“We turned what had become a producer’s medium back into a director’s medium,” Iger boasted in 2019, “where the stories we’re telling typically emanate from directors’ hearts and minds.” And if that $105.9 million TV show that you greenlit exclusively for a $7.99 per month streaming service somehow fails to turn a profit? “You have to figure out how to process that; you don’t want to wallow in failure. You have to say this is a business and move on.”
Not being as well-versed in business stuff as Iger and his fellow Hollywood CEOs, I have to admit I scratched my head a little when Netflix shelled out $200 million for the Russo brothers’ spy film “The Gray Man,” and when Amazon later greenlit the Russo brothers’ $300 million spy series “Citadel” (really, the Russos have done very well out of this) shortly after spending $715 million — or the equivalent of 5.1 million annual Prime Video subscriptions — on a lavish “Lord of the Rings” TV show.
From a layman’s perspective, it was difficult to see how any of these shows or movies were ever going to turn a profit without the ad revenue that comes with traditional TV or, in the case of movies, a theatrical run at the box office. But the studios seemed confident in what they were doing, and when the COVID-19 pandemic arrived, streaming suddenly seemed like a very smart investment.
Three years later, though, it looks like the layman’s perspective may have been the clearest view. As of Disney’s latest earnings report (via the New York Times), Disney’s streaming losses since 2019 add up to $11 billion. In 2022, Netflix was the only streaming service that turned a profit. Now, studios are pivoting from “go big or go home” to a new business strategy: go home, and then burn down your home for tax purposes.