[Image Description: A Twitter thread from Peter Clines (@/PeterClines) that reads the following across five images:
I’ve seen a few folks discussing the latest slate of Netflix cancellations, and I thought “hey, this is the internet - I should share [capslock] my [end capslock] thoughts.”
So let me tell you what I think’s going on with streaming shows right now. But first... a little history.
Back in ye olden broadcast times, creative folks in television made a lot of their money on the back end—what publishing folks now call the long tail. Sure you got paid for that episode, but you also got paid the first time the network aired it. And also...
...when it got replayed later in the season (reruns!). And the big dream was syndication, when you’d make non-stop money. Okay, not tons of it, but with syndication those pennies could add up.
These are residuals. Actors get ‘em. And writers. And directors. Even the crew.
Yeah, IATSE crew members got residuals. The biggest ones, really (which tends to come as a shock to many folks). That’s why they had that amazing healthcare plan for so many years. It was funded by their residuals.
So anyway back around 2006-ish, many folks noticed their residual checks were shrinking. A lot. Because episodes weren’t getting rerun. And things weren’t going into syndication.
Because the studios were streaming them instead. Miss an episode? Watch it online!
“Hang on,” said the creative folks. “Where’s our cut?”
“You don’t get a cut,” said the studios. “Check your contracts. Nothing about the internet in there.”
“Well let’s put it into the contracts.”
And thus we had the Writers Guild (WGA) strike of 2007-2008.
Much has been said about this. Some of it by me (intrepid entertainment journalist at the time). The WGA struck to get new streaming terms put into contracts. The actors (SAG) and directors (DGA) supported them almost immediately.
IATSE... didn’t. That’s a whole ‘nother story.
Anyway the strike was overall successful and new terms became standard for streaming residuals.
With one catch. And I think that catch - that concession - is what’s shaping a lot of streaming decisions right now.
Y’see, in negotiations the studios kept *insisting* they weren’t sure streaming would make money. Even though, for example, NBC was going to the Consumer Electronics Show in Las Vegas and saying they expected to make one billion in online revenue that year.
They insisted the creative folks agree to a "free window." For a set number of days, a network can stream a show and not pay ANY residuals. This would let them recoup costs in the uncertain world of the internet. Once the window's past, residuals would flow at the agreed rates.
The window? Twenty-four days for new shows, seventeen for established shows.
Networks can stream a brand new show for three and a half weeks and pocket every single cent of revenue they earn from it.
Does this timeframe sound a bit familiar?
D’you ever wonder why on so many network sites, they’d show you the latest episode, maybe the previous three... but then you have to sign up and pay?
It’s so they don’t have to pay residuals. As long as you’re watching in that 24 day window, they don’t have to share a penny.
Sounds like a model that would really benefit from you binging a lot of episodes in the first week or two, doesn’t it? And a show people don’t binge immediately would cost the studio money, because they’d have to start paying out residuals.
(and as a side note - keeping a bunch of older shows online? That also means paying residuals. Better to remove them from your service. It saves you money)
I think this is what’s driving so many studio decisions right now in regards to streaming. They've gotten used to not paying residuals to the creative folks and they want to keep it that way. That’s why popular, well-reviewed shows get cancelled (or removed from services).
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