[HN Gopher] The $55M saga of a Netflix series nobody will ever see
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The $55M saga of a Netflix series nobody will ever see
Author : anigbrowl
Score : 65 points
Date : 2023-11-23 00:50 UTC (1 days ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| theGeatZhopa wrote:
| I wanna see NOOOOOOOOOO
| armistace wrote:
| https://archive.is/BNBWQ
| neonate wrote:
| https://web.archive.org/web/20231124204950/https://www.nytim...
| dotcoma wrote:
| Isn't $55 M little more than a rounding error for a company like
| Netflix ?
| brigadier132 wrote:
| No, it isn't.
| cj wrote:
| Wasn't 1 hour long episode of Stranger Things about $30m per
| episode?
|
| Definitely not small amounts of money, but relatively
| speaking...
| mynameisash wrote:
| According to this site[0], their revenue for 2022 was $31.6B,
| so $55M would be approximately 0.17%. Stated otherwise, on
| average, they make $55M every 15 hours or so. So yeah, it kind
| of seems like a rounding error.
|
| [0] https://www.statista.com/statistics/272545/annual-revenue-
| of...
| onlyrealcuzzo wrote:
| Operating income is ~$6B - so it's closer to 1% of what
| really matters.
| IshKebab wrote:
| Revenue is the wrong number. Their net income is only $1.7b
| so $55m is not completely insignificant.
| dotcoma wrote:
| IMHO the right number is how much they spend to produce
| movies, shows, series etc.
|
| $ 16.7 B in 2022.
|
| So, 0,33 %
| notimetorelax wrote:
| It's still around 180k of premium subscribers at 25$ per
| month for a year, not taking into account traffic costs. It's
| not nothing, it's lost cash and lost opportunity.
| jl6 wrote:
| Just because large companies publish large round numbers in
| their reports, doesn't mean they don't care about the
| underlying figures.
| ssnistfajen wrote:
| Doesn't mean they can just forget about losing that money for
| an evidently frivolous reason.
| WalterBright wrote:
| If somebody stole $55M from them, I'm sure Netflix would go
| after them hammer and tong.
| iudqnolq wrote:
| Well in this case Netflix is defending against a case in
| arbitration that they owe the guy an extra $14 million. Sure
| seems like they signed a very stupid contract.
| paxys wrote:
| Losing the money to a crazy director who gambled it away is at
| least better than actually finishing the series but never
| releasing it to get tax write-offs (looking at you Max).
| nickelpro wrote:
| This isn't how tax write-offs work. The expenditures in the
| production of a film or TV series are always deducted from
| taxable net income regardless of whether the final product is
| released or not.
|
| There are a plethora of reasons not to release a creative work.
| For example, you don't want to spend any more money on music
| licensing, editing, marketing, etc, that is unlikely to be
| recouped.
|
| "Tax write-offs" simply isn't one of them
| bobsmooth wrote:
| There have been multiple completed works that have been
| canceled for tax reasons.
|
| https://deadline.com/2023/01/as-tv-turns-to-tax-write-
| offs-t...
| nickelpro wrote:
| The source for that is two-season showrunner for a CW
| drama.
|
| Also, this isn't a debate. The US tax code isn't something
| that's decided by CW showrunners.
| nradov wrote:
| You really shouldn't take fake news organizations like CNN
| seriously on issues like this. They obviously didn't do
| even basic fact checking with a real tax accountant or
| lawyer.
| aqme28 wrote:
| I know this is derailing the main thread, but then why are
| studios choosing not to release finished movies on streaming?
| It seems like they could recoup at least some of the expenses
| compared to just shelving the thing forever.
| nickelpro wrote:
| They're either:
|
| A) Not as finished as being represented by media, and the
| costs associated with finishing them exceed the likely
| value of the finished product
|
| B) The studio views the finished product as being of
| marginal value and damaging to their brand
| akgoel wrote:
| Certain expenses will be capitalized while the film is
| available for release/streaming. Depreciation/amortization
| will be years for the life of the film. But if you scrap it
| right away, you can deduct those expenses immediately.
| fny wrote:
| It's actually only 5 years, not for the life of the film.
| nickelpro wrote:
| Yes, but the reason to do this is that the film is
| ultimately going to cost more money than it is worth, or
| the gross represents a rounding error on the studio's
| balance sheet.
|
| You wouldn't capitalize the expenses of a film that was
| expected to recoup any meaningful amount of money on
| release. Either the thing is already costing you more money
| than it is worth or is a brand risk, thus you look for a
| way to get out as painlessly as possible.
| jedberg wrote:
| They need the money now, they can't wait to depreciate it
| over time.
| nickelpro wrote:
| If the film was going to recoup at least the $10-$20M
| they'll save in taxes that FY they would release it.
|
| The point is the property is worth negative or trivial
| value already. Either it's going to cost more to finish
| than it's worth, or it's worth next to nothing.
| anonymouskimmer wrote:
| > For example, you don't want to spend any more money on
| music licensing, editing, marketing, etc, that is unlikely to
| be recouped.
|
| I have no idea what "Max" is in the GP, but another big
| reason to not release a creative work is if audience feedback
| was negative enough that even releasing it for free would hit
| the value of your brand.
| alex_lav wrote:
| > I have no idea what "Max" is in the GP
|
| HBO Max, a streaming service.
| katbyte wrote:
| HBOmax - removed a ton of shows (some well regarded) for
| the tax write offs
| wombatpm wrote:
| Followed by the corporate rebrand from HBOMax to Max
| wouldbecouldbe wrote:
| It is though, I definitely had project not-launched which had
| expenses that accountants found much harder to justify then
| launched projects. Taxes isn't a hard science but a soft one,
| and when talking to a tax officer, as far as my limited
| knowledge goes, launching a product or movie does help to
| ease their fraud suspicions.
| granzymes wrote:
| You also need to pay residuals to the writers / actors when
| people watch the show. If you never release it to audiences
| you don't need to pay.
| wslh wrote:
| Just opportunity cost? [1]
|
| [1] https://www.investopedia.com/terms/o/opportunitycost.asp
| xrd wrote:
| So many stories like this recently. Coyote vs Acme drama is so
| interesting as well. I bet the movie industry will become as
| crazy as the world of casinos
| gkoberger wrote:
| Very different situation. For Coyote vs Acme, the movie was
| finished properly and the only issue was WB projected it would
| make more money as a tax write-off. There was no malfeasance
| from the director/producer/etc.
|
| For this one... well, read the article. The director/producer
| did some crazy stuff with the money.
| nradov wrote:
| It is not possible to make more money as a tax write-off.
| That's not how corporate income taxes work. The expense of
| making a movie can always be written off regardless of
| whether it is released or. If the studio decided not to
| release it then that was done for other reasons.
| jedberg wrote:
| https://deadline.com/2023/11/coyote-vs-acme-shelved-
| warner-b...
|
| tl;dr: If they never release it they can write off the
| "lost profits" which they can't do if they release or sell
| it.
| nradov wrote:
| Bullshit. You can't write off "lost profits". The US
| corporate income tax code contains no such provision.
| Don't believe anything you read in the entertainment
| press, it's mostly fake news or at least not fact
| checked. Go ask your own income tax accountant if you
| don't believe me.
| jedberg wrote:
| Ok, well then why didn't they release the movie? Why did
| they say it would be more profitable to not release it?
| You're either smarter than the entirety of Warner
| Brother's finance department, or wrong.
| nradov wrote:
| This is not a matter of who is smarter. The US tax code
| is very clear on that point and is not open for debate.
|
| If the studio decided not to release the movie it was
| most likely because the expected marketing and
| distribution costs exceeded the expected revenue. Or
| maybe they didn't want a crap movie to damage the long
| term brand of a valuable character that they plan to
| leverage in other products.
| jedberg wrote:
| > The US tax code is very clear on that point and is not
| open for debate.
|
| Anyone who has ever worked with an accountant knows this
| isn't true. The law is a series of gray areas at best.
| You can have three accountants do your taxes and get
| three results, because each applies different
| interpretations to the laws. And going in front of a
| judge won't get extra clarity -- three judges would give
| you three different opinions.
|
| > If the studio decided not to release the movie it was
| most likely because the expected marketing and
| distribution costs exceeded the expected revenue.
|
| Maybe, but it tested better with test audiences than any
| other movie they release this year, so that's highly
| unlikely. Also, they specifically said they were doing it
| for the write down.
| boeingUH60 wrote:
| I love how you're being called out for how wrong you are
| on this thread, but somehow manage to double down and
| always ask "but what about?..."
| FrobeniusTwist wrote:
| >> The US tax code is very clear on that point and is not
| open for debate.
|
| > Anyone who has ever worked with an accountant knows
| this isn't true.
|
| The point being referred to here is that you can't take a
| deduction for profits you would have made in some
| hypothetical world where things had worked out better for
| you. It's not all gray areas, and this particular point
| is entirely un-gray. Nor does the article that you
| "tl;dr"'ed into this quip support you here. It just says
| that the studio decided not to risk any further losses.
| TylerE wrote:
| Because it was gonna bomb, and make less money than it
| would cost to market. It really is that simple.
| Warner/Discovery is mega-cash strapped right now. They
| may literally value $100m now more than $200m a year from
| now, as they have a massive debt to service.
| jedberg wrote:
| The real crime in the whole Coyote vs Acme situation is that
| the tax code makes it more profitable to write off a
| completed movie than sell it.
| RajT88 wrote:
| I love these stories of sci-fi movie diasasters. There are just
| as many insane stories of "amazing this classic ever got made".
|
| On the topic of disasters, I recommend reading about The
| Starlost:
|
| https://en.m.wikipedia.org/wiki/The_Starlost
| dylan604 wrote:
| Sounds like Jodorwsky's Dune[0] where it's famous for not
| getting made.
|
| https://en.wikipedia.org/wiki/Jodorowsky%27s_Dune
| nihiven wrote:
| I would love to see how insane a 10-14 hour Dune movie would
| be. No intermission I'm sure.
| RajT88 wrote:
| I would watch it.
|
| My wife would probably head to her sister's for the
| weekend.
| frfl wrote:
| Slightly unrelated, but there is a 19 hour fan-edit of the
| Hobbit + Lord of the Rings -- i.e someone glued all 3
| Hobbit movies and all 3 LotR movies into a 19 hour video.
| usrusr wrote:
| I believe that a 90 minutes cut of matrix 2+3 could be
| actually enjoyable.
| mavhc wrote:
| "people copied our cool effects for Matrix 1, what if we
| make the action scenes so long and expensive no one would
| even bother to copy them because they all went home
| before they were over?"
| AdamJacobMuller wrote:
| Hopefully that's 19 hours of LOTR with the 2-3 hours of
| the hobbit which was good.
| frfl wrote:
| No, it's uncut, all deleted scenes, extended version of
| all movies if I'm not mistaken. It's not a "remix" edit,
| the 19 hour one I'm referring to.
|
| https://www.reddit.com/r/fanedits/comments/bo8how/middle_
| ear...
| dylan604 wrote:
| In the "2-3 hours of the hobbit which was good" are you
| including the animated versions as well? I'd be hard
| pressed to find 2-3 hours from the travesty that Jackson
| made
| vkou wrote:
| The best way to watch that is almost certainly to come in
| on ~hour 10.
| runeofdoom wrote:
| There are also fan-made "book edits" of LotR and the
| Hobbit that purge as much non-book material as possible
| while keeping th film coherent.
| superjan wrote:
| For starwars fans, there's machete order:
| https://www.rodhilton.com/2011/11/11/the-star-wars-saga-
| sugg...
| dylan604 wrote:
| I wouldn't mind sitting in a screening of Dune pt1 followed
| by Dune pt2 when it comes out. Sounds like something Alamo
| would do. While not 10-14 hours, I would be willing to sit
| in the theater for 4-5 hours.
| AdamJacobMuller wrote:
| AMC by me did all 3 LOTR films in 3 nights just before
| the hobbit came out. I enjoyed it a lot but by god by the
| time the 3rd movie ended I was _done_ , and then I still
| had to sit through another 45 minutes of endings.
|
| (Best movies ever)
| hinkley wrote:
| SciFi did a miniseries, just before or just after they
| changed their name. It wasn't bad. I think it was about 10
| hours.
|
| The problem is that a lot of the payoff is at the end of
| book 3, and then book four tips the whole thing upside down
| with some deep religious and philosophical elements that
| I'm not sure everyone is ready for.
|
| I'm always a little surprised how few people have read Dune
| relative to Lord of the Rings, but the more I think about
| Dune the more I get it.
| dylan604 wrote:
| >with some deep religious and philosophical elements that
| I'm not sure everyone is ready for.
|
| This is how I felt about Battlestar. I barely remember
| watching the original series as a kid, but I just
| remember a couple of character names, Cylons (which I
| thought were cool), the space ships, and the human in the
| dark room ontop of the pyramid shape the Cylons talked
| to. That was it. Then I watched the reboot, and was
| shocked by the religious overtones. Clearly, I never
| researched anything about it until that point, and then
| it all made sense.
|
| I'm nervous about Buck Rogers (biddybiddup, what's up
| Buck!) might turn out the same way on a reboot.
| bigmattystyles wrote:
| Religious overtones or are ancient religious texts the
| original sci-fi where its adherents a few generations
| removed never got the memo? Only kinda joking. I too
| picked up on battlestar, resurrection, the twelve tribes
| (or colonies?) lords ok Kobol and so on. I think someone
| told me at some point the original was Mormons in space.
| WalterBright wrote:
| You can never reboot Max "perhaps you should execute
| their trainer" von Sydow as Ming the Merciless. Melody
| Anderson. Queen soundtrack. A true masterpiece.
| WalterBright wrote:
| I don't understand all the love for Dune. I read it, it
| was ok, and that was it. 3 underwhelming film adaptations
| is more than enough.
|
| Special effects don't make a movie anymore. What matters
| is plot (and music). For example, "Colossus the Forbin
| Project" is very good. Some other very good scifi movies:
|
| . Invaders from Mars
|
| . Flash Gordon (1980)
|
| . Terminator
|
| . Star Wars IV
|
| . Alien
| rolph wrote:
| the "can i be of assistance" interface always reminded me of al
| jafee
| RajT88 wrote:
| That guy seemed really annoyed the whole time. It was
| strange!
| boeingUH60 wrote:
| Maybe they can create a new movie based on this funny story. Name
| it _Doge King_ and chronicle the bizarre world of selling
| shitcoins.
| gte525u wrote:
| Basically 'Ed Wood' reimagined?
| duiker101 wrote:
| Netflix just gave him the money? Isn't a producer the one with
| the money that hires people?
| gkoberger wrote:
| Well, he had his own production company, and they gave money to
| that.
| pavlov wrote:
| In the same sense as a startup founder is the one with the
| money who hires people. Usually it's somebody else's money who
| is keeping a distance, and the producer/founder is making
| decisions on how to use it.
| livinginfear wrote:
| Since we're discussing the economics of film/TV studios, and
| their weird decisions. I'd like to understand why the studios are
| still making Star Trek shows. Each one seems to be more poorly
| received than the last. That's costing studios far more than
| $55M. Picard alone cost ~$9M per episode according to Wikipedia.
| dylan604 wrote:
| Eventually, you get one right, right? Even a blind squirrel
| finds a nut once in a while. Plus, there are so many Trekkies
| that will watch anything regardless of how bad it is just so
| they can bitch about it after watching it. They still had to
| watch it though, and that's about all that matters to the
| analytics.
| rightbyte wrote:
| It is strange they can fail so bad, since Star Trek is
| essentially a setup to make _any story at all_ each episode. I
| mean, McFarlains comedy-as-an-excuse Not-Star Trek Star Trek is
| so much more Star Trek than the new series ... at a way lower
| budget. Imagine if they gave him the job instead.
| mavhc wrote:
| Which new series?
| anonymouskimmer wrote:
| Star Trek shows last for decades as revenue generators through
| syndication, streaming, merchandising, novels, movies, theme
| park events, and etcetera. A new series may draw people in,
| many of whom will stay to watch the older series.
|
| Now that the series are basically only available on streaming
| through CBS/Paramount I don't know what syndication gains are
| being made, but I'd guess a huge percentage of the
| CBS/Paramount streaming subscribers are staying subscribers for
| the huge Star Trek library. It's an anecdote but the last time
| I quit Netflix was when they lost Star Trek and I realized I
| was basically only hanging on for Star Trek episodes (after
| about a year and a half I resubscribed for other content).
| metabagel wrote:
| Paramount+ took a few swings at this, and eventually they hit
| paydirt with Strange New Worlds.
|
| The intention isn't to make mediocre shows. The intention is to
| make a show which draws an audience, and Star Trek shows start
| with a decent base audience to make it worth trying.
| pests wrote:
| SNW works imo because it's a throw back to the episodic
| nature of the earlier shows.
|
| Discovery did not work for me in the same way despite me
| usually liking those less episodic plotlines.
| jandrese wrote:
| So I assume Netflix sued him for breach of contract? It doesn't
| seem like the world was deprived of any art except for whatever
| production wasn't greenlit because this guy was too busy making
| line go up to actually do his job.
| gkoberger wrote:
| Ironically, he sued them. But yes, it's currently in court as
| we speak.
|
| (It's all in the article!)
| usrusr wrote:
| Heh, sounds like the next big Netflix white collar crime hit will
| be self-referential then. Will they reuse their Streamberry alter
| ego from Black Mirror or appear as Netflix proper?
| function_seven wrote:
| From the Times article:
|
| > _[Rinsch] transferred more than $4 million from his Schwab
| account to an account on the Kraken exchange and bought Dogecoin,
| a dog-themed cryptocurrency._
|
| Guy sounds like a dummy
|
| > _Unlike his stock market investments, this one paid off: When
| he liquidated his Dogecoin positions in May 2021, he had a
| balance of nearly $27 million._
|
| Shit, maybe _I 'm_ the dummy?
| starttoaster wrote:
| Around 2021, Dogecoin was a very interesting short term
| investment, yeah. Everyone was high off of AMC and GME in the
| stock market, so people were actively investing and day
| trading. Elon Musk was talking up Dogecoin, keeping in mind
| this is when he was still very popular in a positive way, and
| crypto in general was doing really well around that time. I'm
| not sure that it's wise to throw money into it now though.
| Crypto has become a very polarizing topic with people, with a
| vocal group of people that absolutely hate it (some of whom
| have no idea what they're talking about, but there are
| absolutely genuine reasons to dislike it as it's implemented
| today), and it has a somewhat uncertain future with government
| agencies reigning in on it (which certainly needs to happen for
| it to have a future too, but governments today seem more
| content with pulverizing the tech into the mud than see it grow
| into itself while keeping it fairly regulated.)
| sennight wrote:
| > Crypto has become a very polarizing topic with people...
|
| Certain people. I was involved from the beginning, and most
| of the OGs just shrug at the present day noise - the convert
| zeal being long exhausted by all the complaints about how PoW
| makes Mother Gaia cry. The people who have a crazy level of
| investment are the tech journalists that took very public
| positions badmouthing bitcoin. That is probably also true of
| anyone else who can't resist calculating how much their
| mistake cost them when they compared bitcoin to beanie babies
| at $150.
|
| > ...which certainly needs to happen for it to have a future
| too, but governments...
|
| Firing first in a duel, global economy style - that is why
| the foot dragging has been so protracted.
| askonomm wrote:
| I wish they'd make another Altered Carbon season. And bring back
| Joel Kinnaman. The first season was amazing.
| guhcampos wrote:
| Indeed, that was a painful loss.
| jauntywundrkind wrote:
| Or more Electric Dreams! Great production value Philip K Dick
| short stories.
|
| I haven't actually watched Altered Carbon but I have a trail of
| Takeshi Kovacs characters in various mmos and games, and am in
| general a Richard K Morgan fan. I loved _Altered Carbon_
| series. His recent-er _Thirteen_ was fun imaginative Mars
| stuff. _Market Forces_ is old old old & has a lot of mediocre
| aspects, but I loved the _Car Wars_ style setting & corporate
| mercenary treatment.
| selimthegrim wrote:
| What were your thoughts on their take on _Autofac_?
| gretch wrote:
| I really liked S1 and went into S2 bright-eyed and bushy
| tailed. Woe, it wasn't the same at all...
|
| Hope they bring back Joel and the S1 formula for success
| ciberado wrote:
| The books where also very different from each other, but with
| much superior result. Give them a try, if you want part of
| the fun of the first season. But the first season of the
| Netflix show is still muy preferred approach to this
| universe.
| kjuulh wrote:
| I rewatch it once a year or so. I haven't caved yet and read
| the books. But I still hope for a 3rd season even though it is
| probably never going to happen
| askonomm wrote:
| Yeah, Netflix said it was too expensive to make, and yet they
| shelve $55M worth of a show ...
| WalterBright wrote:
| So many great sci fi novels, and so many bad movie versions.
|
| Heck, nobody even seems to be able to film a decent "War of the
| Worlds" that is like the book.
| Jedd wrote:
| The first story _in this class_ that I read was Empires of the
| Deep - really amazed me on two fronts.
|
| First, the way the economics of these endeavours are so flawed
| that even the most passionate creatives / sponsors can't viably
| get the finished or near-finished product out to paying
| customers.
|
| Second, that this stuff doesn't get leaked more often -
| especially recent examples. Wikipedia also has a running list of
| abandoned films, though it looks to be US / Euro-centric. [1]
|
| [0] https://en.wikipedia.org/wiki/Empires_of_the_Deep (there's
| plenty of more interesting write-ups around the backstory)
|
| [1]
| https://en.wikipedia.org/wiki/List_of_abandoned_and_unfinish...
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