The Hollywood Reporter’s story from last week, about Showtime’s merger with Paramount+, included a brief paragraph about the resultant cancellation of shows that weren’t deemed “core to the strengths” of the new entity “Paramount+ With Showtime,” including the Shailene Woodley-led adaptation of Three Women. The surprising thing: Three Women had already completed production, and was just waiting to be aired.
This trend of streaming services and marquee production houses axing projects that are green-lit and finished, or nearly finished, first drew widespread public attention in the fall of 2022. That’s when Discovery’s acquisition of Warner Media (now Warner Bros. Discovery) resulted in the shelving of the $90 million film Batgirl, an almost complete project WBD wouldn’t even platform on HBO Max, let alone give a theatrical release. Earlier this month, AMC announced it wouldn’t air the second season of the Courtney B. Vance legal drama 61st St., which had already wrapped. And now, Three Women will get shopped around to see if it can find another home.
These aren’t even half of the examples! And all of this has made people who make TV shows and movies quite nervous. “I used to say you can’t safely claim your project has a green light until you’re at least three weeks into filming,” tweeted screenwriter Tony Tost. “I guess I need to change that to ‘You can’t safely claim your project has a green light until you’re at least three weeks into being broadcast.’ ”
But is this actually a new trend? Or has the entertainment industry been scrapping practically-done projects since the dawn of time? We called Matthew Belloni, newsletterist at Puck, host of the Ringer’s podcast The Town, and former editor at the Hollywood Reporter, to ask about the business of it all.
This conversation has been edited and condensed for clarity.
Nadira Goffe: Is canceling an already produced show or movie as new as it feels like it is?
Matt Belloni: Well, that’s a great question, because it gets to the notion of what is “canceling.” There is a long history of what’s called “busted pilots,” and shows that go through a production process but are not ready or never get to the point where they’re air-able. HBO is famous for this—I mean, the best example is Game of Thrones, where they did a whole pilot, scrapped it, and then started from scratch and did it again.
What’s new here is that these are shows that not only had a pilot but had actual full seasons done. I mean, if you look at that TBS show, Chad, that was a second season of a TBS comedy that was in production, and they were just like, Nope, not doing it.
And that show Minx on HBO [which got canceled in December, as the second season was wrapping]—the HBO thing is a unique situation because this is not “busted pilot,” this is full-season, We just don’t want it anymore. And I think that’s relatively new. I don’t want to say it’s never happened before, but it’s definitely been surprising to people throughout the industry.
So we are witnessing a unique trend. What are the commonly held explanations for why this happens? Do you think that those explanations make sense?
The rationale here is slightly different for each company. The thing that HBO was doing last year, scrapping things for a tax credit, that was a very unique situation because the company had been sold. There was a transaction where Warner Bros. Discovery was spun off from the previous owner, AT&T, the Warner assets were combined with Discovery into this new company, and it gave them a year under the tax rules to kind of clean the company up. There are rules that are in place when there’s a sale or a merger like that, where if there are assets that you decide are not on strategy, or that you discover when you buy a company are just awful assets, you can scrap them and get a tax credit for doing so. And they did that a bunch of times. The most famous example was the Batgirl movie, which was a $90 million movie that they decided not to release at all. The Scooby-Doo sequel [Scoob!], as well, where they just said, OK, we are going to take the tax hit here and get a write-off and not do it. So, that’s a unique thing.
What is happening this year, and what is interesting, is companies are just deciding that in the current economic climate, they don’t want to do these shows anymore that they have already green-lit. And we’re seeing this with all the Showtime shows right now … And that just happened at Netflix. Netflix is going through a retrenchment right now where they’re deciding that they didn’t want to make some of these movies that they already green-lit. So they said, OK, we’re going to let the producers shop [The Inheritance and House/Wife], and we will take the financial hit if you get a sale price that is lower than what we paid for it, or potentially break even or maybe even make money. I doubt that! But that’s a way to step back from the previous strategy and also allow the producers of the movies to potentially find a new home for the movies.
Do you think that that’s a smart business choice, considering that they could lose money?
Listen, it’s not ideal for anyone here, but given the economic climate that these companies are facing and the pressure to reduce costs, it’s not a bad strategy. It’s just that it’s really stressful for the creative people.
I mean, there’s this unwritten rule in Hollywood where you can get jerked around on profits and on your deal or whatever, but once a company agrees to make your show or make your movie, there’s always been this implicit promise that you will work together to create the best possible version of that show and then you will release it. And what’s happening now is that social contract is breaking down, where even if they agree to make your show or movie, there’s now this question, OK, will we ultimately get to the finish line?
At what point do the relationships between these companies and the actual talent and creators begin to sour?
This is a marketplace. And for every time someone gets dicked around, there’s another outlet that is saying, Come over here, we won’t dick you around. And presumably that is happening.
The most high-profile example of that is Christopher Nolan, who really didn’t like how Warner Bros. treated his movie Tenet. He was very upset that all the 2021 movies were put on the streaming service—he said HBO Max was the “worst [streaming] service” and they were not treating the talent very well. He had a movie, Oppenheimer, that went to market and everybody had a chance to bid on it. And you knew that Warner Bros. was not going to get that movie, even though they had had a relationship with Nolan [over many films]. He ultimately ended up going with Universal, a rival studio.
It was a slightly different situation, it wasn’t this exact thing where his show was taken off a network. But this is a market, and if you are going to treat talent this way, there’s probably going to be somebody else who’s going to say, Come over here. It’s a better place. This is an industrywide problem right now, though, that a lot of these companies are suffering through basically a content or a streaming recession. So there’s not a lot of choices for outlets that aren’t going through this.
The ones I would say that could benefit here are the streaming services that are not attached to legacy media companies, like Amazon and Apple. They don’t even have to make money on content—they have other businesses that fund the whole party. So what we’ve seen over the past year or so, and I suspect that will continue this year, is Apple and Amazon are going to bulk up. They’re going to go to these stars and say, Listen, come over here. We’ll pay you your fee. We’ll do your full-freight project, and you won’t have to deal with the nonsense that you’re dealing with all these other legacy companies. That’s what I suspect the pitch is, and it’s working. We’re seeing one after another, Apple and Amazon landing these big projects.
But I will say HBO is still HBO. It’s not going to lose projects just because they’re going through a tough time financially right now. I still think that it’s the marquee place for talent, and Netflix is the same. Netflix will still shell out for stuff that they care about. It’s just the madness of the past five years, where these companies were outbidding each other and it was a great time to be a creator—that’s over.
Is this something that agents, management, and actors are going to start thinking about when they sign their contracts?
I mean, good luck to them. They could try to put in language that said, You owe us a bunch of money if you scrap this before the end. There’s only so much agents can do when they’re negotiating.
What about the guilds and unions?
The guild certainly would love to prevent the disappearance of shows, but that’s really tough. That is a really tall order, because that’s telling a distributor that they can’t do what they want to do with content that they have already paid for and produced. You can get better pay, you can ask for fees if this stuff happens, but the tradition in Hollywood has always been that once the show or the movie is bought and paid for, it’s kind of up to the distributor to figure out how they want to make money on that. The guilds require you to share in the revenue, and they’re always going after new ways to get more money out of that. But to say, You can’t sell this overseas, or, You can’t take it off your service when you want to take it off, that’s going to be really tough.
Do you think that avoiding paying residuals is also an incentive for these companies to shelve these projects completely?
There is another trend right now that we should talk about, which is the streaming services just taking things down, taking things off the service. And that’s a separate issue, because for the past five years or so, these companies have tried to hoard all of their content on their streaming services. The library of everything they’ve ever done has been on the streaming service, and that’s where you can find it. Now, there is this movement to sell stuff off. We’re seeing HBO content now being sold off to Roku and Tubi, and that’s something that HBO hadn’t traditionally done. Now, there have been exceptions, but particularly in the past five years, the strategy was to put everything in one spot and build up the library so that the streaming service would be the most attractive product and everyone would subscribe.
Now, trying to get more money out of these companies, they’re saying, Listen, this is valuable content. We could license it out. And by the way, all of these shows that are just sitting there on the streaming service, we have to pay for that because we have to pay residuals and profit participation to all of these people that made these shows. So they’re saying, OK, well, if nobody’s watching some of these shows that are sitting on the streaming service—and they have the data, I don’t, but [their moves] suggest that a lot of these older shows are not being watched—why don’t we just take them down, find out if there’s a market for these shows? And with some of them, there is. Westworld is a perfect example. Westworld is now going to be on Tubi and Roku, and that’s something where that was a show that was sitting there on the HBO Max service and presumably not generating a ton of money, and now they’re going to make money on it. But for a creator, that can be a little jarring.
It’s not just residuals, it’s profit participation as well. Residuals are somewhat different in that those are guild-negotiated. Profit participants are negotiated by an agent or someone else, where certain talent will get a percentage of revenue and different platforms, and that’s above and beyond what residuals are. So there’s two separate things. Profit participation can be very lucrative to certain people. You can look back at what happened when The Office sold to NBCUniversal Peacock, that was a massive deal. And Greg Daniels who created The Office US, he shares in that.
There is an incentive to save money on shows that are not being watched very much, so they want to avoid paying out money on shows that people aren’t watching. That’s plain and simple.
I should say that part is not new. The history of the television business is windowing, meaning your show airs on the network and then after that, it goes on a journey. It goes to syndication, where you might find it on your local affiliate, you might find it on cable, you might find it on a streaming service, you might find it overseas, packaged in a library that is sold to broadcasters around the world. And that’s always been how television makes money, ultimately.
It’s only in the past five to seven years where these companies have said, No, no, no, we’re not going to do that. We’re going to create a global streaming service where all of this stuff is going to live in one place. We’re going to sacrifice all of that money that we used to get from the overseas syndication and linear TV and we’re going to hoard it all on the streaming service. And that is going away. We’re going back to a more traditional television business, where you will find these shows everywhere or nowhere. Maybe there’s no market for it and it just doesn’t go anywhere and they just save money that way.
Do you think that this will change the type of content that’s being made in that more people will try to create shows, like, say, the 30-minute sitcom that could be easily syndicated?
It’s funny, it’s actually been the opposite, where the serialized drama has been so prioritized on streaming, that that’s what people have been trying to do. I don’t know if there’s going to be a wholesale shift in what’s made because of this. I do know there’s going to be less of it. There’s just going to be less volume. I mean, we’re already seeing the brakes being slammed on all this stuff. So the era of Peak TV, we’re going to see come down significantly.
What do you think TV watchers should expect will happen? Should we be worried about this trend?
Listen, anytime you make less content, the chances of your favorite show not getting made are increased. The Queen’s Gambit is a perfect example. Netflix would not make that show today. It is such a weird show that by quirk became a huge hit: a chess drama with an unknown star, that’s just not something they would do today. And that’s the risk. Any time you’re decreasing the diversity of voices that are being made, [it’s less likely] that your favorite show will be made.