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Celestial writes:

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%.

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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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