Streaming services have revolutionized the way we consume content, providing instant gratification and a vast array of options at our fingertips. However, as these services continue to cut costs and change the industry, some unintended consequences have emerged. One of the casualties has been the traditional television industry, which has seen a decline in both viewership and production. With fewer shows being produced, actors and other industry professionals are also feeling the hit to their wallets due to diminished residuals. In this article, we’ll take a closer look at the impact that streamers have had on the entertainment industry and explore what the future may hold.
Actor Diana-Maria Riva recently experienced the pain of having a show she starred in, “Gordita Chronicles,” cancelled. However, what made the situation worse was that the show was removed from HBO Max’s library of shows, along with dozens of others, effectively wiping it from existence for US viewers. As streaming services are facing pressure to save money, many have followed in HBO’s footsteps of erasing original shows from their libraries to receive tax write-offs and reduce residual payments. This has brought into question whether streaming services are sidelining already marginalized voices and shortchanging creatives out of even slimmer residual paychecks. These issues have caused increased tension between executives and writers in union contract negotiations that began in late March and could lead to a significant work stoppage this spring.
Streamers are under increasing pressure to cut spending and turn a profit instead of “chasing growth at all costs,” says media analyst Dan Rayburn. Disney’s stock, for example, fell significantly after the company revealed that its direct-to-consumer unit, which includes Disney+, Hulu, and ESPN+, lost nearly US$1.5 billion in one quarter. In 2022, HBO deleted numerous shows from its streaming library, including “Westworld”, “The Time Traveler’s Wife,” and “Mrs. Fletcher.” HBO’s rivals quickly followed, erasing their libraries of shows as well. Even though some shows have found new homes through licensing deals, many, like “Gordita Chronicles,” remain in limbo, never to be seen again.
As streamers fight for survival in a hyper-competitive, changing market, they argue that they never promised that shows would stay on the service forever. Customers have also adapted to hopping among apps to find the titles they want. With the shift in consumer habits and an increased pressure to turn a profit, streamers are taking a closer look at their libraries. Casey Bloys, the chair and CEO of HBO and HBO Max, argues that the idea of everything a company produces staying in one place forever is not viable, especially for US$15 a month.
However, the decline of residual payments in the streaming era has thrown creatives into alarm, as large checks are no longer consistently rolling in. As part of union-negotiated contracts, streamers still pay residuals, but these back-end payments are nowhere near the size that casts and crews receive from TV channels. Streamers are not obligated to host shows for years on end. Each additional year a show is on a streamer, residuals decrease, assuming it remains part of the library. With the Writer’s Guild of America West’s contract with the Alliance of Motion Picture and Television Producers expiring in May, writers are looking for better residual rates, higher minimum pay rates, and better financial security in an industry that is far more likely to order a 10-episode season than the 22-episode season that was standard when broadcasters dominated the medium.
The shifting landscape has become a significant issue for creatives that could lead to a full-blown work stoppage this spring. The last writers’ strike in 2008 was a 100-day work stoppage that cost the California economy an estimated US$2 billion. Despite the fall in residual payments, residuals play a crucial role in ensuring that an actor makes enough money over a given year to retain insurance eligibility via the actors’ guild, SAG-AFTRA. An issue that the industry is facing is whether streamers are sidelining already marginalized voices and shortchanging creatives out of even slimmer residual paychecks.
As the world of television streaming continues to evolve, it’s becoming increasingly clear that the traditional television model is no longer sustainable for many networks and production companies. With streamers cutting costs by creating their own content and bypassing the need for residuals, we can expect to see fewer and fewer classic TV shows available for audiences to enjoy. As the industry continues to adapt to these changes, it’s likely that we’ll see new and exciting forms of content emerge, as well as new revenue streams for actors and other industry professionals. One thing is for sure: the world of entertainment is changing rapidly, and we can expect to see many more surprises in the coming years.
