The Business Behind Streamers Removing Shows

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Streaming is not forever. 

When streaming services were initially introduced, I had high hopes that they would revolutionize the experience for movie enthusiasts. In my innocence, I believed that every film studio would make their complete collection available, granting us unlimited access to a vast array of content.

However, reality has proven to be quite different from my initial expectations.

Instead, we have witnessed streamers frequently removing titles without any discernible pattern. They often take content down after a while to mitigate expenses or purposely withhold availability for extended periods to avoid paying residuals.

The motivations driving these streamers are multifaceted. Primarily, they strive to secure licensing agreements for popular content in order to attract viewers. This is evident in the example of “The Office,” which transitioned from Netflix to Peacock, and “New Girl,” which shifted from Netflix to Hulu. Companies continually seek out older television shows and movies that they can acquire at a substantial cost, only to broadcast them for a limited duration.

To bolster their offerings, streaming platforms have invested in creating original content, which was intended to remain permanently available on their platforms, enriching their content libraries for users.

However, a recent trend has emerged where these original shows and movies are being removed from circulation as a cost-cutting measure.

This raises the question of whether this approach truly benefits their business. Is the amount of money saved significant? Especially considering the fact that they are currently not paying substantial, if any, residuals for these shows.

CNBC conducted an investigation to shed light on this matter, but the findings were rather underwhelming. They discovered that the removal of original streaming content resulted in savings of only “tens of millions of dollars.”

Another strategy employed by streaming platforms is selling the shows and movies they have removed to other platforms. For instance, they could take a show like Westworld off their own platform and sell it to Netflix, aiming to recoup some of the costs incurred. Although this practice is not yet widespread, it could potentially lead to a carousel of titles in the future.

Studios often argue that they only remove a small percentage, typically one or two percent, of their catalog at a time, ensuring a wide selection remains available. However, this can still be disheartening for fans who return to platforms to watch their favorite shows, as well as for writers and directors who see their work abruptly taken down, making it difficult for anyone to find and watch it.

Additionally, these companies are expected to pay residuals, but if a show is removed, the residuals also disappear along with it.

Once again, it is challenging to quantify the exact amount saved by moving a show off a platform, although it could be in the millions. However, in the larger context of building a comprehensive library and cultivating fan bases, these savings don’t appear to be significant in a billion-dollar industry.

We’ll keep an eye on where this might go.

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