The great cancellation: why megabucks TV shows are vanishing without a trace • Hacker News Board

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#21

Post by pimlottc » Thu, Aug 31, 2023, 3:21 PM UTC

atduskgreg wrote: post #13

pimlottc wrote: post #9

How much of this tax reduction is based on convoluted Hollywood accounting? If the tax on the value of the show is higher than the streaming revenues, doesn’t that imply that the valuation is bogus? Can someone explain how the numbers add up here?

The write off is based on the cost of creating the show. I think the article is wrong/sloppily phrased in its line about the value of the company. If they remove a show then it will never generate any future revenue so they can write the cost of producing it off as a loss. The real scandal here is how little viewership streaming shows get and how little revenue they generate off of that viewership. Particularly for h…

> The write off is based on the cost of creating the show. I think the article is wrong/sloppily phrased in its line about the value of the company. If they remove a show then it will never generate any future revenue so they can write the cost of producing it off as a loss.

Yeah, I was going off the article's statement that it was about reducing value of assets. Makes more sense if write-offs are included as well.

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#22

Post by kmeisthax » Thu, Aug 31, 2023, 3:22 PM UTC

jeroenhd wrote: post #11

Whatare the implications of these tax write-offs in terms of piracy? If a company decides it'll never air a show again, what claim of ownership do they still have to prevent pirates from spreading the show for them? I'm sure the studios still be considered the copyright owners, but I don't think there's any ethical reason why they could possibly sue you for releasing something thst they cannot ever release themselves…

So, I've never actually been able to determine what kind of tax deduction[0] or credit would apply to a TV show that loses money. There's rules for how you account for copyrights and patents in tax law, and what kind of business losses you can and can't claim as a deduction or credit.

My uneducated guess is that there is no specific law that requires you to mothball a show that's been counted as a loss, but the streaming services do this anyway as a show of good faith. i.e. if the IRS were to audit you, you'd be able to show "see, it really was a loss, we made zero dollars off it!"

Morally, your argument sounds correct. Removing shows that have already been made because the owners didn't get enough profit breaks the copyright bargain. Congress should consider penalizing the deliberate destruction of American culture in this way. I doubt a judge would unilaterally decide to impose a "writ of outlawry[1] for copyright", though.

[0] Translator's note: "write-off" means deduction

[1] A 'writ of outlawry' is an old legal instrument that allowed courts to withdraw the protection of the law to criminals it could not bring to justice. Murdering them would be legally equivalent to killing a wild (non-endangered) animal. As you might imagine from a legal concept that is effectively The Purge IRL, it is not used anymore.

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#23

Post by dinkleberg » Thu, Aug 31, 2023, 3:23 PM UTC

rossdavidh wrote: post #2

"...2021’s Ultimate Slip ’N Slide was cancelled after the crew all came down with a highly infectious variant of explosive diarrhoea that can be spread through tainted water." Wait, why didn't we get an article on just that?

You’re asking the right question here. We need to hear more about that.

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#24

Post by Agingcoder » Thu, Aug 31, 2023, 3:27 PM UTC

´ based on a legendary piece of intellectual property. ´

I’d have said ´ book´ instead, but IP and the associated business idea seems to be the new normal for culture. I find it a bit sad.

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#25

Post by throwaway03635 » Thu, Aug 31, 2023, 3:28 PM UTC

atduskgreg wrote: post #6

polski-g wrote: post #3

This article doesn't really explain the "why". The title is very misleading.

They explain that the benefit to the companies is the tax write off. The part they don’t explain is how little money shows like these generate that they’re worth less than the potential write off. The big semi-open secret in streaming right now is that viewership is a lot lower than people think and much less correlated with show “quality” (where by “quality” here I mean production cost). This is why the whole indust…

My guess is that it's only going to get worse as each streaming service builds up their exclusive library.

As prices and interest rates go up, people will become more concerned about getting value for their money. Having 5 different streaming services will be an increasingly difficult sell.

> "viewership is a lot lower than people think and much less correlated with show quality"

That doesn't surprise me. Many are probably just turning on the TV due old habits, and keep it on in the background while staring at their phones.

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#26

Post by j-bos » Thu, Aug 31, 2023, 3:33 PM UTC

rsynnott wrote: post #20

In their list of examples of historical cancellations-before-airing, they missed one of the most baffling. "Heil Honey I'm Home!" was a 1990 British sitcom, stylistically parodying 1970s US sitcoms (over-the-top canned laughter, applause whenever characters enter the room, etc), about Adolf Hitler and Eva Braun as a suburban couple, along with their Jewish neighbours. Somehow, eight episodes of this were made (though…

Reminds me of the Monty Python skit about a bording house resident called Monsieur Hilter

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#27

Post by pjc50 » Thu, Aug 31, 2023, 3:33 PM UTC

atduskgreg wrote: post #13

pimlottc wrote: post #9

How much of this tax reduction is based on convoluted Hollywood accounting? If the tax on the value of the show is higher than the streaming revenues, doesn’t that imply that the valuation is bogus? Can someone explain how the numbers add up here?

The write off is based on the cost of creating the show. I think the article is wrong/sloppily phrased in its line about the value of the company. If they remove a show then it will never generate any future revenue so they can write the cost of producing it off as a loss. The real scandal here is how little viewership streaming shows get and how little revenue they generate off of that viewership. Particularly for h…

> why they will never agree to WGA demands to release viewership numbers in order to pay writers residuals; their stock would go to 0 if those numbers ever became public

Well, they're not going to have any WGA shows either any time soon, and maybe the WGA will start advocating for an investor lawsuit on this basis?

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#28

Post by rjtavares » Thu, Aug 31, 2023, 3:35 PM UTC

atduskgreg wrote: post #13

pimlottc wrote: post #9

How much of this tax reduction is based on convoluted Hollywood accounting? If the tax on the value of the show is higher than the streaming revenues, doesn’t that imply that the valuation is bogus? Can someone explain how the numbers add up here?

The write off is based on the cost of creating the show. I think the article is wrong/sloppily phrased in its line about the value of the company. If they remove a show then it will never generate any future revenue so they can write the cost of producing it off as a loss. The real scandal here is how little viewership streaming shows get and how little revenue they generate off of that viewership. Particularly for h…

Ad-supported cheaply produced reality TV + added subscription for premium content. Basic cable + HBO.

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#29

Post by pjc50 » Thu, Aug 31, 2023, 3:36 PM UTC

rsynnott wrote: post #20

In their list of examples of historical cancellations-before-airing, they missed one of the most baffling. "Heil Honey I'm Home!" was a 1990 British sitcom, stylistically parodying 1970s US sitcoms (over-the-top canned laughter, applause whenever characters enter the room, etc), about Adolf Hitler and Eva Braun as a suburban couple, along with their Jewish neighbours. Somehow, eight episodes of this were made (though…

More recently, an entire reality TV series was made before they noticed that one of the contestants had Nazi face tattoos: https://www.theguardian.com/tv-and-radio/2020/oct/30/skys-th...

Re: The great cancellation: why megabucks TV shows are vanishing without a trace

#30

Post by compumike » Thu, Aug 31, 2023, 3:38 PM UTC

So just like the software industry story https://news.ycombinator.com/item?id=35614313 from a few months ago, is this a case where the accounting illusion of amortization (preventing companies from deducting expenses as they occur, and instead spreading out already-incurred expenses into the future) is creating a short-term incentive to destroy real products and services?

How is this better than simply working on a cash basis, letting companies take the loss in year 1 when they build X, and then, for tax purposes, carry forward those net losses against the future revenues? Sure seems much simpler.