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Streaming Services Have Finally Run Out of New Shows. Kind of.

April 05, 2021

Every couple weeks during the pandemic, a different friend has asked me the same question: When are we going to run out of new TV shows?

Not yet, I'd tell them. Production had stopped or slowed just about everywhere, so it stood to reason that we'd see the impact on screen. Yet while broadcast networks suffered almost right away, streaming services were in a better position. Netflix in particular had banked a lot of series, and kept telling investors it was not going to reduce its output.

As the pandemic dragged on far longer than any of us anticipated, streaming services reiterated their confidence. Production resumed, albeit in a limited fashion.

Well, the great TV shortage is finally here! Here's some data courtesy Kasey Moore, who writes for the site What's on Netflix:

The number of originals Netflix has released so far this year has declined 12% from a year ago. This might seem slight, but seeing as Netflix ramps up its output quite a bit each year, that decline is notable.

The number of licensed titles has dropped a whole lot more, which reflects other studios pulling their programs back for their own services.

This data is backed up by conversations I've had with people who work at Netflix, who've said since last year that the first and second quarter of 2021 would be most affected by Covid. Netflix shoots most of its TV shows and movies several months before it plans to release them, which you have to do when you are dropping every episode all at once. As a result, it had shot most of its 2020 material. But we're now a year into the pandemic, which means we're seeing the effects of production stoppages from last March. April and May.

This is not unique to Netflix. If anything, Netflix is still in a stronger position than most of it competition.

  • Save for "Generation," HBO Max's biggest releases of March were a new cut of a movie first released in 2017 ("Justice League"), two documentaries ("Allen v. Farrow" and "Tina") and a movie shot before the pandemic ("Godzilla vs. Kong."). This time last year, it had original series "The New Pope," "The Outsider," "Westworld," "My Brilliant Friend" and and "The Plot Against America."
  • Hulu hasn't released much new since last year, though it did release shows for other networks like "Genius: Aretha" and "Mayans M.C."
  • Amazon's biggest title in March, "Coming 2 America," is a movie it bought from another studio.

All of these services have released animated projects, and that is one of a few caveats. Studios have continued to produce unscripted series, animated shows and foreign-language projects at normal clip because they are easier to make. Netflix will release shows from Mexico, South Korea, France and Norway in the coming weeks.

All these services have also plugged holes by buying movies from Hollywood studios ("Bad Trip"), or licensing reruns (like Netflix's big investment in hit Black shows from the 1990s).

But there is no denying a dip in the number of English-language original scripted series, which have been the bread and butter for many of  these services. This quarter, Netflix is offering the fantasy show "Shadow & Bone," a sci-fi series "Jupiter's Legacy" and a sitcom with Mike Epps and Wanda Sykes.w.

Will this slowdown in shows affect anyone's business?

Streaming seems to be growing like a weed right now, but every service is in a slightly different position. Disney+ only releases one show every couple months, and had two Marvel programs to start the year. Hulu's output in the first quarter was slight, but at least it has "The Handmaid's Tale" coming back at the end of April. HBO Max has benefitted from all these new Warner Bros. movies and Amazon's subscriber base has little to do with its programming.

Netflix's top priority is growing outside the U.S., so a steady supply of new product may be all it needs. But investors tend to react strongly to any sign of a real slowdown at home too.

If you happen to have the number of subscribers any of these services added in the quarter, feel free to send me a note. If not, we can all wait until Netflix reports its financial results on April 20. In the before times, the first quarter was always one of Netflix's two biggest. – Lucas Shaw

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Is Comcast ready to invest in Peacock?

Photographer: Frazer Harrison/Getty Images North America

Photographer: Frazer Harrison/Getty Images North America

NBCUniversal is considering pulling its movies from HBO Max Netflix next year, keeping future new film releases for its streaming service Peacock. No decision has been made, but, as I wrote this past week, the outcome of the deliberations will say a lot about Comcast's commitment to Peacock.

Comcast hasn't committed the same kind of resources to Peacock as Disney has to Disney+ and Hulu, or AT&T to HBO Max. ViacomCBS seems to be more committed to Paramount+ as well.

Comcast has the resources to compete. But it would have to make some major sacrifices in the short-term, like the hundreds of millions of dollars it gets for licensing Universal movies. Is the company ready to take the plunge?

Netflix's $450 Million Movie Franchise

The streaming service is paying a reported $450 million to make two sequels to "Knives Out," the popular whodunit.

My first thought: That's a lot of money! But the first movie was a big hit, both in the U.S. and abroad, and Netflix is spending less than the two movies likely would have grossed in theaters.

But here's what I really want to know… Media Rights Capital funded the first one. Lions Gate released it. It was a huge hit. Why is neither one involved in the sequel? And, as Julia Alexander noted, did Netflix buy rights to more than a couple movies? (A TV show, mayhaps.)

The ad market is booming

We usually associate economic recessions with steep declines in the advertising market. When companies need to cut costs, they start by cutting back on marketing.

But the pandemic didn't cause a major recession. And while ad sales ticked down for a few months in 2020, it has already started to rebound. Business is going so well that analyst Michael Nathanson thinks advertisers are about the spend the most money they have since the dot-com bubble.

He credits a four-tiered advertising market that includes TV, advertising-supported online video, social media and search. There are two charts worth looking at from Michael's study:

This is ad spending relative to gross domestic product. It has grown slowly since the recession, but Nathanson thinks it's about to soar. The other chart is where the ad dollars will go. To no one's surprise, they will be spent on the internet.

Radio had a terrible year

Entercom, the second-largest radio-station owner in the U.S., is changing its name to Audacy. The company hopes the rebrand will make its sleepy radio company sexy to a younger generation of podcast-hungry consumers and advertisers.

"We're so much more than radio, I don't use that word now," J.D. Crowley, the company's chief digital officer, told me. Here's why:

The company's sales fell 28% last year despite a presidential election, typically a lucrative time for radio broadcasters. … Most radio experts believe that the industry will never fully recover. "This pandemic has accelerated the shift of traditional advertising to digital," said Craig Huber, a media analyst with Huber Research. "I don't expect radio to get back to 2019 levels."

Here we go again…

Endeavor has filed paperwork to go public. The company owns dozens of businesses including a majority stake in Ultimate Fighting Championship, Fashion Week and its namesake talent agency.

The pandemic wasn't kind to Endeavor, which makes a lot of its money from live events. But its various media deals for the UFC saved its bacon. The most interesting part of this filing? It's adding Elon Musk to its board.

Deals, deals, deals

  • BTS, Justin Bieber, Ariana Grande and J Balvin now have the same management company. HYBE, the firm behind BTS, bought Scooter Braun's Ithaca Holdings for $1 billion.
  • Sony acquired Paul Simon's catalog of songs.
  • Apple led a $50 million investment in UnitedMasters, a music distribution company that's now raised money from both Apple and Alphabet.
  • Spotify acquired Locker Room, a social audio app where fans and experts discuss sports.
  • Hemisphere media is buying full control of Pantaya, a streaming service for Spanish speakers.

Weekly Playlist

I am embarrassed to admit this, but I devoured Matthew McConaughey's audiobook this week.

Also, check out the latest episode of Danyel Smith's podcast, Black Girl Songbook.
 

 

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