More importantly, this means that companies are spending a lot of money on shows people aren’t watching. Wall Street encouraged them to do so. These companies are now all changing their approach, becoming more cautious about their spending. That’s bad for the creative class.

Cutting back on spending isn’t enough and streaming alone isn’t enough

Media companies can’t rely on streaming to replace all the money they made from cable TV and movie theaters. They need to find other sources of revenue.