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Write Downs, Writers Strikes & The Unwritten Costs of Streaming

Write Downs, Writers Strikes & The Unwritten Costs of Streaming

by Trash Sandwiches

Raise your hand if you have ever been personally victimized by a show you love getting canceled. Everyone’s hands are up? Good.

Now raise your hand if you’ve ever had a show you love disappear entirely from a streaming service catalog.

It sucks! But “Mean Girls” memes aside, this is more than just an annoying change to your nightly plans when you can’t find what you wanted to watch.

Streaming service removals, or “write downs,” are a fucked up system of exploitation created by all your favorite streaming services to hurt the film and TV industry, including everyone from writers and creators, to actors and crew members. And, of course, it is also to the detriment of you, the viewer – All for the sake of money.

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Write Downs, Writers Strikes & The Unwritten Costs of Streaming

Why Are Shows Disappearing?

So what’s happening here? What are write downs and why should you care? Shows get canceled all the time, right?

Well, yes. But shows getting canceled are only part of the puzzle, and it’s the easiest piece to understand. When you think of why a show might get canceled, it’s probably low viewership and/or high production cost.

It makes sense. If a company is spending money and resources to create a show, they want it to be worth it. They want people to watch the show. They also want it to draw in subscribers, which is a primary way that streaming services make money.

Sure, some shows are considered canceled when really they just came to a natural end. The Netflix original “Never Have I Ever” just finished its fourth season, and the show ended with the main characters going off to college. HBO-turned-Max’s original show “Succession” also came to a close after four seasons with a new CEO taking over the Roy family business.

But maybe these endings that actually feel like endings were because the shows knew they were coming to a close. The writers and creators were able to give it some closure. Unlike the show that prompted this article…

A Case Study on “Grease: Rise of the Pink Ladies”

It started, as many things do, with a tweet. A friend shared a tweet lamenting that the Paramount+ original series “Grease: Rise of the Pink Ladies” was not only canceled but about to be removed entirely from the platform, the latest victim in a series of write downs.

In case you haven’t heard about it (and there’s probably a good reason, but more on that later), “Grease: Rise of the Pink Ladies” is essentially a prequel TV show to the “Grease” movie duology. I’ve never been a big fan of “Grease,” mostly because of the problematic messaging around relationships, but it was a crappy-weather weekend, and I was laying low with a dog in recovery, so I figured I’d give it a try. And because I’m a serial binger, “a try” meant binging the entire season. It was 10 episodes at about 50 minutes each, with the finale released on June 1.

Remember that date.

Would I call it my new favorite show? No. But did it keep me engrossed enough to watch the whole thing? Yes. The show combatted a lot of the misogyny from the original “Grease” movies. It had strong female leads, lots of diversity and great LGBTQ+ representation. It touched upon issues of racism, slut-shaming, struggling with your sexuality and more in a way that felt authentic and sensitive.

The show wasn’t particularly popular, and reviews were mixed but not awful. Most praised the visual aesthetic and how it tackled the more difficult topics, and the reviews seemed generally fair. I would describe the show as fun and cute. The songs were a little forgettable, in my opinion, but not bad. I’m a serial rewatcher and I would watch the show again, which is basically my seal of endorsement. I’d also keep an eye out for season two, especially since it finished on a cliffhanger.

But unfortunately, I won’t be able to do any of that. Remember how the last episode came out on June 1? Well, about three weeks later, news broke that the show was canceled and going to be removed. It was gone from Paramount+ within a week of that announcement. As a friend commented on that tweet that sparked it all, “This is a very disappointing way to find out that this show existed, and now I can’t even watch it.”

Licensing & Lots of Money (for the Few)

When thinking about the show’s fate, the big question in my mind was simply, “Why?”

I can mostly understand why “Grease: Rise of the Pink Ladies” was canceled. It didn’t get the best critical reviews or have the highest viewership. But maybe people just didn’t know about it. And by removing it within a month of its release, people will never get that chance.

So why? My initial thought was that, by giving fans a chance to discover and enjoy the show, it may gain popularity. People will want a season two (tie up those cliffhangers, people)! And again, I can understand why they wouldn’t invest more resources in a show that will likely never be a top performer. But streaming services have never been known for giving in to fan demands. Why couldn’t they just leave season one up, even if that’s the end of it? After all, the money to make the show has already been spent.

My second thought was licensing. Generally speaking, streaming services pay to license a show so they can have it on their platform. That’s not always true for original content made by the streaming services specifically for their own platforms, but there are still some of those costs involved. Even when the same company essentially owns something, money still changes hands. A great example of this is how Peacock, a platform owned by NBC, had to pay $500 million for the streaming rights to “The Office” even though Universal Television, a division of NBCUniversal, produced the show.

But licensing and fees are standard expenses, and they’ve been around since the broadcast era. Put simply, the streaming services knew what they were getting into with licensing costs – unlike the writers, creators, actors and everyone else involved in the show, whose residual earnings from that licensing are calculated by a mystery formula that keeps all those people in the dark and a lot of the money at the top.

Residuals can vary a lot based on what kind of show, its success level, a person’s involvement and a whole host of other factors. But the bottom line is that they’ve steadily decreased since the good ol’ broadcast days waned and streaming domination began. There are countless examples, but I’m just going to leave this tweet by Kyra Jones here as one of them.


Write Downs: “You Just… Write It Off”

Blaming streaming service removals on licensing and fees is misguided and, frankly, a cop-out, especially when that money is going to executives in cushy corner offices rather than the people who actually made the shows. So again, we are back to wondering: why is this happening?

Just as David Rose suspected, everything is a write-off. Or, as it’s more commonly called in the film and TV industry, a write down.

In case you’re rusty on your tax lingo or “Schitt’s Creek” references, a write-off is essentially a business expense that reduces taxable income. Most commonly, it’s for things like office supplies and infrastructure, advertising, training and other “cost of doing business” expenses. By counting the value of those expenses and assets against your income, it lowers the amount of your taxable income and, therefore, the amount of taxes owed.

In the streaming world, write downs are when a company reports that the value of an asset (i.e., a television show) has declined more rapidly than anticipated. By reporting those shows at a lower value, that’s a loss in the tax world and, therefore, a tax break. Similarly, by removing shows from a streaming platform, the earning power of those shows is “impaired.” The value of the show decreases even more, and, you guessed it, the company gets more tax breaks.

Streaming Services & Shady Practices

With that in mind, we can start to understand why services are removing underperforming shows, even if we don’t agree with the practice. It saves the company money by avoiding paying licensing fees and residuals, and they save on taxes.

But let’s go back to the example of “Grease: Rise of the Pink Ladies” to see how that plays out in a real scenario.

The show was not a long-time underperformer. The final episode premiered less than a month prior to the show disappearing. Even with a strong advertising campaign (also a tax write-off!), it takes time for a new show to get traction. Not to mention that the show was only released as direct-to-stream on Paramount+.

That may be the fifth-most popular streaming service by number of subscribers, but its 77 million users is paltry in comparison to top-dog Netflix’s whopping 232 million subscribers. Paramount+ is just trying to keep up with the big dogs, both in terms of original content and write downs.

The Write Down Industry

This practice of write downs is happening across all streaming platforms. In May, Disney claimed a $1.5 billion impairment on over 50 shows and movies removed from Disney+ and Hulu. Following the HBO Max merger with Warner Brothers Discovery in 2022, the new conglomerate reported an $825 million write down. It included everything from original and non-original content to things that were still in production, like the fan-awaited “Batgirl” movie.

Now I won’t speculate here on whether streaming services and the parent companies are creating and then stopping projects just for tax reasons (although I may muse on my own). But the endgame is the same.

All the writers, actors and everyone else who was involved in the project and presumably expected to make money after that show was released are not making that money. All the consumers who planned on watching that show and therefore generating money for the folks that made it happen are robbed of that opportunity. The money stays at the top of the food chain, and they get a tax break to boot.

We Are All Fucked

In case you made it to this point of the article but got a little lost in the outrage or tax laws, let me reiterate my thesis.

Write downs are a fucked up system of exploitation created by all your favorite streaming services to hurt the film and TV industry, including everyone from writers and creators, to actors and crew members.

They get fucked over. You get fucked over. Only “Big Streaming” wins.

Why the Strikes Matter

So what can we do to fight the system? Support the strikes.

There is currently one, but probably-soon-to-be two strikes happening against the Alliance of Motion Picture and Television Producers (AMPTP). The AMPTP is the trade group that represents the studios, streaming services and broadcast networks in union negotiations.

What’s Happening With the Writers Strike?

The writers strike, organized by the Writers Guild of America (WGA), began on May 2 largely to protest the low earnings from residuals. Their last strike ended in 2020 with the most recent Minimum Basic Agreement (MBA, essentially minimum wage guarantees for writers). However, that agreement was really only favorable to broadcast television shows, not those made for streaming – In 2020, when broadcast has been declining in popularity for almost a decade.

It’s estimated that the WGA’s new MBA proposal would mean $429 million a year for writers. The counter-proposal is estimated at around $86 million in earnings, or five times less for the same amount of work. And the writers strikes are about more than just money. The WGA is also seeking protections around employment contracts, including adding minimum contract lengths. In other words, job security should the write downs come for their show.

Will There Be an Actors Strike?

On the other side of the camera, actors within the Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) are poised to strike. Those could begin as early as the time of publication (Wednesday, July 12) should agreements not be reached, which is looking very likely.

It’s largely for the same reason as the WGA: a desire for better pay, including getting residual earnings from streaming shows to match those from broadcast. The agreement that was in place between SAG-AFTRA members and the AMPTP expired on June 30, and the new agreement deadline is looming.

History in the Making (& Repeating)

Should they join the writers strike, it will be historic. It would mark the first time since 1960 when both the WGA and SAG-AFTRA were on strike at the same time. And because history repeats itself, that strike was also about residuals and licensing. It lasted 148 days (the WGA strike is just shy of the halfway mark, hitting day 70 on July 10), and a primary focus was the right to earn residuals for television broadcasts of theatrical movies.

In other words, content that was made for a different format and would have paid out the creatives appropriately on the original platform was no longer paying those folks accordingly when distributed in a new format. Sound familiar?

Unsurprisingly, most of Hollywood’s strikes tie into technological evolution, like the rise of broadcast or now streaming. The use of artificial intelligence in screenwriting is also part of the current strike, but I won’t delve into that here.

Support the Strikes

Unfortunately, unless you live near film or television studios, there are not many ways to support the strike. There’s coordination around strike-support resources and the Entertainment Community Fund, which is accepting donations to support folks who the work stoppage has impacted.

It’s not like a usual strike where you could boycott a business (unless we start a “stop the stream” movement). But what we can do is raise awareness. We can talk about the injustice of what’s happening and voice our support for all those within the industry who have been exploited by these streaming platforms, studios and networks. We can stand in solidarity with those on strike or those about to be, whether virtually or in-person.

It’s more than just the write downs that caused your favorite show to be canceled or removed. It’s an exploitative system that has oppressed the livelihoods of an entire industry, one which I’m sure we all value. And it should not be allowed to happen any longer.

I support the strikes. Will you join me?

Thanks for reading! If you like my kind of trash, you can read more here and follow me on Twitter @trashsandwiches.

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