Hollywood breathed a collective sigh of relief when the writers’ strike was settled on 27 September, but it was a symptom, rather than a cure. The disease was called “streaming”, and it remains endemic to the financial model imposed by the Netflix revolution that birthed the era of Peak TV. Streaming promised entertainment for every taste, every minute – whatever we wanted, whenever we wanted it. Revolutions, however, have a habit of consuming their own. It didn’t take long for this one to do the same.
There’s a reason why the twin writers’ and actors’ walkouts were called “the Netflix strikes”. Netflix upended the industry business model, which was structured so creatives shared the “back-end” income generated every time their shows were aired as they worked their way down from theatrical releases or broadcast TV premieres through “long-tail” syndication to ancillary markets. Netflix’s streaming model had no use for these markets, and consequently, creatives received no more than a one-off “front-end” payment. Actors such as Aaron Paul, co-star of Breaking Bad, complained they received nothing when their shows are aired on Netflix.
Creatives grumbled that streamers were opaque, making it impossible to know how much their shows are watched, and how valuable they are in the marketplace. As the director Steven Soderbergh told me, referring to Elizabeth Holmes’s dubious medical company, “Netflix may end up being the Theranos of the entertainment industry. It moved us, in economic terms, out of a Newtonian world and into a quantum world where it becomes very difficult to quantify whether or not it is ‘worth’ making something.”
The disappearance of back-end income wasn’t the streaming revolution’s only casualty. The length of traditional TV seasons was radically downsized from 22-odd episodes, to ten or fewer: this meant that the duration and size of Hollywood writers’ rooms were scaled back, further shrinking their pay cheques. The issue of the use of AI to write scripts raised its ugly head, and creators bemoaned the loss of “trust” between them and their employers. But as one industry veteran told me, “When was there trust? When were those good old days, when we had kumbaya moments? We negotiated terms agreement, and then the studios find a way around them. That’s what businesses do.”
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When Netflix was the new kid on the block, it enjoyed an adolescent growth spurt that roughly lasted from 2010 to 2020. Wall Street prized the company for its exponentially increasing subscriber numbers rather than its profits (if there were any). It was hailed as the future. In 2017, Netflix’s founder and CEO Reed Hastings boasted that his only competition was sleep. When studios began releasing features to streaming services and theatres simultaneously, it seemed that the industry was turning its back on exhibition. The streaming stampede weakened Netflix. Hastings awoke one morning to discover that it wasn’t sleep he had to fear so much as a blizzard of other streamers, imitators such as Disney Plus, Amazon Prime Video and Warner Brothers Discovery. The Netflix honeymoon came to an abrupt halt in 2022, when it predicted it would add two million users, but in fact lost 200,000 in that year’s first quarter. Its stock fell 35 per cent, erasing $54bn of the company’s value in one day, and then another 35 per cent over the course of the next six months. Its rainbow target of a billion subscribers was downgraded. Moreover, it still had that $14.5bn debt. Hastings, not known for pessimism, was quoted as saying, “It’s a bitch.” He was right.
Netflix wasn’t the only company in trouble. In the US, viewer numbers for ABC, CBS, NBC and Fox – the “linear” networks that offer “appointment viewing” (airing shows at fixed times) were shrinking – while cable companies such as Paramount were facing troubled futures, even if cable was still profitable. Indeed, Disney was looking to move ESPN, its prized sports cable channel, to its streaming service, leading to a nasty dispute with its cable partner Charter Communications. Meanwhile, the UK responded to the streaming revolution with services such as All 4, BBC iPlayer, Britbox, Acorn and ITVX, as well as a spate of exceptional series such as Happy Valley, Peaky Blinders and Fleabag.
Back in the US, Big Tech – Apple, Amazon and ATT – invaded the entertainment space, looming over lesser players. The race to consolidate ushered in the era of mergers and acquisitions. As one source told me, “When no one’s making money, and they’re trying to figure out how to become profitable, what’s often proposed is to get bigger.” Companies such as Warner Brothers Discovery avoided the auction block by taking on mountains of debt, which in turn forced cutbacks, escalated by the strikes. Others put themselves, or parts of themselves, up for sale. (Rumours continue to circulate that Disney has put ABC, its linear network, on the block, or has even offered up the entire company to Apple). Meanwhile, instead of scaling back, the streamers owned by Big Tech threw money at new shows, because they could.
While an influx of investment can be an advantage, it can also be a trap. Netflix’s first prestige drama came when it acquired House of Cards in 2013, offering David Fincher an unheard-of two-season deal based on a pitch. This was candy to creatives, but a bitter pill for the platforms that couldn’t afford such largesse, which is anyway wasteful and can make for bad TV. As John Landgraf, who pioneered a new era of basic cable as head of FX with Justified and The Americans, explains, “If we’re going to go from a pitch to series, we’re going to make a lot of mediocre stuff. I try not to commit so much capital at any given moment, because whether it turns out good or not so good, it’s going on the air because you’ve committed so much money, and you’ve got to recoup as much of that investment however you can.” In other words, the business practices that made Netflix also risked unmaking it. The good news is that rising interest rates that make borrowing money more expensive, and/or a future recession, may slow the rate of consolidation, discouraging the big fish from swallowing the little fish.
When Wall Street changed its mind about streamers, and demanded profits as well as growth, it increased the pressure on expensive shows to make a return on investment, and streamers became more risk averse. Platforms that once defined themselves with the adventurous, off-network programming pioneered by HBO were so hungry for new subscribers that, in the words of the former Fox head David Nevins, they “were running for the mainstream”.
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Over- or under-spending on TV shows has a dramatic impact on their quality. And when innovation becomes a casualty of caution, many shows build risk-aversion into their narratives. The majority of Marvel heroes for example, never die: that is, die for good. Superheroes are valuable intellectual property, and with multiverses galore, if they die in one universe, they just pop up in another. These heroes can’t buy a pint of milk without ending up in another universe. If there’s no risk, actions have no consequences. The franchises of today don’t so much resemble novels – the template that defined the early Peak TV era, in which the actions of fully rounded characters do have consequences – as they do fairytales. So we have Amazon’s fatuous Rings of Power, a prequel to The Lord of the Rings, rather than HBO’s brilliant Game of Thrones.
Not even record-breaking blockbusters Oppenheimer and Barbie troubled thinking inside the industry. Studios and streamers are still playing it safe, sticking with the tattered franchises they see as the key to a box-office bounceback, lining up behind movies that feature established brands (such as Nike) and games. Barbie was applauded for its originality, but to Mattel, it is just another franchise. The company has around a dozen shows based on its toys in the pipeline.
Once upon a time, the difference between the disrupters and the disrupted was striking. When HBO was breaking with the sponsor-driven model, it shunned anyone redolent with the stink of network. In the 2000s, the show-runner Tom Fontana was almost booted off what turned out to be a hit series Oz because he had worked on network shows. Now, broad-appeal programming requires Netflix, and other streamers, to remake themselves in the networks’ image, raiding their executives not despite their network values, but because of their network values. When Amazon was looking for a new head of Prime Video in 2018, it didn’t turn to an indie outfit, but the networks, seizing on the former NBC head Jennifer Salke. The result is the mainstreaming of the streaming audience. The once-proud HBO is diluted with reality shows and network series such as the hoary The West Wing. Who would have imagined that the cabler that created The Sopranos would become the home of Friends?
Netflix has now inverted its business model, introducing an ad-supported tier at a fraction of the cost of its ad-free service, which allows sponsors to influence original programming much as they did at the networks – an arrangement that was once anathema to the streamers. But many of Netflix’s more recent hits, well-known shows from The Crown to Bridgerton, could have been produced by traditional networks. In fact, some of them were produced by a network. The former disrupter collected the old cast of the family-friendly That ‘70s Show to reboot it as That ‘90s Show; in 2016, it resurrected the wholesome series Gilmore Girls, still one of its most-viewed properties. Kenya Barris, who had left ABC for the freedom of Netflix in 2018, fled for Paramount in 2021, despite his multi-year deal, telling the Hollywood Reporter, “I want to do in-your-face shit… [but] Netflix wants down the middle.” He added, “Netflix became CBS.” The occasional “in-your-face” show such as the subversive Squid Game doesn’t change the fact that Netflix has become the home of the kind of bland programming that epitomises the undoing of streaming.
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Ironically, at the same time that the streamers are becoming more conventional, the networks may be getting fractionally less so. The former NBC executive Bob Greenblatt told me, “Every broadcaster is grappling with how to compete with the streaming experience when broadcast television with commercials is the last thing anybody wants to watch.” Abbott Elementary, which began life as a network show, “feels fresher than a lot of buzzy streaming comedies,” according to the New Yorker. David E Kelley has written for all three formats, network, cable and streamers: while the LA Times dismissed his Netflix show Anatomy of a Scandal as “paint by numbers”, his network show, the violent Big Sky for ABC, pushes the limits of network’s standards.
Regardless of the strikes, under the jaundiced eye of sponsors, the distinctions between streaming and network are crumbling. If current trends continue, Netflix, Apple Plus, Amazon Prime Video, Disney Plus and perhaps Max, will flourish, effectively monopolising – and limiting – our viewing choices in the same way that ABC, NBC, CBS and Fox did in the network era. That is, delivering anodyne programming designed to offend no one while reaching the largest possible audience. As the show-runner Matthew Weiner said, according to an executive I spoke to, “It’s like Mad Men never happened. All the stuff we did, never happened. We’re right back to where we were. Except there’s more of it.”
Peter Biskind’s “Pandora’s Box: The Greed, Lust, and Lies That Broke Television” is published by Allen Lane on 7 November.
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