What’s With The Late Cancels?

Credit -- Todd Van Hoosear --https://www.flickr.com/photos/92787319@N00/6243399610

At the end of last week, it was announced that Snowpiercer’s final season (season 4) was canceled. This announcement was made after the series wrapped filming and was well into post.

It’s not the first, or even the tenth series or movie that has had this happen since last summer.

And if you don’t want to read about this anymore, the reason why is money. But it’s also a little more complicated than that.

Reruns Are Worth Money

When HBOMax had it’s merger, a lot of shows got canceled. Many series were pulled off the streaming service as well, shocking many of us since the entire ‘binge’ concept relies on the series being able to be watched. On top of that, some of us were confused since streaming is actually incredibly cheap for networks, especially for older shows, because streaming licenses aren’t built in like they were for linear.

Back in the 1950s, when TV was a young but booming industry, everything was live. Being live lead to some hilarious moments like one actor giving the tagline for the wrong product (my memory fails me, but it was either he sipped a coffee and said it was a great cigarette or vice versa). But filming everything twice (once for East and West coasts) was gruelling, so people started to record the lives and re-air them for the West. Naturally this lead to the phenomenon we know well, the rerun!

In 1952, reruns started earring residuals that’s to the Screen Actors Guild (SAG) president … Ronald Reagan. But. If you, like me, have less than fond memories about Reagan (especially regarding AIDS and ‘trickle down’ economics), it’s nothing compared to film actors who did not get residuals(!) and the studios who simply despised Reagan for costing them money.

How dare Reagan make it so actors got paid for reusing their work, because that meant screenwriters also had to be paid!

I know. The more things change…

After a strike and some more arguments, the terms settled that movies made after 1960 would get residuals, and everyone who made a movie between ’48 and ’60 got a one-time payout. And that meant people like Mickey Rooney and Bob Hope kind of got the shaft, since much of their work predated 1960.

For those of us who remember 1988, there was a 22 week strike by the Writers Guild of America (WAG) over residuals again, this time in foreign countries. It was eventually settled, but basically you see the cycle. Networks want to make money off a show and not pay people for the work, because it was a one-and done.

Streaming Enters the Fray

Jump to 2007. Streaming media is up and coming and home media (DVDs) is all the rage. Everyone wanted a piece of that pie. After all, why was it okay for a network to sell a show and get money but not share it? And why weren’t the residuals increasing with increased income? The networks were making gold, the writers made copper.

But again, the various unions involved (SAG, WGA, and now the Alliance of Motion Picture and Television Producers (AMPTP)) weren’t all on the same page. AMPTP wanted a new formula to pool the money, which would let studios ‘recoup’ their costs in paying out, and would actually solve some of the problems of residuals being the same regardless of an increase (or not) in TV profits. It didn’t go well, since the WGA wanted a larger cut. Considering they got 4 cents for every DVD sold, I can see why (the original calculation was related to the cost of making VHS tapes).

One of the things the AMPTP wanted was to not extend the residuals for online content for three years. I know that sounds weird, but basically the WGA (and others) wanted to sort this out now and AMPTP didn’t think we knew enough in 2007 to make a fair formula.

Given the explosion in streaming, honestly that argument goes both ways.

Now. The current math is pretty damn lucrative for guild members. And naturally studios despise it, because the way it worked out is that even if TV profits drop, the residuals don’t. Residuals increase every year because they’re tied to salary minimums, which actually do increase (unlike minimum wage…). But they’re also capped at a max, which made residuals a little better if you were a bit actor on (say) Law & Order and not one of the mains. And on top of that? The profits were based on being non-cable TV re-aired on major networks.

The Shuffle Begins

If you can’t guess by now, studios are paying more per re-run than they were before and getting less back. We started to see them recoup losses by pulling things off of Netflix. When a studio airs a show on Netflix, they get paid for it and some of that goes back to the actors and writers. But if the studio plays it on their own streamer, they pay them less.

Sidebar: This maths out differently for movies, due to how residuals are structured with that, but there’s also a funny turn. See, if you get Netflix for the TV shows, you’ll probably keep it for an extra month between the show you’re watching now and the one you’re waiting for. The same isn’t true of movies. As Wedbush Securities analyst Michael Pachter said “No one is going to say, ‘I am not quitting Netflix because I want to watch the new Spider-Man movie in two years.’”

Studios and their Streamers have to balance out having enough shows to make their network worth the money. At first, everything was on Netflix or Hulu, and that wasn’t terrible. But to get people to (say) Peacock or Paramount+, they had to pull things from Netflix. That created a situation where Netflix and Hulu lost shows as soon as licenses ran out, and worse, prevented shows from being picked up by other streamers because of the draconian contracts (like my beloved One Day at a Time).

Get out the Axe

After the last five years of that shuffle and consolidation, we’re at a place where streaming is the new cable, and it’s impossible for everyone to have all the channels they would normally watch. If you want ABC, you need Hulu. NBC? Peacock. And on and on, we end up having seven subscriptions to keep up. Most people will simple cancel one for a couple months and go back when there’s enough to binge.

But! Now those streamers are pulling the shows! You can’t binge because they’re gone! Westworld, for example, was removed from HBO Max not long after being canceled. In a peculiar twist of fate, those pulled shows are going to free streamliners like Roku or Freevee … both of which have commercials.

Guess what that means? More money! Warner Bros (who owns HBO) gets money from the network who airs it, money from the commercials profits, and less bandwidth on their own streamers.

Now I know someone’s going to say “Hang on, they pulled things from Netflix/Hulu to their own streamer for money and now they’re going to another streamer?”

Yeah, with better contracts. And I bet none of those harsh restrictions Netflix put in place. The other thing is that the networks make less money on their own streamers. They only get paid if someone watches commercials (which most don’t, and is why they want commercials back) or when someone signs up. That’s a low payment, when you compare it to how much they pay out to the actors and writers.

If, instead, you put your show on a 3rd party streamer like Freevee or Roku, the licensing fees they pay to air a show goes to the money to pay out for residuals.

Sort of hoisted on their own petard there, one might say.

If a show isn’t pulling in and/or retaining subscribers, a streamer will cancel and possible pull the show. After all, why pay extra for a show that gets watched by a few thousand people? And for places with commercials, the advertisers won’t buy space on shows that don’t perform.

Yet Again, It’s About the Benjamins

No matter the model a streamer uses, the best way to make money is supporting the most popular content. Everyone wants the best licensed and original content, and to cull the less popular.

But what’s happening with TBS and AMC and HBO right now isn’t that simple. Instead of trimming low-producing content, they’re trimming expensive content and pulling it fast, which means people start looking and go to those 3rd parties and pay more.

Oh. Those crafty fuckers.

Unlike Hulu’s rolling availability (which is deucedly clever), shows are now vanishing like the old Disney VHS/DVD vaults. Good luck finding them.

To repeat my age old snark, when streamers pull a show, they probably won’t put it up on DVD to keep. Just think, if Netflix yanks Sense8, you will never be able to watch it (legally) again.

And that? That chaps me mightily.

But Why the Late Cancel!?

All that leads to this.

If a show is filmed but not aired, the network pays a lot less. Like a lot a lot. No residuals, and bonus few people will watch seasons 1-3 of Snowpiercer because who wants to watch a show without a damn ending? Actors and writers get paid a smaller amount for the work in making the show and no residuals, and now that no one watches the show that ended on a cliffhanger, you can prove the show is a low-draw and pull it from your streamer.

They cutting costs everywhere but at the most senior levels, all in the quest for eternally increasing yearly profits.

But this is going to come to a head sooner or later. Eventually the streamers will have maximized everything they can, and won’t be able to get new viewers. That’s why Netflix is cracking down on sharing accounts, even though they used to be all in for it as a promotion. They want everyone in a household to pay, not just one per household, and it’s getting worse. Next we’ll see commercials and everything possible to get more money and profit, because if they aren’t increasing profits year over year, they’re failing.

I don’t know which will happen first, the revolt of users or the realization that you can’t always increase profits, but what I do know is that it’s going to get a little worse before it gets better.

We’re going to see more ‘finished’ shows that never see air, and we’re going to see more commercials.

Buckle up, butterqueers, it’s going to be a bumpy ride.

About Mika A. Epstein

Mika has been deep in fandom since she could say 'Trekkie.' With decades experience in running fansites, developing software, and organizing communities, she's taken on the challenge of delving into the recesses of television for queers long forgotten. Making this site with Tracy is nothing short of serendipity. Mika lives with her wife and their cats in Southern California. Of course she has a hybrid, but she'd rather ride her bicycle.
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