Nina Metz | Chicago Tribune (TNS)
Streaming platforms have been spending more on television programming than at any other time in history. And yet, as the Hollywood actors and writers strikes have made clear, that money isn't going to most of the workaday people who make these TV shows. So where is the money going? Let's make some educated guesses.
In 2022, Netflix spent $16.7 billion on content. Over at Warner Bros. Discovery, that number was $18 billion.
How does that compare to what TV networks were spending 25 years ago? A 1997 report on the FCC's website titled "TV Programming Costs" gives us a snapshot. The cost is broken down by licensing fees paid per week, or what TV networks were paying to license shows from the studios that actually made them (for example, NBC licensed "Friends" from Warner Bros).
For the '97-'98 TV season, NBC was spending the most, with $29 million a week in licensing fees. If we assume those shows had 22-episode seasons, the total spend on scripted programming was around $640 million.
These are crude numbers — it's not an exact 1-to-1 comparison to what streamers are spending now (which also includes their film slates and, in some cases, sports rights) — but it gives a ballpark figure that puts in context just how dramatically the landscape has changed. Even accounting for inflation, programming budgets have ballooned.
If that money isn't reaching rank-and-file actors, writers and crew members, where is it going?
— Executive pay is one answer. C-suite compensation is in the millions, and that's before bonuses and stock options kick in, which has made these executives very rich indeed. The CEO pay machine is a worthy target of criticism.
But the conversation shouldn't stop there. Where else is the money being spent?
— More shows are being made. A lot more. The number of scripted series in 2009 was 210. The number of scripted series in 2022 was 599. You can't triple the number of shows made without spending a lot more money.
But there's no way that 600 shows can bring in audiences sizable enough to offset the cost. Can streamers justify what they're spending when only a few shows are major hits?
Most streaming originals have short seasons, with 6-10 episodes. Fewer episodes should mean lower overall budgets, right?
Yes. But also, no.
The more shows a company makes, the more shows it has to market — and that also costs money, which is probably why some shows receive barely any marketing at all. (RIP the very funny "South Side.")
Networks and streamers frequently send swag to journalists and influencers. That's part of the marketing budget and the costs have to be substantial. A recent tweet from Eric Goldman, managing editor of the digital site Fandom, included photos of a large, heavy box he received from Peacock on behalf of the series "Twisted Metal" that contained a show-branded minifridge "filled with ice cream and swag (and a viewing screen I'm currently charging)."
I'm not convinced social media posts that amount to "look at the free stuff I got" meaningfully bumps awareness or is effective marketing that gets people to actually watch a TV series.
— The kind of shows that are being made has changed. Streaming has moved away from the type of shows that are common on network TV, with their fixed sets that can also be repurposed when needed.
These days, viewers aren't interested in a streaming original unless a show has a unique cinematic feel, prestige locations and costly CGI — or so the thinking goes, whether that's an accurate reflection of audience tastes or not.
Shows like "Witcher" and "Stranger Things" fall into this category. But so do plenty of lower-tier fantasy shows that don't draw nearly the same audience.
By comparison, old-school weekly episodic series on network TV have to follow a rigid schedule and that can keep a budget in check. There are no reshoots because there's no time. If they don't stay on schedule, they won't have an episode to air.
Additional filming is costly. Last year, after shooting nearly 80% of "The Idol" (at a rumored cost of $75 million), HBO scrapped the whole thing and started from scratch with a new budget. HBO paid for that show twice.
Marvel's "Secret Invasion" had a $212 million budget and at least some of that was eaten up by a four-month reshoot.
This is just a very expensive way to make television. Should any unproven freshman show cost more than $10 million an episode?
Or consider the case of "Yellowstone" creator Taylor Sheridan. In May, the Wall Street Journal reported that the "actor-turned-writer and ranch owner dictates where and how his shows are filmed with little pushback," charging as much as $50,000 a week at his Texas ranches and $25 a head for herds of cattle. "Privately, executives and crew involved in the shows question both the total amount of spending and where the money is going."
— Some celebrity talent are getting massive deals. While most writers and actors haven't hit the jackpot, a select few have. On the acting side that includes Jennifer Aniston and Reese Witherspoon (for "The Morning Show"), Elisabeth Moss (for "Shining Girls") and Chris Pratt (for "Terminal List") to name a few, all making $1 million or more per episode. These aren't deals that come after a season or two of proven success, but are in place from the word go when it's anybody's guess if the show will pan out with viewers.
On the writer-producer side, that includes show creators such as Ryan Murphy and Shonda Rhimes. Phoebe Waller-Bridge had a $60 million development deal at Amazon that resulted in no TV or film (Amazon renewed the deal in January). There has been a similar lack of output from J.J. Abrams and his $250 million overall deal with Warner Bros. Discovery. "Game of Thrones" showrunners David Benioff and Dan Weiss signed a $200 million deal with Netflix in 2019 and are expected to have their first show premiere in 2024.
That's just a sampling. The top 10-15% of talent may be getting these kinds of deals. The argument made by striking writers and actors is that the studios are telling them: Sorry, there's just no money to improve upon the old contract.
— Are streamers overpaying employees on the noncreative side? Specifically engineers and technicians? Are companies more or less subsidizing those salaries by underpaying actors, writers and crew?
Early on, Netflix recruited veteran talent — people making perhaps as much as $400,000 a year — from the likes of Google, Microsoft or Facebook. That meant every other new streamer had to match or raise that to "compete." In terms of operating cost, that's another big chunk to consider.
The current path is unsustainable and has led to a striking workforce. The larger question is: Can studios and streamers rethink how their multibillion dollar budgets are carved up in order to negotiate fair contracts with the writers and actors guilds?
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Nina Metz is a Tribune critic
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