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foreign

TV shows these days mlund has a pretty

simple strategy I don't watch things to

the end if I don't like them if a show

doesn't hold me for the first few

episodes I'm like well it's not for me

you don't fall for the sunk costs

fallacy no time is precious

my attention is precious so last fall

when she got hooked on a new HBO Max

show called made for love it was kind of

a big deal the show is a sort of

dystopian dark comedy about a woman

trying to leave her Tech billionaire

husband only to find out that he's

implanted a chip in her brain a

prototype for a chip he wants to sell to

the public as a way to help couples sync

up we've created your phones your

computers your software and now it's

time for love to evolve to it's funny

and it's also so dark and sad we made it

possible because you were

made for love

and also Ray Romano is plays her father

and he's like very endearing still as

lovable as ever yes and he is

uh dating or partnered with uh rubber

sock stall and it's just so absurd it's

it sort of reminding me of what is

exciting about television and blew

through all the episodes in just a

couple of days yeah I was sort of

obsessed with the show for a second and

I was telling everyone I thought would

like it that they should watch it but

then just a few weeks later before any

of her friends had gotten the chance to

take her up on the recommendation M came

across a tweet with a kind of confusing

piece of news HBO Max's parent company

had announced that made for love was

being removed from the platform not just

that they wouldn't be making any new

episodes the two seasons that had

already been made would disappear from

the service altogether at least in the

US no one would be able to stream it and

there wouldn't be a way to buy or rent

episodes from other platforms it was

just sort of entering this digital limbo

and I remember talking to it to at least

one of my other friends where I was so I

hope you didn't start it because now

you're never gonna get to see it no

narrative closure for you yeah and we

spent some time being like why why would

they do this it makes no sense and it

just

pisses us off

and em and her friends were not the only

ones left wondering about why their

favorite shows were Vanishing

because it wasn't just made for love

that's disappeared mysteriously over the

past year and it wasn't just from HBO

Max dozens of shows from reboots like

the Twilight Zone to Lusty reality shows

like f boy Island two Prestige

Blockbusters like Westworld all of a

sudden they were just gone

[Music]

hello and welcome to Planet Money I'm

Alexi horowitzkazi and I'm Nick Fountain

today on the show why is this happening

what is the economic Logic for why these

streaming platforms are taking down

shows they've already paid millions of

dollars to make and what does this mean

for the future of all our other favorite

shows

[Music]

to figure out why streaming shows like

Made For Love are being mysteriously

disappeared we knew we were going to

have to visit every corner of Hollywood

from The Writer's room to the boardroom

and to start our quest for Clues we went

to made for Love's Creator and

showrunner Alyssa nutting who is

completely obsessed with making TV I am

a workaholic for love stories

[Laughter]

like what are your hobbies

I don't have hobbies

I mean really like I want to be inside

of a story every second of the day

today's your lucky day

we're inside one right now the Alyssa

story goes something like this a young

writer with bills to pay a kindergarten

age daughter and dreams of becoming a

television showrunner publishes a novel

called made for love back in 2017. she

then spends about a year shopping the

story around to Hollywood Studios and as

it happened she could not have picked a

better time in television history to try

to get into the business Netflix had

inspired Panic among all the Legacy

Media companies and Tech juggernauts

these companies had rolled out their own

new streaming services and they were in

the market for all sorts of content like

quibby was sort of you know like a uh a

whisper on everybody's lips Disney Plus

Hulu there were all kinds of places and

it was just like you know cable is dead

and you know this is this is the future

so Alyssa was thrilled when her show got

picked up and even better when she found

out it was going to HBO Max were you and

HBO Stan oh absolutely the wire Sopranos

uh True Detective True Blood really

everything they made and now made for

love right yes so it felt great it's

probably worth mentioning here that NPR

receives financial support from HBO also

seemingly every other streaming company

Amazon Prime Apple which owns Apple TV

and also FX The National Geographic

Channel and 20th Century Fox which are

all owned by Disney anyways back to

Alyssa's story Alyssa quickly discovered

that getting a show Green lit and

actually making that show are very

different things yeah turns out being in

charge of a Prestige TV operation means

Bay basically having to give up

everything else in your life you can be

a showrunner you know and a mother but

you can only do one of them well I think

at any given time and I always chose the

one that had like millions of dollars

and hundreds of people counting on me to

do my job well sorry kid

but finally after more than a year of

work the show comes out gets positive

reviews and her hard work pays off Made

For Love gets picked up for another

season Alyssa had kinda made it even

last summer when she found out that the

show would not be renewed for a third

season she was disappointed but she

figured you know that's Show Business

she'd proven to herself and to her

future employers that she could do the

thing and anyone who wanted to see her

show could just pull up HBO Max and

watch it but then Alyssa starts to hear

about something troubling happening to

other shows at HBO Max I remember

hearing something a rumor about the

gordita Chronicles you know maybe

disappearing the gordita Chronicles was

another HBO Max original like made for

love the show had gotten good reviews

and had a fiercely loyal following and

now it was apparently at risk of being

removed from the platform entirely and I

mean I was just so shy you know because

it's such a great show and had such you

know Wonderful critical

reception I remember feeling like okay

like nothing safe last August HBO Max

pulled dozens of shows and original

movies off of their platform from

children's programming like the Sesame

Street spin-off the not too late show

with Elmo two period dramas like vinyl

now both the gordita Chronicles and made

for love survived that round but for

Alyssa the whole thing was both

terrifying and kind of baffling how does

that make any sense you know like uh if

they have more shows on their streamer

and things for people to watch isn't it

kind of like more money for them and

this just doesn't feel logical rumors

going around on social media suggested

that these moves had something to do

with cost cutting at HBO Max's parent

company and specifically something to do

with tax write-offs in a particularly

meta moment John Oliver joked about this

theory of about HBO Max on his own show

streaming on HBO Max riffing on the

company's old slogan it's not TV it's

HBO HBO Max it's not TV it's a series of

tax write off toppings Wall Street now

let's poke at that theory a little bit

here's how it goes last spring HBO Max's

parent company Warner media was spun off

by its former owner and merged with

Discovery and as part of that deal the

new company Warner Brothers Discovery

had to take on around 50 billion dollars

in debt and the company made plans to

cut back on spending in all these

different ways including when the idea

on their tax bill taxes for companies in

the content game long had very specific

rules because of how the business Works

movies and TV shows cost a ton of money

up front to make but then the money they

earn comes in over the course of years

as more and more people watch so for a

long time companies were required to

spread out their expenses to write off

all the money they spent on the front

end over the course of roughly the next

decade and the whole tax write-off

Theory seemed to hinge on the idea that

Warner Brothers Discovery was saying you

know all those shows that were taken

down they represent a loss to us we

spent a bunch of money on them and we

don't expect to get that money back so

let's just skip that whole spreading out

the cost over 10 years thing and just

take the whole tax rate off right now

that theory we should say turned out to

be mostly wrong at least in the case of

TV shows like Made For Love first recent

changes to the tax code mean that media

companies no longer always have to wait

to write off their expenses and whatever

savings Warner Brothers Discovery might

have gotten on its tax bill probably

wouldn't be worth all that much compared

to the money they could still expect to

make from those shows but for Made For

Love showrunner Alyssa whether the tax

write-off theory was right or wrong was

besides the point for her all all that

really mattered was that last December

more shows started getting taken down I

would read any article about a show

disappearing and my first reaction was

relief when I didn't see our show's name

included I just was like please just not

us please just not us please just not us

then one morning last December she got

the news made for love was being removed

from HBO Max though Alyssa did not hear

about it from an executive at the

company instead a friend sent her a link

to an article about it before Alyssa

even got out of bed I woke up to this

text message

um and I remember putting the phone back

down closing my eyes and thinking like

let's just try waking up again and maybe

I'll get a different result but uh but

yeah I picked it back up and I saw it

again and

um it was really sad Alyssa had

dedicated years of her life to making

this show with the expectation that it

would kind of live on forever and now

all of a sudden it was just going dark

yeah

and the real reasons behind what was

happening to her show turned out not to

be about tax write-offs but about these

tectonic shifts remaking the

entertainment industry

that's after the break

[Music]

hey Jeff glow here maybe you heard our

recent story meow money meow problems

it's about a small town where stray cats

were bequeathed hundreds of thousands of

dollars in a charitable trust who's this

Bandit okay

now you can go behind the scenes of our

reporting and production process in our

recent bonus episode there is this deep

mystery embedded what happened to all

this money yeah it doesn't just vanish

that episode is available now for Planet

Money plus supporters if that's not you

it could be check out the link in our

episode notes

in order to puzzle through why HBO Max

seemed to be shelving so many streaming

shows we reached out to Warner Brothers

Discovery but they didn't make anybody

available for an interview we also read

through their SEC filings listened to

earnings calls but it was mostly

corporate speak without a whole lot of

clarity so we went in search of a guide

to this world and we found David

offenberg as far as I can tell I am the

only tenured Finance professor in the

world specializing in film and TV David

teaches at Loyola Marymount University

in Los Angeles and as part of that job

he's constantly calling up Hollywood

execs and asking them to confidentially

Spill the Beans about the industry's

latest Financial machinations and now my

my brain is swollen with really obscure

film and TV Finance facts we ran Theory

number one the tax write-off Theory by

David and he said that would probably

not free up enough money to justify

taking a show off your platform on its

own but he did have a theory number two

Theory number two is that HBO Max is

trying to also save on residuals

residuals residuals are the fees that a

television network has to pay a Show's

cast and crew every time the program is

run more than once David says this

system started back in the early days of

television when the television channel

would rebroadcast the same show and the

actor said hey you're making money on

that but I should be making money on

that too because you're using my

performance if the network is going to

sell ads every time they rerun the show

that I wrote or directed or starred in

why should they get to keep all that

money for themselves

residuals are a way to make sure all

these stakeholders get a little cut of

the rerun action and David explains a

similar system has developed for

streaming services except they pay a

flat fee annually instead of on a rerun

by rerun basis so every year that a

streaming platform like HBO Max decides

to keep a show on its site it is

agreeing to pay out all the original

writers and directors and actors

regardless of how many people are

actually watching their work one thing I

can tell you about residuals is that

they are more expensive in earlier years

of the show's life and less expensive in

later years and so there is something of

a heightened incentive to cancel a show

and take it off the platform early in

its life because that's when the

residuals are most expensive David says

that for an almost brand new show like

Made For Love pulling it down could

potentially save the streaming service

millions of dollars in residuals

payments by taking down some shows

platforms might also be cutting down on

the costs of profit sharing deals with

big stars or royalties for things like

the right to use a hit song in an

episode but David says the possible

explanations for these disappearing

shows doesn't stop there and this is

where Theory number three comes in the

revaluation of shows theory for this

Theory you gotta think back to the

moment a few years ago when the

streaming platforms were feeling spendy

because the name of the game then was

just to scale up as fast as possible try

to avoid being devoured by Netflix and

so execs were green lighting shows to

fill their streaming libraries as fast

as they could and the Hope was that

those libraries would become synonymous

with each streaming company's brand and

assure customers that they'd never run

out of that sweet sweet premium content

if you signed up for HBO Max that meant

you could graze your way through every

episode of girls and True Detective at

your leisure then last spring reports

started cropping up about how this whole

strategy might have started to stall out

Netflix reported its first quarter

earnings for streaming giant losing

losing 200 000 subscribers this is the

first time Netflix has lost subscribers

in a decade that is when the fantasy of

an endlessly growing subscriber base

came to an abrupt halt I would say the

music at the streaming party stopped the

day that Netflix announced it lost

subscribers that was the moment where

the mentality in streaming switched from

growth to

maximizing revenue and minimizing costs

Netflix itself did seem to bounce back

but the last year has been brutal for

most of the other major streaming

platforms collectively they've lost

billions of dollars in the last quarter

and while Warner Brothers Discovery may

have pioneered this strategy of pulling

shows from their platform they're not

alone

Warner Brothers took the hit for the

industry they got the heat they got the

blame and then every other streamer

around town looked at that and said oh

that's a good idea we should do that too

and so it's definitely becoming the

industry norm and the boom times for TV

show Runners and actors and writers and

best boys may be coming to an end the

business is maturing and so because of

that fewer decisions are being made by

the entrepreneurs in the room and more

are being made by the accountants which

helps to explain why we've started to

see all these different streaming

companies crack down on password sharing

raise subscription prices and pull back

on developing new shows have we all just

been living in like a subsidized Dream

World for the past five years when it

comes to streaming content

we we have absolutely been living in a

subsidized dream world this is why these

companies are losing so much money on

their their streaming platforms it's

because they've been subsidizing them

for for the past few years to get to

scale to get subscribers and they can't

sustain it and this is where we Circle

back to Theory number three the

revaluation of shows Theory because in

the boom times smaller less popular

shows could be justified because maybe

they brought in a niche audience that

grew the overall subscriber base but

David says with this increased focus on

the bottom line things are now a little

more cut and dry there's two ways a show

adds value to a streaming Platform One

is does it bring in new subscribers and

two does it retain existing subscribers

so think about what happens when a new

season of Bridgerton comes out and

you're like oh yeah I gotta sign back up

for Netflix right now Bridgerton is the

kind of show that goes in category 1.

bringing in new subscribers it's like a

Gateway show yeah and Netflix expects

some of those customers to cancel their

subscriptions once they've binged

whatever they signed up for but they are

hoping that they have enough stuff on

offer to keep people around between the

Blockbusters which brings us to category

number two the shows that retain

subscribers The retainers so this would

be like you've finished the new season

of Bridgerton and you're going through

salacious romance withdrawal and as you

are frantically scrolling through

Netflix you stumble across I don't know

the Tinder swindler and you're like well

I might as well burn through this one

too now that I'm already signed up yeah

Tinder swindler That's a classic

retainer now at this point if a show is

not in one of those two categories it

might fall into the dreaded category of

Library shows the ones that streaming

platforms used to rely on to give their

subscribers the impression of of an

endless universe of content but now the

value of being a library show has gone

way way down and what the streaming

services have found is that people don't

watch those Library shows very much they

sit there they accrue residuals costs

and they're not actually getting watched

but just because many shows are bringing

in fewer subscription dollars then they

are costing these streaming companies

that does not mean that these shows are

completely worthless there are all sorts

of new platforms and even old cable

channels that would love to get their

hands on some premium content that up

until now has been locked away as part

of this Library hoarding model which

brings us to our final theory in the

case of the disappearing shows

the yard sale Theory so all these shows

that HBO Max has taken down represent a

library of assets that could be sold so

it's not just that they're taking them

off the platform to cut residuals but

they could actually sell these assets to

other providers yeah in fact some of the

biggest titles have been taken off HBO

Max are already being licensed to other

streamers shows like Westworld Raised by

Wolves and yes F boy Island are all

being sold off to platforms like 2B

where get this you'll be able to watch

them for free but you gotta watch some

ads or if you want to go even more retro

some you'll be able to watch on DVD it

is kind of a new era one that Warner

Brothers Discovery president and CEO

David zazlov who insists on calling

subscribers Subs seem to acknowledge in

an earnings call last year I believe the

grand experiment

facing Subs at any cost is over

let's face it the strategy to spend

money with abandon

while making a fraction in return

on the service of growing sub numbers

has ultimately proven to be deeply

flawed in the big picture Finance

Professor David offenberg says that what

this all means for the rest of us is

that this golden age where we've been

served more Netflix than we could ever

possibly chill to that is coming to an

end I think the peak of streaming was

2021 where we had a ton of streaming

services with a ton of great shows at

low subscription prices

and we are never going back to that we

are going to have fewer streaming

services going forward as they

consolidate we are going to have higher

prices as we've seen and we're gonna

have fewer shows we're gonna have to

watch whatever they serve us just like

CBS NBC and fox and ABC in the in the

old days

for now at least shows like Made For

Love Remain stuck in limbo between the

old way of doing things and the new one

Alyssa nutting the show's Creator says

she's had talks about how and where made

for love might be able to stream again

but no deal has been made so far as for

M Lund the Made For Love Super Fan who

recommended the show to all her friends

before finding out it had been removed

she says this whole debacle has her

reconsidering her relationship to all

the streaming platforms but really HBO

Max in particular like as they pull

things from their streaming service I

think about canceling my subscription

just out of spite

she is still holding on to the world

where we could depend on streaming

platforms to keep their libraries up

forever so that a show she loves today

would still be there tomorrow and that

if I go and recommend it to friends if

they wait three weeks to go watch it it

will still be up on the website

Fair request that your credibility isn't

impugned by The Disappearance of your

recommendation within a week or two

right I'm losing friends over this it's

terrible though Friends the TV series

that you can still stream on HBO Max at

least for now

foreign

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it in the show notes today's episode was

produced by Willa Rubin with help from

Emma Peasley it was edited by Keith

Romer engineered by Josh Newell and fact

checked by Sierra Juarez Josh Jang is

our acting executive producer special

thanks to Jamila white Jonathan Handel

Elon heimoff Skyler Moore Theodore

Garcia and Eric Duggins I'm Alexi

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foreign