Hollywood Studios are Cancelling Shows as Budgets Tighten: Report

According to a report from Bloomberg, the television and film industry as a whole is cutting back spending on new projects as the world faces the threat of a recession. Hollywood studios and major streaming services are putting their spendthrift days behind as the media space realizes its years of unprecedented growth have come to an end.

Television budgets have been cut by over 30% on average. The highest-paid TV directors are making a fraction of what they previously did. What’s more, mid-budget movies are being put on hold and streaming platforms are shelving shows.

For example, Peacock cancelled Field of Dreams, a TV series from the co-creator of Parks and Recreation. Meanwhile, HBO Max scrapped Lost co-creator J.J. Abrams’ Demimonde. Even sunk cost fallacy isn’t enough to convince streamers and studios to keep these projects, which they have already invested millions in, alive.

“The days of the drunken sailor spending are gone,” one agent said. “I’ve never seen so many shows cancelled and returned.”

Studios and streamers growing cautious of how much money they are spending can be traced back to Netflix’s recent woes. Netflix, the streaming scene’s biggest spender, has tanked a few blows as of late and consequently reined in spending.

Since the start of this year, Netflix has lost more than 65% of its market value on the heels of slowing user growth and a net loss of 200,000 subscribers during the first quarter (its first quarterly subscriber loss in over 10 years).

Netflix has been scrambling to get back on the front foot ever since. The company has decided to adjust its spending habits, diverting its attention to content quality instead of quantity. Netflix has also announced plans to launch a cheaper, ad-supported subscription tier later this year.

Despite decreased budgets and hundreds of job cuts, Netflix’s head of global television Bela Bajaria said last week that the company does not plan on changing its programming efforts.

However, Netflix’s fall from grace has caused every production company and streaming platform in the business to pause and take stock of their financial positions and investments.

All that said, this might just be a market correction. Streamers were spending too much money and making too many shows, so they might just need to refocus.