Musical artists Cinderella famously sang “Don't know what you got 'til it's gone” on their 1988 album Long Cold Winter. Little did they know how prescient their words would come to be in an adjacent field of entertainment.
We know that linear and broadcast television still provides immense value to streaming thanks to the highly in-demand programming it delivers. The likes of The Big Bang Theory, Young Sheldon, Friends, The Office, Grey’s Anatomy, Criminal Minds, NCIS, Supernatural and more traditional TV series routinely top the majority of a wide variety of streaming performance metrics. But therein lies a looming problem that no one seems to be talking about.
Specifically, what to do when these types of long-running hit linear shows are no longer made with regularity?
Shows with long libraries of seasons and episodes are among the most valuable series when it comes to streaming contribution. They tend to generate significant audience demand, hours of viewership, retention and — in special cases — acquisition power. These help elicit usage from both customers at low risk of cancelling their subscription and high risk. However, the likelihood of newer linear series reaching these same long-running benchmarks moving forward is growing murkier.
“As production costs continue to rise and linear ratings continue to decline, it will be harder and harder for broadcast series to last for six-seven seasons,” Deadline recently reported.
This is becoming a problem industry wide as older programming increasingly drives scheduling lineups. “Like many other cable networks owned by Paramount, Comedy Central has become heavily reliant on repeats of old programs, including Seinfeld and South Park. Gone are the days, however, when Comedy Central had its own primetime lineup,” per Variety.
Not enough doom-and-gloom for you?
“[Broadcast] will continue to be in decline. It will be crappier. Budgets will get cut. More scripted programming will migrate away to streaming. There will be more repeats,” North Road Company CEO Peter Chernin told CNBC. His sentiment was echoed by Candle Media co-CEO Kevin Mayer: “Next will be the end of scripted programming on broadcast networks. There’s zero need for that. That’s going to come to a close in the next two or three years.”
A bit too alarmist? Perhaps. After all, linear TV still generates big cash flows and scripted franchises like Law & Order, Chicago, NCIS, 9-1-1, The Walking Dead and others remain healthy. Super Bowl 58’s record-breaking ratings show that broadcast TV still has the ability to galvanize massive audiences better than any other medium. However, scripted programming is undoubtedly becoming less of a central contributor to linear TV while news and sports remain key drivers. “A decade ago, as many as 100 broadcast pilots would be casting [in February]. This year, we have a total of three, all at NBC,” Deadline reported.
So how does streaming get out ahead of this problem and protect against a loss of interest due to a smaller influx of high profile dynastic linear series? To answer that, we will first highlight how significantly linear TV still contributes to streaming performance, how the state of streaming media reached this challenging inflection point, and what strategies can be deployed to guard against this issue before it starts negatively impacting major platforms.
Linear TV Remains Vital to Streaming
As of Q4 2023, six out of the eight major premium SVOD services generate more than half of their platform catalog demand from shows originally released on linear TV (broadcast plus cable), with Netflix generating more than a quarter: Peacock (74%), Hulu (71%), Paramount+ (78%), Disney+ (70%), Amazon Prime Video (55%), Max (85%) and Netflix (33%).
Legacy media companies developed powerhouse production studios long before they had streaming services. Companies such as ABC Signature, 20th Television, FX Networks, Warner Bros. Television, HBO, Sony Pictures Television, Paramount Television Studios and more deliver a strong inflow of shows and episodes as well as long-reaching libraries that serve as foundational building blocks to streaming services and linear lineups.
Though the TV industry experienced an unprecedented boom in the volume of new series in recent years, as new well-resourced streaming entrants popped up, this hasn’t always equated to an equal rise in demand for these newer shows. In reality, older shows tend to over-perform relative to what percentage of supply they account for.
Across major US SVODs, 52% of shows available on these platforms premiered in 2019 or later, when the streaming wars began in earnest with the launch of new competitors Apple TV+, Disney+, Peacock and what was then known as HBO Max. However, while more than half of titles on these SVODs were released since 2019, these newer shows only account for 33% of demand for all shows available on these platforms.
In other words, the waterfall of new streaming originals did not displace the existing TV libraries. Audiences still enjoyed familiar titles they had already consumed or were finally catching up on.
Including older shows that once aired on linear TV — which still enjoys unmatched broad reach in the US — is of great benefit to streaming services. The retention ability is apparent as they provide viewing options in between the release of splashy new originals, which are decreasing in volume as content budgets stabilize or even decline industry wide. Platforms with a substantial amount of licensed content, such Amazon Prime Video and Hulu, are likely to try and acquire older legacy shows, which can develop multi-generational fandoms.
Given a larger platform, linear series of old can enjoy a resurgence of cultural relevancy, audience demand and viewership. We’ve seen this with the cascade of concluded HBO shows making their way to Netflix in recent months or the reinvigorated excitement for Community that erupted in the early pandemic (and resulting in the forthcoming Peacock revival movie). Thanks to a recent licensing deal, Netflix and Disney opted to share the library for Grey’s Anatomy while LOST, How I Met Your Mother and other Disney-owned shows will return to Netflix. These are largely older series with hefty libraries at their disposal.
Blockbuster streaming originals such as Stranger Things and The Mandalorian may serve as the engine that drives SVOD expansion, but it is linear programming that acts as the key cogs that keep the machine running.
How the Current State of Media Came to Be
The continued prominence of linear programming is partially linked to the flawed approach major streaming services apply to library development. All streaming services share a similar model that is built around a given title’s ability to acquire, engage and retain subscribers. While the exact value each streamer places on acquisition, engagement and retention may vary, acquisition is often the top priority.
To be fair, this makes some baseline sense in the context of the challenging streaming wars. As nearly every service not named Netflix bleeds billions of dollars, accruing a sizable customer base to reach profitability is an understandable goal. Acquiring more subscribers is linked with projecting the lifetime value of a paying customer. Increasing the amount of time a subscriber spends with the service may be viewed as a shorter-term goal and therefore providing lower upfront value than driving new sign-ups.
However, acquisition-driving content naturally favors blockbuster break out series (The Boys, The Handmaid’s Tale, Marvel and Star Wars shows, etc.), which tend to require significantly more resources. This, in part, led to the unsustainable rise in production budgets industry wide. When former Amazon CEO Jeff Bezos instructed his team to find the next Game of Thrones, he inadvertently marched all of Hollywood into a minefield, particularly as it pertains to cancellations and renewals.
Audience demand within the first 60 days post-release can help predict the cancellation or renewal chances for a second season. Shows with demand less than 9 times the average are more likely to be cancelled after their inaugural seasons. Those generating 10x more demand than the average TV series have a 53% renewal probability. TV titles with 20x more demand than average within the first 60 days typically score a renewal rate around 76%, which rises to 90% for a 30x multiplier, and nearly 100% for shows exceeding 50x.
Yet every streamer has a more binary threshold of hours viewed per month to classify subscribers (high risk vs low risk) and dictate green light, cancellation and renewal decisions. At a certain high end point of these hours viewed per month, retention is usually above 90%. In other words, if a subscriber is watching around 20 hours per month, they are very unlikely to cancel their subscription. When making a decision on the next show to green light in isolation, one might punish a show that performed well with low risk subscribers who are already frequent users. Instead, executives might favor the splashy home run swing that could potentially drive increased adoption and draw interest from high risk subs only watching one or two hours per month.
However, once you reach a saturation growth point, this model is no longer effective. Prior to the streaming boom, there wasn’t a necessity to find as many shows that contributed complementary value. Basic cable’s goal was to find two or three hit shows and flank them with cheaper non-essential fare. Now, streamers have to find more shows to build a sustainable business model at a time when the volume of shows is decreasing. Blockbuster programming (i.e. acquisition drivers) at the top of the funnel works best when a strong backend (library) has already been built. Otherwise you’re asking for churn and low lifetime customer value, which results in financial difficulty.
Though he was specifically addressing a growing issue in kids animation, Xilam CEO and chairman Marc du Pontavice’s recent comments to Cartoon Brew sums up this value perception challenge well:
“Some streamers haven’t found a way to make hits with original material as they have too much expectation on the launch period. As opposed to adult-targeted content, it takes a very long time to build a kids or family hit. But I am not sure the algorithm can or wants to implement this rule of our business. As a consequence, the library titles are the ones that provide the core kids’ audience of the streamers, which is a shame as almost all of them have been generated on linear channels.”
All in all, this has created a state of streaming media in which the bar is higher and higher and at one point you don’t have content that fulfills the other metrics of success, thus contributing to a “self-fulfilling cancellation loop.” This is why getting out ahead of the shrinking linear market will be so crucial for the longevity of streaming libraries. In a new world, entertainment companies need to be smarter about bundling various types of shows together to make up for any potential loss.
Strategies to Counteract a Decline in Longer-Running Linear Series
The knee-jerk reaction to the potential decline in longer-running linear series is simply for SVOD services to create longer-running originals. While we’ll get to that more specifically in a moment, the reality is that it’s easier said than done.
“Still, broadcast series’ average lifespan is longer than that of streaming shows, which are often canceled after two or three seasons when talent payments are slated to jump significantly, making the series far more expensive,” per Deadline.
Another rapid reaction might be to just keep recycling studio libraries. But as enduring and multi-generational as select sitcoms and procedurals from the last 30 years have proven, they are a finite resource on a long enough timeline. There’s a reason why slightly older but nonetheless beloved-when-they-aired hits within those genres such as Cheers, Miami Vice, Knight Rider, Married With Children and more don’t enjoy the same sort of lasting impact with today’s audiences (this is not a critique of their quality).
Meanwhile, revivals and reboots of older titles in this vein have been frustratingly hit-or-miss for studios. Knight Rider, Punky Brewster, Doogie Kameāloha, M.D., Saved by the Bell, Frasier and more have somewhat failed to generate much traction while Fuller House, Quantum Leap, The Conners, The Wonder Years and Night Court have worked to varying degrees. Either way you cut it, it’s not an easily repeatable formula.
Instead, let’s look more specifically at some programming tweaks that can be made and some strategic rethinking of commonly held practices.
Serialized Procedurals
The most successful strategy deployed thus far is an attempt to recreate broad appeal blue sky broadcast fare. Streamers have long been delivering what I like to call serialized procedurals, which I consider roughly equivalent to Netflix content chief Bela Bajaria’s “gourmet cheeseburgers.” These are built creatively and structurally in a similar fashion to network procedurals. (Remember, creator Kenya Barris previously said that Netflix “became CBS”). Procedural dramas are among the leaders for in-genre affinity, or genres that fans tend to consume consecutively, which speaks to its ability to extend a viewer’s stay within a given digital ecosystem, especially thanks to treasure troves of episodes. (However, even broadcast dramas and procedurals are moving away from standard 22 episode seasons and more toward 13-18 episode seasons).
Learning from their broadcast parents, streamers built engaging high-drama tales around specific professions that dominate linear procedurals (armed forces, medical, legal, cop, etc). These series are often successful enough to last multiple seasons, generate impressive demand, and inspire spinoffs.
Amazon Prime Video has cornered the market on “Dad TV” via: Bosch, Bosch Legacy, Goliath, Jack Ryan, The Terminal List, Reacher and more. Paramount+ relies on neo-Westerns and elevated procedurals in the form of crime dramas from Taylor Sheridan: 1923, 1888, Mayor of Kingston, Tulsa King, Special Ops: Lioness, Lawmen: Bass Reeves, etc. Netflix’s gourmet cheeseburgers reside in the political (The Diplomat) and legal realms (The Lincoln Lawyer, Extraordinary Attorney Woo) as well as shows they rescued directly from linear TV (You, Lucifer, Manifest). Early 2024 breakout thriller Fool Me Once also shares narrative DNA with broadcast dramas, while Wednesday is adjacent to the YA programming historically found on The CW. Peacock’s Poker Face, a modernized episodic murder mystery similar to Colombo, was one of the best shows of 2023. Max‘s strategy is also reportedly to “broaden out to include procedural franchises produced by sister company Warner Bros. TV,” according to Vulture.
“Broadcast dramas now often cost between $3 million-$5 million per episode, streaming ones $5M-$10M an episode, down sharply from the highs of the past decade,” per Deadline.
The amount of raw hours consumed may drop with a shortening of seasons. To compensate, middle of the road broad appeal programming is on the rise. Major streamers such as Netflix, Amazon and Paramount+ are aware of this and are already placing strategic bets on original programming that closely resembles broadcast fare. These services will continue to embrace the procedural genre and progressively increase its output. The combination will result in many more of these shows consistently appearing in their respective top 10s, which ideally leads to more sampling and better completion rates.
Traditional Sitcoms
Streamers have struggled to generate highly in-demand original sitcoms, the third most in-demand subgenre globally and No. 1 in the US as of Q4 2023, outside the likes of genre amalgamations such as Ted Lasso and Only Murders in the Building. In an attempt to generate more original traction within this genre, streaming may consider tightly controlling budgets in order to develop and deliver longer sitcom seasons similar to linear’s 18-22 episodes as opposed to the 8-12 episodes streaming original comedies typically consist of. Staying on the air, with intermittent breaks, for longer stretches of the year with shorter off-seasons helps to develop closer emotional bonds between the characters and the audiences, create habitual viewing behavior, and leads to better audience retention.
The longer-tail of broadcast sitcoms tends to lead to more extended engagement and demand compared to the shorter-running streaming original comedies. We can further quantify this by looking at decay rates, which compares demand during two given periods of time.
On-season to post-season lasts from when new episodes are being released to an equal period after a finale has aired. The number of post-season weeks we examine depends on show length. For binge-release shows, we consider a period of four weeks after the initial release as in-season and the next four weeks as post-season. For weekly-release series, in-season includes all weeks in which new episodes are released through to the finale while the post-season covers the equal amount of time after the last episode initially airs. Here, broadcast sitcoms experience an average 29.7% decay rate in their demand while streaming comedies suffer a slightly larger drop at 32.1%. Remember, the smaller the decay rate, the better.
When looking at the decay rate from post-season to off-season, which is the next equally timed window and even further removed from a finale, broadcast sitcoms average a 12.6% decay rate while streaming comedies are at a whopping 31.8%. So in both instances, broadcast sitcoms have more staying power than streaming original comedies, which is helpful for reducing churn.
Yes, it’s expensive to develop longer-running shows on streaming, as we hit on earlier. But streaming is increasingly borrowing and recreating strategies long deployed by linear TV. That includes dabbling with traditional pilot orders to get a better gauge on quality vs. upfront full-season orders, Bloomberg reported. At the moment, there just so happens to be a strong buyer’s market for workplace, ensemble and general “hard” comedies (i.e. no dramedies or sad comedies eyeing awards recognition), per The Ankler. It’s the perfect opportunity to adjust streaming comedy strategies. (I LOVE The Bear, but traditional comedies don’t tend to inspire panic attacks).
Of the 20 most in-demand series (regardless of genre) with global audiences in the 15-31 age range in 2023, three were traditional sitcoms (Friends, Brooklyn Nine-Nine, How I Met Your Mother). You can also make the argument that other top 20 shows in that range — Sex Education, She-Hulk: Attorney at Law and WandaVision — deliberately incorporated many sitcom elements.
Live events, including sports, are also another key programming lane, but one deserving of its own future deep dive.
The broadcast model — supported by the dual revenue stream of advertising and retransmission fees — is made for repeatable, returning hits. Streaming business isn’t as well positioned, but with a renewed emphasis on advertising revenue complementing subscription revenue and greater scale through bundling, perhaps streaming can be a bridge between the old model and the new.
Bundling Acquisition, Engagement and Retention Drivers
Zooming out, a more general strategic revaluation may be necessary to fill this potential void. Specifically, how companies think about title combination within their libraries and what specific attributes are needed.
Six out of the 10 most in-demand sitcoms worldwide in 2023 lasted for at least 10 seasons while nine out of 10 made it to at least seven seasons. Again, as Hollywood trade outlets and well-respected executives note, this will likely become rarer and rarer.
Netflix non-exclusively streams Young Sheldon (which is also available on Max). Should it lose the title at some point in the future, the more financially prudent path might be to try and replace its lost viewership and demand in the aggregate. This requires packaging and bundling together a few different shows that will provide comparable combined seasons, episodes, hours, demand, and key acquisition, retention and engagement power.
One hypothetical example is licensing That ’70s Show (12.97x more demand than the average title worldwide in 2023) from NBCU as well as Fresh off the Boat (16.22x) from Disney. That ’70s Show carries natural consumption affinity with Netflix original That ’90s Show, while Fresh off the Boat counts Netflix originals such as My Life With the Walter Boys, My Demon and Welcome to Samdalri among its consumption affinity leaders (i.e. viewers who watched one title then also consumed the other title).
Neither series can replace the overall footprint of Young Sheldon, but they both were among the top 2.7% most in-demand shows last year. Just as important, they both can build bridges to other corners of Netflix’s library. For example, those that watched That ’90s Show then also watched The Blacklist (also licensed to Netflix), which opens a lot of pathways for greater viewership penetration. All it takes is strategically creative on-platform discovery and recommendation assists.
The more you can drive customers in and out of a wider pool of content via effective discovery and recommendation tools paired with clever content catalog pairings, the more engagement you will generate, which will lead to better customer retention, lower costs and a smaller reliance on the dynastic broadcast series. In some ways, it’s not wholly dissimilar from the Oakland A’s famous moneyball strategy in which they create value not necessarily from star players but overlooked and undervalued players that are more affordable and fit well together. (Though, to be clear, Hollywood is still a hits-driven business overall. The point is that streamers may have fewer traditional non-original hits to choose from in the future).
When looking at the 10 most in-demand procedurals worldwide last year, we can see seven of the 10 ran for at least 10 seasons. According to Parrot Analytics Content Valuation data, Grey’s Anatomy — which is entering its 20th (!) season and is among the top linear dramas — derives 53% of its revenue contribution to Netflix from its ability retain existing customers and keep them from canceling.
Guarding against that type of content fading requires potentially finding two shows that make sense together as a bundle and might yield similar performance. For example, Bridgerton (24%) and Sex Education (23%) derive similar chunks of their revenue contribution to Netflix from their ability to retain existing customers. Combined, they conceivably help to plug that hole. In reality, Netflix would likely be looking at new licensing and original opportunities in this instance, but the functional thinking is the same. Ideally, a collection of shows can also help land in the same ballpark of seasons, episodes, demand, hours viewed, etc. (Executive producer Shonda Rhimes wants Bridgerton to run for eight seasons, not including spinoffs).
Again, it’s not so much about trading one blockbuster hit for another. Instead, it’s about utilizing existing titles and new originals that can help provide similar attributes when stacked and delivered to viewers together, especially in a world in which new linear seasons may not generate the same long-tail as they once did.
Conclusion
Long-running linear series will not disappear overnight. Young broadcast hits currently airing such as Abbott Elementary and Ghosts seem particularly well-suited to extended runs. Still, amid a rash of recent and/or looming conclusions and cancellations for popular linear shows (RIP The Good Doctor, Young Sheldon, Blue Bloods, S.W.A.T., SEAL Team, The Resident, Station 19, Succession, Barry, etc.) and rapidly changing economics for traditional TV, the general industry consensus is that it will be harder and harder to justify such lengthy lifespans. FX Networks President John Landgraf recently expressed doubt that his future series could reach five seasons, citing both shrinking audience attention spans and“radically increased” costs in the “media ecosystem created by the internet.”
Netflix will do what it always does: leverage what the legacy players sell them while following the consumer in order to improve its targeted originals approach. The market-leading streamer will likely increase the volume of output for selected genres and taste clusters while continuing to license key series and movies from rivals. But even Netflix, along with the other major streamers, needs to adapt and evolve over time to financial realities within the industry and shifting consumer trends.
That will require a reevaluation of success metric priority (slightly less acquisition, slightly more retention and engagement) which will lead to a more balanced approach to library construction. There are only a finite amount of long-running linear series that boast multi-generational appeal. Should this begin to fade over time, streamers will need to adopt these new strategies lest they wind up missing what has been lost just like Cinderella’s song warned.
