The Business of Too Much TV | Hacker News Reader

The Business of Too Much TV

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42 pointspmcpinto15 comments

The OP has the wrong perspective on profits. You have to look at the personal relationships behind the numbers. Actors are indeed getting paid much much more than in the past, but that doesn't make productions any less profitable. It's that those profits aren't going where the used to.

Hollywood acting talent has moved behind the camera. Those owning and producing content have far tighter personal relationships with those on camera. They are married. The are each other's kids. That's what happens after a couple generations in a business where workers age-out of on-screen work very quickly. The days of studios treating actors like commodities are over. If a production turns zero profits, but everyone walks away with a big paycheck, that's a good day for those involved. The wishes of the stockholders are way far away. (See Goodfellas, a "not profitable" production on paper.)

Remember that game "seven degrees of kevin Bacon"? It wasn't a joke. Every wonder why the same actors end up working together year after year? Throw directors, producers and studio execs into the mix and you diagram extended families, or at least groups of tight friends, moving through the industry.

> talent has moved behind the camera. Those owning and producing content have far tighter personal relationships with those on camera

Do they also have strong relationships with distribution? The article suggests that studios are losing distribution power to streaming networks who completely own content after production.

> you diagram extended families, or at least groups of tight friends, moving through the industry

In these network diagrams, do clusters of family/friends bypass agents during negotiations?

I don't think it extends to distribution. That's a corporate thing for publicly-traded companies. The personal relationships I describe are local. The people on the set or in the meetings all know each other and work for each other. Distribution is handled by thousands of people spread around the world who never meet the people in production. Streaming is just another form of distribution. I doesn't touch the personal relationships that underpin production.

As for agents, sometimes they are just a tax dodge. The ultra-rich are always worried about moving money between generations without taxation. Calling your kid, your nephew, your agent allows you to move a chunk of money to the next gen without worry of estate taxes. It's part of estate planning. A similar tactic works with jobs such as personal assistants, trainers or "producers" whereby a slightly lesser rate is paid to a celeb in exchange for a child being hired on. That money comes into the 'family' at a lower tax rate and avoids estate tax.

Six degrees of kevin bacon is also just a great demonstration of how even a moderately dense network has very few edges between almost any two nodes. It's one of my favorite beginner programming challenges.

If you really want to get into network forensics, at least the people networks at FBI-types deal with, crawl IMDB and look for groups that never or rarely work together. In a TopGear interview Matt Damon (Borne franchise) was asked whether he ever talked to Tom Cruise (Mission Impossible franchise). His answer: "we go to different churches." He didn't mean standard religion. There are some groups who actively avoid each other. But look for links between the recent Batman and Mission Impossible franchises and you;ll see what I mean.

Producing TV shows today doesn't make financial sense.

In the 60s to 70s, the US had 3 networks (ABC, NBC, and CBS), few shows, low budgets even for hit shows (think of Gilligan's Island and Brady Brunch), and massively greater viewership than today[1]. And the average American viewer watched 4.5 hours of TV per day and knew the name of every prime time show on TV.

Today, every point above is reversed: hundreds of channels, hundreds of shows, something like one-tenth the viewership per show[1], and people watch much less TV.

To give one example of budgets, an entire episode of Star Trek cost about the same as just the voices on a Simpsons episode. (Star Trek cost $185,000 per episode, or $2.2M in today's dollars; the 6 main voices actors of The Simpsons were collectively getting $2.4M per episode but cut to $1.8M a couple years ago.)

The only conclusion is that TV in the 60s and 70s was obscenely profitable and TV today is a marginal or money-losing business and covertly subsidized by other parts of the company's business.

[1] The final episode of MASH had 125 million viewers. https://en.wikipedia.org/wiki/M*A*S*H_%28TV_series%29

The final episode of Breaking Bad had just 10 million. https://en.wikipedia.org/wiki/Breaking_Bad#Viewership

Yeah, but now people from all over the world watch American tv shows. For instance in France, americantv shows are huge. Everyone watches them. And I'm sure it's the same elsewhere. So maybe the market has actually grown for American tv show producers. And people watch them long past their airing period. I've seen a friends episode not too long ago on French tv actually.

We also have better market research today. Star Trek could have flopped and nobody would have noticed. Many scifi series did. Today's production companies have vast research departments who are actually very good at predicting outcomes. The risk is less, so funding for established organizations is easier and margins are smaller ... the basic economics of a mature industry.

As I said in another comment below, I would argue that funding TV shows today is the bad idea. Those producing them still earn lots of money for them and their friends. Production is still very lucrative. I just would not want to be an outsider investor.

Like all other forms of content and pretty much everything else in America, there's clearly an excess right now. This is mostly a pissing match between Netflix and Amazon and maybe Hulu in order to push their stock valuation, with the traditional networks trying to keep up. Last I checked, the population of the US is growing at a steady 0.8% per year, and people still have the same amount of free time as they did a few years ago, so there's not enough demand to justify this.

It's not just streaming but cable tv networks are doing it too. Not long ago, cable didn't produce its own scripted prime time content. Now every channel is in on it. They all want to be the next AMC.

Part of it was driven by growth in cable revenue. Customers are paying nearly 30 dollars a month that gets passed to cable stations.

I think another part of it was the assumption that netlix and Amazon will payout to get a license to your content later.

But really I think it's the collapse of the broadcast networks. It used to be everyone just watched whatever the big four had on. So now the wealth is being spread.

I believe it's also the case that ALL Television advertising (and most ads in general) are incredibly overvalued. Most Marketers already know they're blowing 50% of the budget, they just don't know where the waste is (hint: everywhere). Most large corporations run on high enough profit margins that they can do this, and people are happy constantly spending all of their extra income on consumer goods. I wonder what the future holds...

> ...TV today is a marginal or money-losing business and covertly subsidized by other parts of the company's business.

This is probably true, but I don't think it's permanently true. What we're seeing right now is a war between the old distribution networks and the new streaming networks. And the actors, show runners and tradesmen who produce TV are the weapons being used in that war. Just like it's great to be a defense contractor during an actual war, it's great to be in the business of producing TV during the period which will ultimately mark either the shift to online distribution, should Amazon, Netflix and Hulu win over customers, or the insurgency of online distribution should Cable survive. But one side will win and the gravy train will end.

What's interesting is that the premium services are likely to be okay no matter what. They've had to survive in a world where they've had to justify the cost of their programming for quite a while now. For them, this war will only determine how their programming is delivered to viewers so long as they hedge their bets and allow viewers to watch through both distribution channels. The only important thing for them is that their shows remain popular. That's why HBO has publicly said they don't mind people sharing passwords for their service...they can afford to leave money on the table right now so long as it means they'll still be relevant once the dust settles. As long as that happens, they can crack down then and ensure that everyone is paying.

However once a winner emerges, which I think most of us believe will be streaming, production will scale back and profits will increase. There is too much TV being produced right now and customers are forced to either miss shows that they'd otherwise like to watch or devote way too much of their lives to trying to keep on top of that. We could pull back by a factor of 2 and almost everyone would still be able to find plenty enough to be satisfied.

Many, many more people watched the final episode of Breaking Bad than just those who saw it during its original airing.

Does that include everyone who had purchased the season for streaming from Amazon? Everyone who watched it later on Netflix? Everyone who watched it through their cable company's on-demand feature?

Uhm... and the demand for advertising? What happened to it? And exports? What about them?

> Between 2009 and 2015, the number of scripted shows nearly doubled, from just over 200 to an estimated 409 last year

This is probably related to the "reality" TV fatigue. They milked that cow to death. Gimmick after gimmick.

Anyway, I personally would love to see more well scripted shows.

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