How streaming upended the TV industry

Make Me Smart May 16, 2023 Transcript

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Kai Ryssdal 

Hey Everybody I’m Kai Ryssdal. Welcome back to Make Me Smart, where none of us is as smart as all of us like we like to say, get that word out of my mouth.

Amy Scott 

I’m Amy Scott. And I’m Amy Scott in for Kimberly Adams. Thanks for joining us on this Tuesday. It’s May 16. And it’s time that we dive deep into a single topic. Today that topic is streaming, the economics of the streaming industry.

Kai Ryssdal 

So with an eye on the writer’s strike and what that has meant and where it has all come from, we’re going to talk about how streaming has changed the way your favorite shows get made, how writers get paid, or perhaps don’t, and what it all means for the future of this industry of which we all partake to some degree or another, especially everything that’s given that’s happening with AI. That’s a huge part of the strike. Here to make as smart as Kate Fortmueller. She’s a professor of Entertainment and Media Studies at the University of Georgia. She is also the author of the book “Below the stars: how the labor of working actors and extras, shapes media production.” Kate, welcome to the program.

Kate Fortmueller 

Thanks for having me.

Kai Ryssdal 

Okay, so look, let me start you off with a biggie. Given the writer’s strike and what we’ve all been hearing about AI and many rooms and how what we have now on streaming are shorter seasons with longer episodes, but no more of this, you know, 22 episodes of 22 minutes a piece with ad breaks all that jazz… has streaming broken television?

Kate Fortmueller 

That’s a very provocative way to put it. Well, I think it depends on the perspective that you are taking, I think for audiences, many of us would say that it’s made television better. But for writers, I think, has it broken television, is maybe a fair assessment?

Kai Ryssdal 

What about for studios? Sorry, let me just slam in here and ask the third part of that Trifecta there. Right? Audiences, writers and, and now the studios.

Kate Fortmueller 

Well, well, I think, again, that depends on the perspective that you’re taking. I think if we’re thinking about studios and networks that operate on these kind of older models, right? Television used to operate on an ad based model, and then move to a subscription model. And then Netflix has moved to a minutes watched model. I think for the legacy networks, they’re still trying to really figure out how to make this as profitable as the broadcast, mass audience, ad based model. So I guess the I would say the answer to that is kind of complicated. I think everyone sees a lot of potential. The question is whether or not it can sort of live up to that potential.

Amy Scott 

So Kate, from a viewer standpoint, a subscriber standpoint, it seems like there is so much out there to watch. I mean, this has been called the “golden age of television” or “peak TV”, it would seem like there are plenty of opportunities for writers. So why do they say they’re having trouble making a living doing this?

Kate Fortmueller 

Well, you know, we are we are in a moment of peak TV. The number of shows have been continually going up since 2009. So there are lots of shows. But lots of shows doesn’t necessarily translate into a full year of work for individuals, right? So somebody might get a job for a show that is sort of a short season, and then might be under contract with that show even if they’re not getting paid for a certain period that is extended from that. Or they might not have the kind of experience to then get them on another show. So they might have longer breaks. So really, what a lot of these writers are experience, experiencing are shorter periods of employment.

Kai Ryssdal 

I wonder if if we ought not point out here that while times have changed for the big streamers, Netflix, of course, and Disney and all the rest of them. They’re still making boatloads of cash.

Kate Fortmueller 

They are making boatloads of cash. They are always making boatloads of cash right? And part of what they are always trying to do is kind of increase those margins right. I think the other thing that we kind of haven’t brought up is when we’re talking about these models. One of the really big changes is that streaming operates on a global model. So they are really looking at this as a global business and thinking about their global subscriber numbers. And that really does change the kind of picture when we’re thinking about how are writers then getting paid for, you know, subscriber growth in Spain. The answer is, they’re really not right.

Amy Scott 

Kai mentioned this up top, but can you talk about the mini room? This is getting a lot of play in the conversations about this strike. What is the mini room? And what do writers say is wrong with it?

Kate Fortmueller 

Yeah, so the mini room, and I think there’s… the WGA has kind of has released what they asked for when, when negotiations were happening in May, what they asked for, and then what the alliance of Motion Picture and Television producers countered with. So mini rooms, if you look at that chart are also termed like “pre Greenlight rooms.” So essentially, what these streaming services are doing are bringing in writers to map out the entire season before the show has been greenlit. So they’re getting a lot of writing work from them that’s not tied into kind of episodic stuff that will come later. So what they’re doing is sort of like hiring a team to do something else, and then not necessarily bringing as many people on later. So this is really kind of upending the structure of the room and the number of people who are getting paid on any given season.

Kai Ryssdal 

Just continuing with that thought, how valid do you think the position by the Writers Guild is that what’s at stake here really is writing as a profession? As an absolute professional, you can make money out of.

Kate Fortmueller 

I think, I think that’s very much like an accurate statement. I think that this is… I think that there’s a lot of things that have kind of shifted in terms of, I think one of the things we can kind of think about is the rise of this term showrunner. Right. I think if you think back right, there were there were like, they’re just so few kind of names that you knew associated with programs that you loved, right. But this idea of the showrunner as kind of an author is also something that’s kind of moving people away from thinking about television as a collaborative medium, which it very much is right. I think there are many shows, writers rooms that organize their credit in different ways in terms of who gets credit for an individual episode. Some episodes of television are really written in a collaborative fashion. So the number of people that are in the room are often really essential to that creative process. This is also I mean, you know, it’s not physical labor, but this is labor that makes a lot of money for a lot of people. And it is an art form, it is something that you hone over time, people get trained in these rooms, they learn a lot by being in the room with experienced writers, and shifting all of this is making this much more casual right? That people aren’t necessarily getting trained up in the same way. So if we want, I mean, if we want great television, which we have been enjoying, right, we’ve been enjoying many, many seasons of great television. But if we really want that to continue, we need to, we really need to think about the structure of these rooms and support writers as they try to get fairly compensated.

Amy Scott 

So can we address the elephant in the living room, which is the the rise of AI and generative chat bots, the… I understand this may be the first industry to really get some protections written into their contract if they’re successful. The Writers Guild says, you know, they want AI to not write or rewrite anything, be used as source material. And I thought this was really interesting, also, that their content can’t be used to train AI, which is interesting. How successful do you think they might be?

Kate Fortmueller 

I mean, I was gonna say, as a as a scholars, we don’t always like to predict. It does put us in a kind of scary position. I guess what, in terms of how successful I don’t… Yeah, I hate to say this. I don’t know if this is going to progress if there isn’t some sort of conversation opened up about AI. I don’t know that as is the case with any negotiation, are they going to be able to get the AMPTP to agree to all of the things that they want to kind of be in the contract? Probably not. But this… look, this isn’t going to happen next year. AI is not ready to start writing our television shows in 2024. But the writers have to get this into their contracts so that they have a seat at the table when this becomes, when the technology improves when this becomes a serious issue in 5,10,15… however, however much time it takes. This needs to be in their contracts, so they have a place to start bargaining from. So this is part of, you know, their particular contract. So I think it needs to be there. I think they’re very clear that it needs to be there. There’s been a lot of referencing to the 2007-8 strike, where the writers said that, you know, the studios were saying, “Oh, we don’t know how profitable the internet, is going to be.” Right. And fast forward to 2023, we know that streaming is quite profitable. So they need to be ahead of the game, they need to get something in now even if it’s not necessarily going to be as expansive as they probably want it to be.

Kai Ryssdal 

So let me just go back to where I started as sort of a way to to bookend this thing. So so not, you know, did streaming break television. But do you suppose there’s a recognition that we’re never going back? That that streaming is now the way it is, and the business model has changed?

Kate Fortmueller 

Well, Netflix introduced an ad supported tier this year. So it’s hard for me to say that the business model has totally changed. What we’re seeing is a return to some of those legacy models. I think one of the things that I don’t think is going to change is the kind of reliance on these shortened seasons. I think those those are kind of here to stay and ultimately, mini series have always been kind of a model that television has used, but on streaming, I think for the consumer… You know, we have a lot of television to watch and I don’t know about you, but sometimes when I’m deciding do I want to start this show that I haven’t seen that’s four seasons, versus this one’s that six episodes, I’m oftentimes inclined for the kind of more instant gratification, finished the show, feel like I’m kind of caught up. So I think there’s some appeal, at least for audiences to keep having those shows and they allow streamers to continue to drop something constantly right. Every week something new. So I think that is here to stay. But those old models, the ad model was quite profitable so I think people always look back when they’re trying to problem solve. It’s hard to really shake some of things that were making money for many decades.

Kai Ryssdal 

Alright so look are y’all caught up on Succession? Because that’s a quick four seasons it goes really fast

Amy Scott 

No spoilers Kai. No spoilers.

Kate Fortmueller 

That is, that is the show that in my house we obsessively, obsessively wait for on Sundays. So yes.

Kai Ryssdal 

Same here. Same here. Kate Fortmueller is a professor of Entertainment and Media Studies at the University of Georgia down in Athens. She’s also the author of the book “Below the stars: how the labor of working actors and extras shapes media production.” Kate thanks a lot. I really appreciate your time and your expertise.

Kate Fortmueller 

Thank you for having me.

Amy Scott 

Thank you, Kate. I’m still on season one so we can’t even talk about it.

Kai Ryssdal 

Are you? Amy Scott! Just take a weekend. You could be all caught up.

Amy Scott 

I want to support the writers here but I’m like I have such a backlog of TV, I’m not going to notice the strike for some years.

Kai Ryssdal 

Oh man. If you happen to be, by the way a writer on strike, or if you’ve been impacted, or you’ve got thoughts about the direction the streaming industry is headed? Let us know. We want to hear from you. Our number is 508=827-6278. 508-UB-SMART or you can email us makemesmart@marketplace.org. We are coming right back.

Kai Ryssdal 

Alright on the topic we were just talking about Amy Scott has some news. You go first.

Amy Scott 

Yeah, just a little more follow up on the writers strike. I read a piece by Megan McArdle in The Washington Post today about the potential lasting impact. And she pointed out that during the last strike, which lasted 100 days in 2007 and 2008, the cost to writers and other workers from missed work was estimated to be $772 million, more than $2 billion in damage to the broader California economy. Of course, there were long term gains for writers like the union got jurisdiction over what was back then called “New Media,” aka writing for the internet. But one thing I haven’t been following this closely, but you may have seen others say that one thing that the strike gave rise to of course, was reality TV got a big boost, because it’s unscripted, which gave a big boost to The Apprentice franchise at a time when it wasn’t doing so well. And Megan, and others say kind of, you know, it was part of what boosted Donald Trump’s profile and paved the way for his successful presidential run. So don’t blame the writers. Some people push back on how big a deal that was, but kind of interesting side note or footnote to the story.

Kai Ryssdal 

Yeah, I totally buy it. That was the big deal, by the way, without without that, the history of the country would be completely different. Okay, mine is a little more nuts and bolts, and it’s an earnings report today from Home Depot, which I stole out from under Amy Scott. So I apologize for that Amy. But you know, I was up early what can I tell you?

Amy Scott 

Early bird gets the worm

Kai Ryssdal 

That’s right. Home Depot, of course, the big you know, home supply and goods store said today, “annual sales are going to decline this year for the first time, in more than a decade as consumer spending tightens and demand for home renovation projects continues to soften.” For those of you who are in the “not a soft landing, but there is actually going to be a not small economic slowdown,” this is one indicator in your favor. And Amy through a really helpful graph, actually, in the rundown, from the Center for the… Joint Center for Housing Studies at Harvard. “Home remodeling market projected to contract” that is to say shrink, not just slow down, but actually shrink by 2024. By like a lot, by like 3% over the follwoing year. So I actually still wonder how we can have a recession when unemployment is at 3.5, whatever it is percent, but this is a sign that maybe it’s coming anyway. I don’t know. I don’t know.

Amy Scott 

Yeah, and just one note about this is of course, a lot of home improvement takes place when homes are bought and sold. Because you’re either fixing it up to sell or you’re fixing it up after you buy, you know, a fixer upper. And and there’s just not a lot of buying and selling of houses going on because of those higher interest rates. So this is kind of the predictable and to what had been like a decade long boom in home improvement spending, though with more of us staying in our houses because we can’t move anywhere or you know, we don’t want to give up our low mortgage rates for six plus percent. There is gonna be still, I think some demand for for fixing up the old house rather than moving.

Kai Ryssdal 

Yeah, for sure.

Amy Scott 

All right, that’s it for the news fix. Let’s do the mailbag.

Mailbag 

Hi Kai and Kimberly. This is Godfrey from San Francisco. Jessie from Charleston, South Carolina. And I have a follow up question. It has me thinking and feeling a lot of things.

Kai Ryssdal 

All right, we were talking last week Kimberly and Drew and I, during half full/half empty about Wendy’s using AI to take drive thru orders and we got this.

Andrew 

This is Andrew in Houston. I called a pizza chain last month to place an order and was absolutely floored when the traditional robot menu transitioned into a seamless conversation with what was clearly an AI interface. However, not only did it not have glitches or speech delays, but it understood the nuance of my requests. When asked for garlic on my pizza it asked if I wanted crushed or minced. The overall experience was so shocking I couldn’t help but talk with the employees when I got there. Turns out it’s a third party contractor that’s being run on top of their in house systems. It will definitely be interesting to see what other applications might come about from this revolution. But I for one, welcome our robot overlords. That last part was in case they’re monitoring this already.

Kai Ryssdal 

They probably are. Thank you Andrew. Yeah, I don’t know. That’s a little freaky. I’m just gonna say that, a little freaky.

Amy Scott 

Yeah, totally. That’s scary. I have not had that experience yet.

Kai Ryssdal 

No, me neither. Me neither.

Amy Scott 

All right. Before we go, we’re gonna leave you with this week’s answer to the make me smart question, which as you know is: what is something you’ve thought you knew but later found out you were wrong about?

Melissa 

Hey guys, this is Melissa from San Francisco. I have two young children, ages five and two. And one thing I realized that I was totally wrong about was I would go visit my friends and families that had young kids before I did, and would always sit there and go, “God, how did you let your house get so messy?” And now I don’t know how they even kept it as clean as they did. It’s 9:30 at night, and I’m just starting to do dishes and have so much to do. Keeping your house clean  when you have two young children is magic. And anybody that can do it should be considered a magician. Thank you guys for keeping me company while I do dishes.

Kai Ryssdal 

Totally, totally agree. There can be no shame when there are little kids in the house. Forget it, man. All bets are off. Truly.

Amy Scott 

Yeah. What about when the kids are older? I’m still working on that one so…

Kai Ryssdal 

Well you can tell them to pick up and clean up right I mean, that’s the deal

Amy Scott 

You can try!

Kai Ryssdal 

Yes, you can try. Yes, you can try it is true. That is true.

Amy Scott 

All right. We want to know what you’ve been wrong about. You can leave us a voice message with your answer to the make me smart question. Our number is 508-827-6278 also known as 508-UB-SMART.

Kai Ryssdal 

Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Our intern is Antonio Barreras. Today’s program was engineered by Charlton Thorp with mixing by Bekah Wineman.

Amy Scott 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. Francesca Levy is the executive director of Digital. And Marketplace’s Vice President and General Manager is Neal Scarbrough.

Kai Ryssdal 

There it is. That’s the show.