Netflix Broke Hollywood But, Then, Hollywood Had It Coming

The end of the pandemic means entertainment can finally get back fully onto its feet and start entertaining us. For Hollywood however, getting back onto its feet is already proving a challenge. That’s because what Netflix had started to break before the pandemic slammed into Hollywood, the pandemic finished breaking for good. If you now subscribe to HBOMax, for instance, you’re part of the whole new way the entire entertainment business must think of itself, its products, the audience and how to satisfy that audience with its products. Not only does your HBOMax give you access to HBO’s content, it gives access to the Warner Bros Studio (part of HBO’s larger family) who, as of now, will be releasing all their feature films to HBOMax on the same day they release them to theaters. This is important because it means one of Hollywood’s biggest studios sees that an end to the feature film exhibition business is in sight and this distribution model is probably going to replace it. Sorry, folks, but movie theaters will be where we go to see super hero movies, giant action and sci-fi movies and maybe the occasional musical (a la “In The Heights”). Event movies will be what we think of as “movies”.

Everything else will come to us via our TVs, our computers, our smart phones and our tablets — where they’ll stream to us whenever we want.

THAT idea — streaming — landed via Netflix.

Streaming disrupted TV viewing the way Napster disrupted how we acquire and listen to music. In Napster’s case, it provided a way to file-share music. Instead of everyone going to a record store and buying their own copy of an album, Napster let one person (having bought the music) share it with the world. Good for the world (if they like that song), bad for everyone who created the song and hoped to live off the royalties it would generate from people buying it. Back then, musical artists made their money via record, tape or CD sales. They toured in order to support their physical releases. Any money made touring was gravy. File-sharing destroyed that paradigm. In very short order, the whole music business flipped on its head. Album & CD sales having tanked (and, with people more and more buying songs rather than whole albums), musical artists turned to touring to make money, using their CDs, downloads and physical products as the “cost of doing business”.

TV in America, prior to HBO and then Netflix, was always driven by a number rather than by any storytelling idea: 65. Back in the day, the entire television business was built upon syndication as the profit generator. Syndication is when a show, like “Friends” gets sold to a broadcaster (often local) who wants to fill a recurring slot in their daily broadcast schedule. Say, every week day from 5:30 to 6:00 pm just before their local news broadcast begins. Those blocks can be very profitable for a small broadcaster. It costs them relatively nothing and they sell the advertising time to whoever they can. The TV ratings companies organized these syndication periods into “blocks of time” that they published as “ratings books”– periods of 13 weeks that measured how much audience any show got. Thirteen weeks of shows times five shows a week equals 65 episodes.

For a show to reach syndication then, it had to be able to generate a minimum of 65 different stories. That’s 65 different variations on the same theme. The Big Three Networks and Fox had two on-air “seasons” to fill each year: a fall season and a spring season. That’s why network orders were usually in the 22 – 25 episodes range. That’s a lot of air time to fill with non-connecting story. Roomfuls of writers rack their brains to fill that time. Frankly, from a creative perspective, it’s back-breaking. It’s simply impossible (with all the time and money pressures) to create 22 great shows per season. When I did Tales, our seasonal orders were for twelve episodes. Of that twelve, two or three would be excellent Two or three more would be very good and the rest would be mediocre if we were lucky. On orders of 22? The numbers break exactly the same.

For comparison’s sake: the BBC paid for its shows via TV license fees paid by viewers. That was their production fund. They did not even think of syndication. That’s why there are only, say, six episodes of great British shows like “Fawlty Towers”. They made as many as the idea warranted and then, most of the time, they stopped. Yeah, sure, some shows ran a season or two past their prime (“Ab Fab” comes to mind), but, for the most part, English shows rarely jumped the shark because they never had the time.

People who watch shows in syndication aren’t necessarily watching them in sequence which makes syndicating a continuous story pointless as too few viewers would be able to follow it that way. Consequently, syndication forced storytellers to avoid any sort of serialized storytelling whatsoever. There might be some sort of character evolution over the course of a season but it wasn’t going to be any sort of “arc” that altered the character profoundly. They sure weren’t going to die in a Red Wedding in the middle of a season.

This meant that if you wanted to try and sell a TV series, the idea had to be non-serialized and broad enough that you could think of at least 65 different ways to tell what was, more or less, the same story. If you stop to think about it, what audiences tuned in for back then wasn’t a show where every episode was a different watching experience, it was all the exact same experience from week to week. The sameness and lack of evolution was the whole point — and that was the engine that drove HOW anyone thought of TV and what might make a good, salable TV show concept.

Good quality TV shows are expensive to make — especially if you have stars attached to them. The license fee NBC payed to broadcast each new episode of “Friends” did not cover the full cost of making the episode. It didn’t come close to paying the six stars salaries. To offset those costs, each TV production was obligated to find a “deficit partner” who’d take a risk — gambling that the ownership they acquired by cash flowing the unpaid for part of production would pay them back handsomely when the shows finally reached syndication.

The wheels started to come off the TV syndication wagon when HBO turned from being strictly a broadcaster of recent feature films to a provider of original content, too. HBO’s business model didn’t require syndication to pay for a show’s production costs. HBO did that. Working for HBO (as I did when I made Tales From The Crypt), didn’t pay as well as the networks but then, at HBO you were creatively free while, at the networks, you weren’t. As we finished production of Tales, HBO (and Showtime) were beginning to put their shows up for Emmys. In their minds, they were now openly competing with the networks. Being unrestricted by network standards, creative people (as I can attest) began looking to premium cable as a preferable outlet for their storytelling. When AMC let Vince Gilligan stay true to Breaking Bad’s bad self, even basic cable was going places — with serialized fare — that CBS, addicted to closed-ended, CSI-type shows, would never, ever do.

But, HBO and Showtime and AMC all still released their episodes conventionally, one-a-week. Netflix threw that idea away. When Netflix released the entire first season of “Man In The High Castle” on the same day, refusing to string its audience along while also allowing them to watch the however they wanted — in bits and pieces or in one, big, streaming bite.

Hello, disruption.

This is not a small thing. From a creative point of view, how you think of a close-ended, syndication-friendly show that needs a minimum of sixty-five variations is entirely different from how you tell a ten-part serialized story that plays out over the course of one season.

To be fair, Hollywood’s never wanted to play by anyone else’s rules. One of the reasons the film business started in Los Angeles (apart from the weather) was its remoteness. Before the transcontinental railroad reached LA in 1876, it was “an unremarkable settlement producing wines and brandy along with meat, hides and soap from cattle.” When William Mulholland arrived from Belfast a year later in 1877, a mere 9000 called the place “home”. While LA’s population would surge to 300,000 within thirty years, it wouldn’t become “Los Angeles” until Mulholland’s vision for the city — fueled by water he was going to steal from the Owns Valley to the north — came to fruition. The truth is, LA should not be a major city; it doesn’t have enough water to sustain it. When the film business landed here in the first decade of the 1900’s, just before water started flowing through the aqueduct Mulholland was building for the city of Los Angeles, LA was still hard to get to and, considering the size of the space, unpopulated.

When the film business started, if you wanted to be IN the film business (what little of it there was), the first thing you needed was a camera. That meant you needed one of Thomas Edison’s kinetoscopes. Edison wasn’t in the business of giving away his inventions for free. If you wanted to use a kinetoscope to make a movie, you needed to pay a license fee to Edison. That license could be expensive. Some clever burgeoning movie makers found a way to get ahold of kinetoscopes. Not wanting to have to pay for them however (Edison had ways of finding out and hunting people down), many of these renegades headed west, settling in Los Angeles because it was remote, hard to get to and, for a little while anyway, safe from Edison’s reach.

In the end, Edison caught up with everyone.

It’s a strange but glorious time to be in the TV business. Disruption is everywhere. So is hyper-creativity. Back when the networks ran things, storytelling was limited to likeable characters sailing through predictable situations. A character like Walter White could NEVER have made it past standards and practices intact. Everything that made Walter great would have been watered down so that he always stayed likeable. The networks could never have imagined a “Fleabag“. They would all have called security on Phoebe Waller-Bridges if she’d walked in the door to pitch it to them. Even “Fleabag” owed its ability to push the envelope to Netflix’s impact on the entire storytelling environment.

Netflix — by destroying syndication — reinvented storytelling. The death of 65 as an organizing principle meant storytellers were now free to just tell their stories as fully and as faithfully as they wanted. We can all see the result: TV has never been this good, not just in America, but across the world. What’s even better? Netflix has internationalized the whole TV-viewing experience. It’s made shows that, by all rights, should have been happy to be moderate successes inside their own countries full-on international successes. Take Netflix’s “Schtisl” about a Chasidic family in Jerusalem.

Back when I started in the TV business, everyone’s goal was to get a show “on network”. That’s how you’d know you’d arrived: you had a show on primetime on ABC, CBS or NBC. I was happy to have “Tales” on HBO but I knew it wasn’t the same as having “Friends” on NBC. These days? The thought of selling a show to any of them would feel like defeat — like the idea I had simply wasn’t good enough. Or big enough. Or worthy enough…

For Netflix.