Amazon CEO Asks His Hollywood Studio to Explain Its Big Spending
bloomberg.com
bloomberg.com
Now that subscriber growth is slowing down at most streaming services, the end of the "golden age of TV" is at hand.
Welcome to the "bean-counting age of TV," in which streaming services try to milk subscribers for as much as possible without pissing them off too much.
Going forward, I'm expecting cheaper content, greater restrictions, higher prices, a proliferation of tiered subscription plans, and pervasive advertisement.
Completely predictable.
Netflix's proliferation of reality TV (Love is Blind etc) felt absolutely jarring to me at first but it's just the tip of the iceberg. We're going to look back on the era of prestige TV fondly.
This should be seen as a death-kneel for any channel/service, yet those cable channels keep going after decades of truly terrible TV.
I wonder what kind of person these shows pander to.
An absolutely massive audience that just wants to switch off at the end of the day rather than engage in a deep drama or similar. I'm not exactly defending it but don't underestimate the size of that audience.
James Cameron said something to the effect of "a ticket to a movie is a promise to give something 100% of your attention for 2 hours" -- and most of the time I'm NOT willing to do that.
Reality TV or something is fine much of the time.
It's not great for the industry but culturally, we're not supportive of strikes worker rights, especially if the media tells us it's okay to hate those workers for being "rich" Hollywood folk (most writers are struggling), and doesn't point out we're supporting scabs by watching reality tv.
We may all want to watch Ballers or some other a tv show starring The Rock but he's the highest paid actor in Hollywood and is able to command a share of the revenue from the show. It's not publicly known for him, but the TV show friends had their actors earning a million dollars per episode by the end of it, and they get paid residuals for every time the episode gets watched. Meanwhile in a race to the bottom, reality tv show contestants are often (sometimes literally!) fighting for table scraps from the tv studio. A one time appearance fee $25,000 or lower - and the beauty of it being a contest is you pay the losers even less, if at all! Hell, some of them do if for the exposure and the experience and go home with nothing other than being able to advertise for their restaurant with that claim to fame for their restaurant.
And on the subject of reality TV, this is a good retrospective of how many cable channels from MTV to Bravo have drifted from their once lofty, even high-brow identities into domination by reality television. It really is a ubiquitous trend.
I wonder what genre will succeed reality television. Maybe they’ll find a way to adapt Twitch streaming or vlogging for television, and then they will have to pay even fewer people.
> We may all want to watch Ballers or some other a tv show starring The Rock
As an aside, apparently not, judging by what happened to Young Rock. :p
I don't think prestige TV is necesirely expensive though.
The wire, breaking bad, Andor, the bear, severance all can achieve incredible results without hollywood budgets.
If anything big budgets have not translated into quality, see GoT, Rings of Power, Stranger Things all getting worse the more moeny thrown at them.
prestigue tv is about talent, and having longer story lines, it just allows for more character work than a movie, but not because of that does it have to cost exponentially more.
Severance S2 reportedly costs $15–20 million per episode to make, and Apple+'s average original series budget is ~$10M/ep.: https://www.gq.com/story/severance-season-2-delayed-behind-t...
Andor S1's budget was reportedly $250M for 12 episodes ($20.8M/ep): https://www.ign.com/articles/andor-season-1-reported-budget-...
Which is more expensive than the combined budgets for The Mandalorian S1 and the upcoming Skeleton Crew S1. Tony Gilroy outright said:
“We got lucky making this during the gold rush a few years ago. A lot of people now have cold feet, and you can’t do this show inexpensively.”
https://fandomwire.com/we-got-lucky-you-cant-do-this-show-in...
What's the background on why that comment was being made?
I always took the last part to be an exaggeration, but it did sound like he cut the division a lot of slack on spending because he liked the idea of it.
My understanding is that Bezos approved Amazon taking over the airing of the canceled The Expanse because he likes the book series the show is based on.
The parent was making a jibe at the TV License which is mandatory if you own a tv or "streaming capable device" (because the BBC can stream now.. sigh).
As someone in the UK, I can buy a subscription to Amazon Prime Video, or not, I can buy a subscription to Netflix, or not. I can pay for a BBC licence so I can watch iPlayer, or not.
I can watch free TV on ITVx or Channel 4 switching a subscription for adverts.
What do I not have?
People are voting with their wallets. Hollywood in the 90s was much better at entertaining people and therefore much better at getting their money.
Studios will start making shows with good writing again. Apple TV often already is, with some glaringly bad exceptions like Foundation and parts of Ted Lasso season 3. Severance, for example, is good enough on its own for me to pay for the whole subscription.
Making entertaining and thought-provoking original content, without calling their audience sexists or racists when the writing or casting misses the mark, will be profitable and that profit will fund the next wave of prestige tv.
Their 'Infinite resources and big property given to random nobodies'(LOTR) or 'big creators given infinite resources to create a no-name property'(Woody Allen - Miley Cyrus show) both failed. Their big hits have been episode-1-viral TV shows like The-Boys that they could fun risk free or established brain-dead guaranteed hits like The-Grand-Tour.
Netflix & Prime need to start learning from HBO. Running a sustainable subscription business is a tried-and-tested model. But, their obsession with establishing monopoly through loss-leaders means they will never reach monetary-sustainability as long as they're in their 'growth' phase.
This is peak "uber vs lyft" where everyone was getting hyper-subsidized rides while both were bleeding money by the million.
It was kind of ok, but wow it really lacked the polish that many hollywood movies have. It could have just been so much better.
I think nickle-and-diming movies will just lead to the sort of thing amazon is famous for. Lots of product, all of it cheaply made, with very little to differentiate it or make it memorable.
Personally I think there is also money in excellence.
I've had Prime for years and wish the service was bifurcated such that I only get the shipping benefits -- I don't really care for the streaming media part of it.
Citadel is terrible. As though the show runners have no idea what makes a show like that good. Keep in mind that you’re asking people to suspend disbelief. Don’t continually challenge that disbelief. I tried the show, said meh, tried again and turned it off in disgust. Compare to John wick (same target) doesn’t have a great story, but they ask you to suspend disbelief once and then never challenge you again. It’s got character, pathos. Not magical fucking skis.
Rings of power sucked terribly. I remember being repeatedly amazed at how such a high production value show could grab me not at all. The first fight scene was mind blowing. And yet I didn’t care. The ship they sail in the (second?) episode. Gorgeous, wonderful, compelling. I remember thinking. You built this whole unique wooden ship, and actually learned to sail it just to convince me of the authenticity of the scene. Only to throw it away five min later. The story and dialogue? Utter crap. Don’t even get me started on the narration. Bro. Go back to your notes from your first creative writing class. A quarter of the way down the first page you’ll see something that says “Show, don’t tell.” You need to actually sit down and figure out what that means.
What to know how they get maximum bang for their buck? They need someone on each project (with veto rights) who actually knows how to tell a story.
The thing they’re lacking isn’t expensive, but it does take a bit of rigor and someone with the courage and power to say no.
Most Amazon shows seem like cool concepts. But the writing, at times, just seems really "basic cable-y" -- and it's a shame since it's clear Amazon is spending a mint on these shows. But the end result just feels like someone wearing a $12k suit and flip flips. Something just seems off.
Also, Amazon doesn't do nearly enough to advertise shows. They need to get more hype, more people talking about their shows -- they seem to think that ads inside of Amazon are enough. I feel like their efforts are probably stifled since many news outlets are tied to their own entertainment streaming services. "Let's only talk about Disney+ shows..." But like Reddit, and social media in general... they need to do more to get the word out about their shows.
A friend (who is also in his 40s) put it really well when we were talking about the problem with Amazon shows... "They are Showtime when they want to be HBO." They certainly are spending the money to be HBO... but it's not all about money, sometimes it's about time and giving up control to the artists so the artists can do their best work.
Lastly, holy hell this can't be underscored enough, I hate using Amazon Prime Video since they don't have a way to turn off the "buy now" buttons. Like, if I want to have kids or elderly parents on that account... I just want them to see shows that don't cost me money to watch, and Amazon does nothing but layer in ads for shows and services that I have to buy. Among all the streaming services, Amazon is THE WORST at this. And as a result, I don't even want to install it on my parent's TVs for the simple fact that Dad will complain if there are shows on there he has to pay for, and he'll flip out if he gets an unexpected bill -- like to the point he won't feel comfortable using that TV at all, even another app, if he feels it'll bill him. I bet a lot of older folks are in this boat.
I wanted to like "A League of Their Own" -- I loved the movie. But I can't watch the TV show.
It seems like they have spent a lot to make the world feel like it's WW2-era. Except when anyone speaks. All the dialogue and idioms seem pulled from the present.
And, for me, it doesn't seem intentional. It just seems sloppy. And that makes it impossible for me to get lost in the story. Like it feels like all the actors know it's 2023 and could at any minute bust out a cell phone and take a selfie.
Like, "Mad Men" was a great period piece. "Halt and Catch Fire" was also a great period piece. And even "A Knights Tale", or even "Norsemen" was a good sort of modern spin on antiquity. But ALOTO just feels sort of unintentionally lost between the two.
I can only guess the dialogue gets improvised (I can see this being the case given the casting choices and how one of the creators is also one of the actors), or the writers don't have a shared style guide for consistency, or the story editor (or whatever role) is pressed for time.
But the end result is a show that portrayed a world that had no real conflict (since the actors all sort of seem to know it's 2023) and so it just sort of felt like a predictable outcome where everyone just sort of says things that imply, "I know where society is headed!" And I quickly lost interest.
It should not cost so much for a TV show or movie. YouTubers with more views are producing hit after hit with nothing more than an iPhone these days. Directors should streamline their operations with AI, and on-screen talent and team members should be paid an hourly wage that is only time they are actually in front of a camera, delivering value. If they really believe in a project, they can choose to give up cash compensation for the privilege of purchasing options of a TV show. This helps align incentives and optimize risk to capital and stakeholders to do more and deliver faster with less.
Amazon and others should think about relocating production to areas outside of California where the costs are out of control and in a locale where the regulatory environment is optimized for business returns. TV shows and movies need to be evaluated on a quarterly basis and KPI’s should be enforced at all levels. To minimize risk, investment into AI that can be trained to emulate consumer watching behavior is needed and production should be run in a data-driven agile process.
If a show can’t be monetized, it isn’t worth being produced. Entertainment needs to be in the service of moving ad inventory, growing or retaining paying subscribers, or improving conversion of existing profit centers.
For the sake of it not being sarcasm; obviously it's my belief that not everything (especially entertainment of all things) should be seen through the lens of purely making money. I am quite sure there are dozens and dozens of people who will disagree with me -- but it's always been my belief that Art that covers it's own costs and leaves its mark on humanity and history is a much greater success than making money hand-over-fist.
The game industry is really straddling the line with this and has been for quite a substantial amount of time, it's a war between MBAs and creatives, though even Sony recognises the need for creative freedom and does not expect a substantial profit on their games. (though I suppose their incentives are different, great games boost sales of the consoles which gives them greater market share)
It’s funny how something is so bad people won’t even watch it for free.
I don’t think this is a completely correct assumption, but since Amazon doesn’t give viewership numbers (or Netflix or Hulu or hbo) it’s hard to know if a show is successful or popular or profitable.
I’d like to see old fashioned Nielsen rating numbers so you can tell if 1M households watched something and could compare shows.
I’m sure some people watch an episode because the marginal cost is $0 so it’s probably equivalent to an old prime time show on ABC/CBS/NBC that would have high ratings in the beginning and then low ratings in the end. Broadcast tv was free too.
It reminds me of how friends wouldn’t even watch a movie or show on torrents and that would help me understand if a movie is good or bad (with a torrenting crowd) because people won’t even download Justice League and watch it for free.
Anyway, I’ve been surprised at how bad Amazon’s shows are considering their spend. They seem like the anti-AppleTV. AppleTV seems to spend a lot as well, but make much higher quality stuff.
I suspect it’s because AppleTV has a direct cost and budget and want to attract people to watch. And prime video is lumped into Prime membership that is probably pure profit to Amazon and just customers on auto charge year after year, so most don’t even watch video yet they have revenue from 152M US prime members [0] so Amazon is getting $21B/year and may not care about viewership, they just need to spend money.
[0] https://www.searchlogistics.com/learn/statistics/amazon-prim...
>It’s funny how something is so bad people won’t even watch it for free.
By contrast, ratings for The Last of Us on HBO rose steadily through every episode <https://en.wikipedia.org/wiki/The_Last_of_Us_(TV_series)#Rat...>.
It doesn't seem surprising that a very expensive series that doesn't look expensive and at the same time fails to attract a mainstream audience would trigger some scrutiny.
I only keep Amazon video around is because it's free. The only show I watch on that is The Boys. I'm waiting for Netflix to ask me to purchase a second account for my sibling who I share my Netflix account with, and when that happens I'll immediately cancel it. There's nothing there I watch anymore. Disney+ has a slew of failed Marvel shows and I cancelled it early on. Hulu, Peacock and the rest of the services have nothing for me.
The only quality content is HBO that I'm willing to pay $15/month for. I also pay for Youtube premium because no matter how much I try to force the issue, my kids watch Youtube the way I watch TV, so I'd rather get rid of all the ads. Everything else, I will pirate without guilt.
I ask this without irony: is there even anything worth sourcing from the high seas these days? Entertainment has largely turned to crap in my opinion.
Personally, I enjoy comedies and cooking, and those have done right. I’m kind of over the dramatic HBO-style experience.
Hmmm.... I wonder if a comedy series about cooking would bring in viewers? :-)
The "long tail" has moved to the high seas. At least, in my case.
Are you unwilling or unable to pay for the remaining content you plan to consume?
I’ve never understood how flippant HN is about piracy. The entire tech industry is built on intellectual property.
Declining streaming revenue means the expensive, good shows will get cancelled and replaced by shitty, cheap to make reality TV. And then people will moan about how all the good TV they used to pirate got cancelled.
It would be interesting if in the age of “interactive” audiences who freely choose content, if streaming services could try to mix up the relationship. Somehow charge die-hard fans a commitment to a show by serving them ads, perhaps. Something like the ransom model:
https://en.wikipedia.org/wiki/Threshold_pledge_system
In any case, streamers looking at short-term numbers cause them to axe promising shows and cult classics before they have a chance to prove themselves. Which is something network TV has always done, see FOX in the 2000s, but you’d think with interactive technology and evolving formats they would experiment with new ways of going about it. There’s more to running a network than a simple cost-benefit formula.
The content industry’s intellectual property is primarily enshrined in copyright, whose exclusive lifetime greatly outstrips most human lifespans.
It’s not contradictory to be for the first and against the second.
I find it more palatable to be for copyright than for software patents.
The position I describe above is consistent, though. And widely held.
What is the “false scarcity”?
In the music world, basically all music is available on all platforms. I can listen to basically anything on Spotify.
In the Netflix model, it's all exclusives. Everything is spread all over the place.
However, when it comes to movies a TV, that’s not the case. There are many studios around the world and they want to have a direct-to-consumer relationship (for various reasons), vs having no consumer relationship.
Put differently, it isn’t that there’s scarcity of output (in fact, many people complain there’s too much so it is hard to find something great to watch), it is that you (and others) want to have a one stop shop to satisfy all your TV and movie watching needs. But how would that work? Force all content producers to not be able to distribute their work or to have direct to consumer relationships? And then have 1 (several?) companies limited to distribution (and they aren’t allowed to also be studios, must it be country specific or must it be global and what regulatory body would govern that)? Etc.
Instead of complaining about piracy, put your content on all platforms. There's a clear correlation between the return of exclusives and increased piracy. Drop prices/make it more available and you'll displace piracy (there'll be a structural level of piracy always, they can't change that but this is beside the point).
I have a <Microsoft 365> subscription, if you want a cut of that subscription, by all means show your <software> on <Microsoft 365> and I'll <use> it there. Add it to <Google workspace> or whatever too, but I'm not maintaining ten subscriptions.
The entire tech industry is built on free proyects, open source and collaboration. Modern tech is all about walled gardens and patent rent seeking because most modern tech leaders are awful.
See the always relevant xkcd: https://xkcd.com/2347/
However, I am not a pawn to be jerked around. Content comes to me, I don't go to it. I'm not going to search a dozen streaming sites for the thing I want. I'm not going to follow you to another streaming site because you wanted to segregate New Star Trek and old Star Trek into different platforms.
I have paid accounts with streaming sites. If your content isn't on it, that's on you for opting out of being paid.
I can’t think of any industry that works like that. I can’t buy a new Toyota at a Chevrolet dealership. If my local Target doesn’t carry something, I have to go to another store. Even Amazon, as expansive as their selection is, doesn’t carry everything.
If I subscribe to National Geographic, it doesn’t mean I can grab this weeks copy of Newsweek from the local news stand gratis.
(One wonders if the the first sale doctrine which allows public libraries to check out e-books can also be applied to streaming media- perhaps Apple or Amazon can cut a deal with libraries for them to buy up episodes of shows which then can be borrowed by cardholders!)
That's absolute bullshit.
Companies used to provide detailed schematics. Source code was shared freely by manufacturers. Micro-soft (when they had the hyphen) was one of the first to push for this change and responsible for making things "closed", writing letters to people asking them to stop making unlicensed copies of their Basic compiler.
Also, like it not, companies like Microsoft drove the tech industry forward during the eighties and nineties because of them creating an industry where software has its own monetary value independent of the hardware it ships with.
Even open source as we know it would not exist without intellectual property laws. The GPL and similar licenses are only enforceable because of copyright.
Much like Big Tech, I would be happy to see the complete obliteration of Hollywood.
* Purchasing a show on Google grants me a license to stream it from their servers using their clients. If they ever lose the license, I lose access to my content. For some reason I can't just download an mkv file with the movie I purchased.
* If I stream Netflix, I am limited to 720p on linux (drm)
* Netflix only works at 1080p on my 4k TV because it doesn't support the latest form of DRM
In all of these cases I am being given a sub-par experience despite trying to legally acquire the content, and for what gain? The content is still getting pirated..
In your own profession, are the customers entitled to the fruits of your labor free of charge if they don’t feel like paying you for it?
We've now moved to a carousel of rotating subscriptions between Hulu, Disney, HBO, Peacock, etc. It's much cheaper although annoying to manage.
The only streaming services we haven't cancelled have been Prime and Apple TV+, mostly because they are free as part of bundles.
Apple TV+ has had the highest number of favorite shows for us, and has easily been the best value. (Prehistoric Planet, Tiny World, Severance, Silo, Black Bird, For All Mankind, and many others).
And considering the way they canceled Prodigy, I do wonder how long SNW will last.
If you don’t watch anymore, like you say, then why have a subscription at all?
They aren't doing a very good job then; I had not heard of ANY of the shows they list in the article.
Unfortunately it's a culture and branding problem which I don't think Amazon can fix.
Had Amazon named their service something unique, and announced it as some sort of bonus subscription you get as part of Prime (or something you can subscribe to separately), I wonder if more people would watch. It would also help separate the streaming platform from the concept of “Purchase a movie through Amazon.”
Seems like they are going backwards or current CEO doesn’t have the backbone to make it happen.
It seems like lately a lot of our CEO's decisions lack backbone or conviction. It seems like he go the role of CEO by yes-maning Bezos (See brain double quote here: https://www.nytimes.com/2021/02/03/technology/andy-jassy-ama...)
A lot of the decisions made by our CEO lately have been justified with "not invented here" logic. Announcements for both RTO and layoffs have been justified with "other leaders are doing it" statements. Unpopular decisions (like RTO) are made days after a public forum where our CEO could have announced it.
For sake of argument, I’m assuming Jeff Bezos decided who to succeed him.
Your observation would imply that you think Jeff Bezos made a poor decision. He is often lauded for his insights and good decision-making, but of course that doesn’t mean one is infallible.
Do you think his choice was wrong and he made a mistake?
rto not even top 3 company problem though. main issue is fast pace culture that had its own problem with retention now turned into lazy, cancerous zombie.
-performance bar lowered at all levels.
-management layers overrun by hires from failing companies.
i left after 10 years. tech stopped hiring innovators. it simply h1b wagon..people who do exactly as told because they afraid of PIP and having to move back to india. the other class of worker is a politician from some company like ibm. from ibm, they bring EXTREME culture of politics and empire building.
my theory that amazon leadership know this biggest business risk. any rto policy to get these people to quit without severance. amazon leadership know problem so bad they will risk strong talent.