More and more studios are investing millions and now even billions of dollars in on-demand content. But in a world where consumers can watch thousands of hours of content on a streaming service only for a monthly fee of about $12, is it worth the investment?
Recently, Warner Brothers announced that Swamp Thing, which airs exclusively on the DC Universe’s streaming service, was going to be canceled after one season. The news of this shocked fans as the show had not even released its second episode yet and overall it had good critical reception, garnering a 92% on Rotten Tomatoes following the release of the pilot. However, the reason for the cancelation is murkier than the water Swamp Thing resides in.
In a recent twitter thread (featured below), John Gholson, a writer, pointed out a miscommunication left the show with significantly less than what Warner Bros. expected from North Carolina’s film grant program.
Initially, sources stated the early shutdown, 13 episodes but that was later cut down to 10, was due to creative decisions. However, the show costs a hefty $85 million on its first season in North Carolina, a figure revealed in its film grant applications. This week, it was revealed the series was deemed eligible for $12 million in grant funding from the state, pending an audit but the amount is significantly less than what WB needed to justify the cost of the project.
While it is easy to blame North Carolina for the miscommunication, or even WarnerMedia in general for releasing a, now failing, streaming service that offers little to no original content, this trend begs a bigger question and discussion. Movie, and TV studios are constantly upping the ante on what their products can deliver even when their profits say they shouldn’t. Netflix is in debt to the tune of about $12 billion dollars. Additionally, Amazon is dropping a whopping $1 billion, that’s billion with a “b,” on their upcoming Amazon Prime exclusive Lord of the Rings show. The irony is that it was reported in 2018 that Amazon Prime memberships actually cost the company money.
But is upping the ante worth it? Are big budget projects worth the investment and can networks and studios realistically scale things back when consumers now expect a certain level of quality?
The answer is complicated. There are big-budget productions that are clearly worth the value of the investment but the key is will they also bring in other lines of revenue. The best example is Game of Thrones which, despite its last season receiving negative reviews, has consistently kept viewers and garnered money for HBO not just in memberships but also in merchandise. Having a franchise that can be merchandised is key in this day and age to not only make money but building rapport with your audience, in a sense of brand loyalty. Stopping your love a show after spending hundreds of dollars on merchandise is a tall task for most.
This is something Disney has perfected. For example, despite how much Star Wars: The Last Jedi gets twitter up in arms, the money made from Star Wars merchandise far outweighs the $1.3 billion it made worldwide. While there are not a lot of exact figures, it was reported in 2017 that Disney sold $56.6 billion worth of licensed merchandise in 2016 which is up $4.1 billion from the previous year.
In fact, Disney out-earned its nearest rival almost three times. It follows that other studios are trying to hop on that success, Netflix hired Christie Fleischer, former merchandising and consumer product executive for Disney, in 2018 and named her head of consumer products.
DC Universe’s shows and many of other studios big-budget productions, like Netflix’s The Crown, and HBO’s Rome, have not utilized these other streams of revenue. DC Universe didn’t merchandise their shows and while the service itself offered exclusive merchandise, it didn’t follow in Disney or Netflix’s recent footsteps and merchandise the hell out of its product. It may seem small but there are no Funko POPS! for Titans or Doom Patrol, both shows that have been staples on the service for some time now. Part of this could very well be internal focus groups showed those products wouldn’t sell but, that service from a key line of profit is necessary to keep it alive.
Additionally, the DC Universe streaming service is an extremely niche product. It is marketed to fans of DC Comics and offers things the average comic book moviegoer might not find appealing like access to exclusive merchandise and an array of comics. The service has very little in the way of original content and instead offers a library of DC related shows and movies from Batman: The Animated Series, to the lost pilot Aquaman pilot from Smallville creators Al Gough and Miles Millar for The WB Television Network, now known as the CW.
That being said, streaming services are too expensive to maintain for such a specific audience. There are simply not enough hardcore DC fans and comic book readers to justify the streaming service. Right now the best part of the service is its vast library of comics, something that it did not have on launch. In fact, it only has three original pieces of programming, one which has been canceled (Swamp Thing) and another that hasn’t been confirmed for season two (Doom Patrol).
Streaming services are not cheap and require a large demographic of people to be interested in them to succeed. Disney is scheduled to launch its streaming service, Disney+, in November. And with original shows from major properties like Marvel and Star Wars, the service serves a much better chance of succeeding. According to reports, Disney+, in its first year, will offer 25 original series with 10 original films and specials.
With AT&T, the parent company of HBO, Cinemax, and Warner Bros., is now shifting to a potentially a new package that would include HBO, Cinemax, and Warner Bros. content for $17 dollars, only two dollars more the current price of HBO. This shows the writing is on the wall for the DC Universe and potentially their shows. Whether or not this strategy works, despite how good a deal it is, remains to be seen but in a world inundated with streaming services and the average American only subscribing to 2.25 services, it is hard to imagine that even if it is popular that it will be profitable for AT&T.
At the end of the day, with all the competition that exists and with the limited time we have to consume all the media that is offered to us, these big budget productions will always be underwhelming at best because the price of entry is higher than any return on the investment.