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posted by janrinok on Tuesday October 18 2016, @07:52AM   Printer-friendly
from the dunno,-change-channel dept.

The Guardian asks: Is the golden age of television over?

Money is the root of TV's problems. In the US, where the TV economy is headquartered, TV and internet access costs two to three times what it does in the UK, and networks are in a tug-of-war with Americans, who are increasingly shredding steep cable bills in favor of Netflix and streaming services. This summer, many networks became locked in all-out legal battles with cash-strapped cable companies, with multibillion-dollar distribution deals at stake to fund those networks' huge programming budgets.

Executives are planning for a less luxurious future, in which TV shows may be briefer, lower-budget and filled with the kind of product-placement ads that audiences hate and advertisers pay for. Worse still, the company that started much of the trouble may soon confront flaws in its own business model.

Netflix reports earnings on Monday. Its problems, and those of companies like it, are more pressing than those of traditional television. At a conference in New York this month, chief executive Reed Hastings was blunt.

"Disney, who is very good in China, had their movie service shut down," he told an audience at the New Yorker Tech Fest. "Apple, who is very good in China, had their movie service closed down. It doesn't look good."

Hastings said his company was seeking to expand in other countries, India in particular. But there's a reason media businesses seeking vast scale tend to view China as the solution to all their problems: internet penetration in India is rising from 26% according to the World Bank. In China, it's rising from 50%.

[Continues...]

Netflix needs the money that increased scale would provide, in part, to pay top dollar for shows such as Arrested Development and Lost. In January, it told investors it owed $10.9bn in TV show licenses alone, with $4.7bn of that due this year. After that, almost the entire balance is due before the end of 2018.

Netflix will have to keep buying reruns at what will almost certainly be increasing rates if it wants to retain its users, and the companies selling those shows are now in a tight spot too – largely thanks to the ad-free Netflix model.

At US television networks, budget struggles mean making shows more as UK networks do, except with lots of ads and product placement: shorter lifespans, fewer sets and special effects, fewer episodes per series – and then little margin for error if shows look like they're failing early on.

Netflix cannot scale back. Its viewers pay for it outright and express their displeasure by canceling subscriptions, not by changing the channel. If anything, its executives are spending more: Baz Luhrmann's 1970s New York period piece, The Get Down, came with a record price tag for a service that had already driven up the cost of new scripts: $120m for 12 episodes, according to Variety.

In short, television content is expensive. With fewer people watching, the advertisers are getting fed up with paying the premiums the television networks ask for, and people aren't willing to pay the real price required for good television content. Unless something changes soon, expect cheaper television shows with shorter seasons and lots of product placements within the shows.


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  • (Score: 3, Interesting) by quintessence on Tuesday October 18 2016, @08:46AM

    by quintessence (6227) on Tuesday October 18 2016, @08:46AM (#415590)

    I'd also be interested in the cost to produce a Netflix program compared to a similar quality cable program.

    I'm a bit surprised that with technology reducing the costs of most aspects of production that somehow those don't translate. I mean the argument previously was that that with reduced costs cable networks could try more diverse programing in the hopes of having a left-field hit or at least having a steady core following for certain demographics.

    Now they are saying cable companies are still unable to turn a reasonable profit even with reduced costs and a revenue stream not available to most products: advertising.

    Something is screwy in the works here. Maybe a bit too many barnacles on that ship.

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  • (Score: 0) by Anonymous Coward on Tuesday October 18 2016, @08:49AM

    by Anonymous Coward on Tuesday October 18 2016, @08:49AM (#415591)

    Layoffs and outsourcing will solve everything. Hope you love Bollywood.

    • (Score: 4, Insightful) by quintessence on Tuesday October 18 2016, @09:19AM

      by quintessence (6227) on Tuesday October 18 2016, @09:19AM (#415593)

      The same arguments were made against Japanese cars in the 70s, and now Japanese car makes are having the same response to Korean cars. After 40 years "they took our jerbs" doesn't have the same ring to it.

      If Bollywood can make Starr Trekk: The Musical entertaining and turn a profit, more power to them.

      However the incessant navel gazing over how the entire world economy must turn on a dime to prop up the salaries bloated Americans is a joke. Might as well outlaw earth movers and give people spoons for any heavy construction. That will certainly save the economy.

      • (Score: 0) by Anonymous Coward on Tuesday October 18 2016, @09:52AM

        by Anonymous Coward on Tuesday October 18 2016, @09:52AM (#415601)

        "I've got a wife and two kids back in Detroit. I haven't seen them in six months. The steel mills were laying people off. They finally went under. We gave the steel companies a break. They gave themselves pay raises. The golden rule: He who has the gold makes the rules. If they close one more factory, we should take a sledge to their foreign cars."

        "It's business, that's all it is. You still don't get it. There ain't no countries anymore. They're running the whole show. They own the whole planet. They can do whatever they want. We can have it good for a change. If we help them, they'll leave us alone to make some money. You can have a taste of the good life. It's what everybody wants."

        • (Score: 0) by Anonymous Coward on Tuesday October 18 2016, @07:46PM

          by Anonymous Coward on Tuesday October 18 2016, @07:46PM (#415818)

          Parent's quote is from a cool B movie starring Rowdy Roddy Piper.
          It is a parable about Consumerism and Neofeudalism. [googleusercontent.com] (archived) [1] [archive.li]
          If you haven't seen it, you should seek it out.

          [1] I wish I would have archived the page that EverythingExplained had before they "improved" that.
          That site's presentation was much nicer.
          (The content that I like is a 2012 version of Wikipedia's page.)

          -- OriginalOwner_ [soylentnews.org]

      • (Score: 2) by VLM on Tuesday October 18 2016, @12:03PM

        by VLM (445) Subscriber Badge on Tuesday October 18 2016, @12:03PM (#415625)

        prop up the salaries bloated Americans is a joke.

        Profits, technically. For example, walmart makes a lot of money of arbitrage buying stuff in China with no labor or environmental or public safety laws and selling to Americans as "just as good as locally produced" (which most of that crap isn't). It is a huge amount of money but I assure you basically none of it goes to the employees who aren't paid much more than any other mcjob.

      • (Score: 1, Informative) by Anonymous Coward on Tuesday October 18 2016, @02:14PM

        by Anonymous Coward on Tuesday October 18 2016, @02:14PM (#415671)

        to prop up the salaries bloated Americans is a joke.

        This is why most of the innovative and successful companies come out of the US. You Eurotards spend so much time whining and bitching about the US, how they're doing things wrong, how they're not so great, etc. etc. etc., that you have no talent you can keep. Your best people go elsewhere, largely the US, to become successful because all you can do is whine and bitch and moan, that you don't ever actually do anything useful. Except for a few isolated islands here and there, the psyche mirrors the political environment of hand wringing and deliberating, but not doing anything. Long gone are the glorious days of the 19th and early 20th century scientific enterprise. All your talent went to the US. You now sit oblivious to the sad and pathetic image you portray, the Nora Desmond of science and culture, never truly knowing how sorry you sound when spouting nonsense like that.

      • (Score: 2) by Hyperturtle on Tuesday October 18 2016, @05:15PM

        by Hyperturtle (2824) on Tuesday October 18 2016, @05:15PM (#415750)

        No, giving people spoons merely allows for a government handout as a jobs program, although in a deeper context, you are correct as is Milton.

        The way I see it, ensuring unskilled people never have the right tools and have too much work to do with the tools they *are* provided is a strategy most political spectrums can agree with, at least when it comes to remaining in power (the argument is usually about which party in power introduced the policy), and it keeps the underclass busy as well, while the power that remains is up for dividing any riches among the entitled people. Petty squabbles as to who is more entitled than who comes about, but the masses can be exploited as needed to help even it out.

        Considering that, the spoon program is effective for another reason. Plowshares to swords, pruning hooks to spears, and scythes can reap more than wheat. Some tools can be made quite effective for purposes other than their original intent, even if crude.

        As for spoons... there is no spoon as far as that ideology is concerned. Without education, without tools, without much of anything, the masses are dependent on the little they are given, and often are encouraged to enjoy the generous government benefits that the short-sighted (or those who are at no risk of being in power) see as a free hand out.