THREAD: Okay we HAVE to talk streaming numbers reporting because it seems like every few weeks I see some insane number floating out there and it's like "every show we have was as big as the MASH finale!"

The problem is these numbers are both meaningless and damaging.

First of all they're only counting the first two minutes of any watch which could mean literally 12 people watched this show and millions were like "oh god no" and turned it off. We don't know the difference because they're not telling us.

Which brings us to the bigger problem.

Which is that they have virtually no reason to tell us what the real numbers are. They can juke the stats internally and tell people who work on their shows the numbers are low if it behooves them (like contract incentives). Or publicly say they are high if it behooves them.

Now why would they want to do either?

A lot of it has to do with backend.

In TV and in particular movies a lot of the above the line talent gets backend points which basically amounts to shares of profits. People think of this as only relating to box office, but the real story of Hollywood finance is in long-term sales.

A TV show has ad rev or goes into syndication - a movie will get its rights sold across the world and air constantly and every time it does, it makes money and goes toward the studio profit along with back-end.

Often this is small. If you have actor friends it's always funny when they get a check and are like "oh sweet 9 cents for that time I had a bit part for CSI!" But the thing I want to impart is that that money adds up.

And it adds up to the point that it is the MAJOR source for studios financial ability to whether the ups and downs of a given box-office year. Because it's how they get consistent cash.

No one is talking about how JAWS is still making money (and in the blu ray year, it was A LOT of money). Just as no one was realizing 4 JILLS IN A JEEP (1944) is still making money. And these libraries are HUGE.

There are thousands and thousands and thousands and thousands of bits of media out there that are still being show and making money. And it's A LOT of money.

Good for studios, right? Of course.

But the unions realized that a long time ago and fought so that movies / shows also has back-end points that go into the union. I cannot overstate how critical this money is to their function.

It goes right to health plans, protections, workman comp, general funds, and in short, it makes a film's success a success for everyone.

But now here's where we get to the streaming of all of it.

In streaming, there is no back-end. Netflix is not selling your show a hundred times over. It's not putting the movie in theaters. It doesn't have to do ANY of those things. It's producing a work they solely own and exhibit forever. A closed loop.

Now, this is obviously a problem for hollywood's top talent, so what it means is that prospective back-end gets negotiated up front and put into their fee (hope you have a good agent!).

But the real ones suffering are the unions and smaller artists, especially ones who make sudden runaway "millions of people watching" shows. Without any backend, they're not seeing any financial part of the success they created.

Which brings us to the age old wisdom of "that's fine, you get to renegotiate your new higher salary next time when the contracts up!"

Only the streamers, particularly netflix, aren't doing that.

They're cancelling hit and even modest hit shows the second new contract negotiations come up. Some of this has to do with their creative philosophy (or the lack), but they're moving onto other cheaper artists / whatever fresh new thing.

Likewise, you can have a show that's actually a modest hit and when contract negotiations come up they can say "sorry, four people watched your show" and then underpay you even if work is actually doing really well for them.

And for the big guns, it means they make up the viewer stats and can say 2 billion people watched a show and by the time they have to "pay" the artists for those 2 billion eyeballs, they're not going to.

Sure, the people at the very top will be "fine," but they're also buying into their own shelf-life and diminishing the overall ability for almost all other artists to join in profit sharing (again, the no union backend is the real killer).

Point is this: the nielsens were a wonky system for a million reasons I don't have time to get into (I mean, the studios were the ones paying them soooo) but having an even semi-democratic reporting system on artistic success was critical. Same goes for box office.

Because it provides the single most important factor of leverage for artists and unions to find some stake in their own success.

But in a world where everything is turning to streaming and subscription models, the company cash flow now has nothing to do with your given success, so they paint you one way or the other to help their $$$ side.

I understand some of what I'm saying is generalization and there's a lot of little finicky points in this. There are people are genuine damn experts in all of it (and fighting accordingly). But this is absolutely the broad strokes of what is happening.

What's hilarious is the studios would have LOVED to have this years ago because it meant they wouldn't have to have shared backend, etc. But now we're undoing basically everything those artists and unions fought for.

"But but but please tell me it's good for consumers?"

Sorry, it just means your favorite shows are going to get cancelled more and for less good reasons. Also movies don't make economic sense for streamers soooooooo not looking great on that front either.

Who is this ultimately good for? The answer, like most late stage capitalist developments, is always just the major streaming companies and that's it.

So it may just seem like numbers reporting, but it's part of the ever-widening, horrifying jaw of the haves and have nots.

END

This is really important thing to add! The whole thing is it's not true. HBO will tell you that taking great shows past a couple seasons can ABSOLUTELY bring in new subs, in fact, it's the best way to do just that. https://twitter.com/SweetCammyMac/status/1354827525722140673

Look at the ratings below for Game of thrones. The ratings for breaking bad got bigger with every season. It is absolutely CRITICAL for your business. So why isn't NETFLIX realizing that? https://watchersonthewall.com/game-thrones-breaks-new-viewership-record-season-8s-winterfell/

The simple reason is because they haven't had a GREAT show yet that scaled up (outside of bojack, that went 6). It's mostly the mix of bad creative models and constantly misunderstanding their own data because they look at it from tech perspective over creative.

I swear every time I see Netflix talk about their data it's like the scene in THE JERK where the gunman is shooting at Steve Martin and hitting the cans and he's like "He hates these cans!"

No, people don't "prefer" two seasons of slapdash TV that peters out quick.

What they love and have always loved, is living within the world of a show and inviting the characters into their home. This drives admiration, success, brand loyalty, and all the things that made so many cable channels a destination in the first place.

Which is also why I don't talk about the business side a lot. Because the essential core of any business model still comes down to quality of product. Which is why I virtually spend all my time talking about the ways we can maybe kinda sorta hopefully make better media.

Anyway.

For convenience, I ended up putting this in essay form so it was easier to read and expanding on some points. Thanks! https://www.patreon.com/posts/46804164