Have we hit peak TV? Plus, our debt to bees

This is an audio transcript of the FT Weekend podcast episode: Have we hit peak TV? Plus, our debt to bees

Topher Forhecz
Amazon debuted its new TV series The Lord of the Rings: The Rings of Power this week. And the show looks, well, epic.

Clip from The Lord of the Rings: The Rings of Power
Evil does not sleep. It waits. Beyond the darkness, tempting shadow . . . to bury us all beneath the mountain.

Topher Forhecz
You can see just how much time and attention to detail was spent on it, even in the trailer. There are massive battle scenes, incredible costumes and stunning landscapes.

Clip from The Lord of the Rings: The Rings of Power
You have been told many lies of Middle-earth . . . 

Topher Forhecz
And there’s a very good reason why this show looks so good. It was extremely expensive to make.

Chris Grimes
So if you look at the two seasons that are planned for this so far, that’s a, that’s $1bn show, which I believe is a first.

Topher Forhecz
That’s Chris Grimes. He’s the FT’s Los Angeles bureau chief and covers all things Hollywood. Chris recently wrote about how Amazon isn’t the only streaming service spending money like crazy on their programming.

Chris Grimes
The new Game of Thrones season has just started on HBO Max. And that’s, you know, that’s a $200mn season for that show and on and on. Disney’s got a lot of big stuff coming out. The Star Wars’ Andor series is coming out this autumn. So it’s gonna be a big, big moment for consumers. It’s frankly extravagant budgets, which is kind of amazing.

Topher Forhecz
But Chris says these boom times for show budgets may not last. Theatres are producing big hits again, and a lot of streaming services aren’t even getting enough subscribers to make a profit.

Chris Grimes
So now there’s kind of a re-evaluation of all of these things that we were kind of thinking of as gospel just 18 months ago in streaming business.

[MUSIC PLAYING]

Topher Forhecz
Today we look at how the streaming landscape is changing and what that means for the types of shows that we will watch at home. Will the quirky indie romcom survive or will it be vanquished by flashy superhero franchises? Then we’re joined by the head of Lex, and our nature therapy columnist, Jonathan Guthrie, to talk about bees. He’s crunched the numbers and figured out how much we owe bees and what we can do to repay that debt. This is FT Weekend, I’m Topher Forhecz, in for Lilah Raptopoulos.

Hi, Chris. Welcome back to the show. Thanks for being here.

Chris Grimes
Hey, thanks for having me.

Topher Forhecz
So you are our expert in the streaming wars and it’s been such a wild and unpredictable time. And I wanna run through each company and break down what’s going on with each one. But first, let’s step back. How did things change for streaming broadly when the pandemic hit?

Chris Grimes
So the pandemic — horrible for humanity, but amazing for streaming — people were locked down, people had very little to do. And so they tucked in and started bingeing shows on streaming platforms, particularly Netflix. The timing was good for Disney as well because they had just launched Disney Plus, their new streaming service. And so what would have probably taken several years in an, kind of normal time period, just compacted lots and lots of growth for the whole industry into a couple of years.

Topher Forhecz
Back in the early days of the pandemic, we were all buzzing about shows like Tiger King, Ted Lasso, and The Mandalorian — and subscriptions were soaring. So platforms decided to go all in on streaming, even old-school studios that had resisted it. The plan was to grow and grow fast. They dumped a ton of money into their shows and hoped that it would get them enough subscribers to eventually make a profit. And this actually created a bit of an arms race to see which platform could spend the most on its content. And now, Chris says what is coming out this fall is the result of that race.

Chris Grimes
It’s gonna be a big, big moment for consumers. Shows that were greenlit at, during the moment when Wall Street was really cheering on this dash for growth, big spending on content, big losses on investment into streaming service. And a lot of that production was disrupted because of the pandemic. It was harder to make these shows during the pandemic. So we’re gonna see the releases of shows that were commissioned at the, you know, bubbliest moment of the streaming era.

Topher Forhecz
But Chris says there’s a flip side to that.

Chris Grimes
You know, especially after Netflix announced earlier this year that their blistering growth had gone into reverse and that they were actually losing subscribers, not gaining subscribers, that was the moment that really changed the narrative here. And now Wall Street investors are saying, “this can’t continue forever, we’re gonna have to start seeing some money.” And so, you know, the companies are responding to that. Netflix, which, by the way, is profitable, has said that they will do something that they said they were always never gonna do. And that is introduce an advertising tier. This is, it’s kind of a Best-of-times/worst-of-times scenario for consumers where they’re gonna have all of these riches this autumn but at the same time, they may be either, you know, facing the choice of having to watch ads while they do this or pay higher prices.

Topher Forhecz
So let’s talk about Netflix for a second. You mentioned that in order to stay profitable, they’re gonna introduce a subscription plan that would include ads which, by the way, Disney is also going to do. But has Netflix said anything about the type of content it will produce to attract and keep subscribers?

Chris Grimes
In a recent call with investors, Ted Sarandos, who’s the co-chief executive, and the guy who’s kind of oversees the content strategy, admitted that their content in many cases just wasn’t good enough, which is, I’ve found to be a remarkably forthright statement during an investor call. So they say, I think they’re gonna make, they’re gonna make less, but they’re gonna try and make that content better, which is, you know. It’s an interesting thing. It’s a notoriously difficult business. But, you know, Netflix still, like I said, they’re profitable. They still plan to spend billions of dollars. I think they spent about 17bn or on track to spend about 17bn on content this year.

Topher Forhecz
So do you think that they’re just gonna direct that money to just fewer projects? Is that the idea?

Chris Grimes
I think so, yeah. So Netflix is, has done some things like, recently they worked with the Russo brothers, who were the brothers who were behind some of the biggest successes for Marvel. So the Russos came in and made The Gray Man. And I think we’ll see more of that. They’re trying to, with proven hitmakers, to make a franchise out of this Gray Man series of books that’s, you know, that could run and run. Everybody, in fact, wants what Disney has with Marvel over Warner Bros. You’ve got David Zaslav, the new CEO who came from Discovery. Warner Bros has DC Comics and he wants a DC franchise the way that Disney has with Marvel. And he says he’s gonna invest in that. He’s challenging the people at Warner to come up with a DC strategy that’s, a big hit-making strategy like that. So this is what everybody wants. Netflix wants this and, you know, big franchises that are gonna keep subscribers locked in, you know, for years.

Topher Forhecz
Right. So let’s talk about HBO for a second, and Warner Bros Discovery. They made big news recently by reshuffling and axing some of their content. Can you tell me a little bit about what happened there?

Chris Grimes
Yes. So Discovery bought Warner Bros after the pretty short but not very great ownership of Warner Bros by AT&T. And to make this acquisition, Discovery, which is a smaller company, had to take on $55bn worth of debt. And Zaslav’s got to pay that off somehow. So he’s looking for ways to cut costs. And at the studio, he looked at Batgirl and said, which is a movie that’s finished and was about to be released, and he axed it. And this is a DC movie. He emphasised a few times on a call that he’s willing to stand by a movie as long as it’s got quality. So, you know, obviously I haven’t seen it and very few people have seen Batgirl. But he decided to take a write-off on it.

Topher Forhecz
Chris says people in Hollywood were really shocked by this move. This was a movie that Warner Bros had already spent $90mn to make and had already started advertising.

So do we have any idea of what that might mean for the types of shows that we’ll be seeing on, let’s say, HBO Max?

Chris Grimes
You know, I think what the people that we’ve been talking to in recent days is, is that this push for taking over, not just Warner, but across the industry means that studios are probably gonna do what they’ve always done and go for blockbusters, big hits, you know. And you know, that may mean, according to a professor I spoke to last week who is saying, you know, one of the things that’s made the streaming era so wonderful in a lot of ways is that there were quirky little shows. And he was speculating that, well, maybe we won’t see as many of those things because the studios are gonna want to attract subscribers and lock them in.

Topher Forhecz
And along those lines with HBO Max, which I believe took off during the pandemic, now they’re bringing in Discovery. Do we know if HBO’s Max’s days are numbered and that might turn into a different streaming service altogether?

Chris Grimes
There’s a lot of, there’s a lot of speculation about that. Of course, HBO has been, you know, consistently one of the, you know, producers of some of the highest quality, most beloved series and shows for decades now.

Topher Forhecz
Chris is talking about shows like The Wire, The Sopranos, Band of Brothers. HBO was responsible for a new golden age of television. And Chris says now people are nervous about what could happen to it.

Chris Grimes
I mean, it seems like what we know so far is that the plan is, instead of having a Discovery streaming service and an HBO streaming service, they’re gonna try to put these together in some kind of bundle or platform together, which, you know, would be fine. I think in the darkest late-night worries in Hollywood, you’d see HBO become more like Discovery and then the other way around, where you have more inexpensive programming about people’s kitchens and their gardens or whatever.

Topher Forhecz
So then there are the big tech companies that are moving into this space like Apple and Amazon, and they basically have limitless resources to produce original content. So how exactly are these studios supposed to compete with their budgets?

Chris Grimes
So since I’ve been covering this, this beat, when you ask people in the industry how it’s all gonna work out, there’s a belief that, well, there will be inevitable consolidation, so somebody is gonna have beat somebody else. There’s too many players to exist a few years from now, right? So somebody’s gonna lose. There are gonna be losers and they’re gonna be eaten up. And that’s . . . but looming in the background of that is the fact that you’ve got really deep-pocketed tech companies — Amazon, Apple, and even Google, which has YouTube, and you can subscribe to streaming through YouTube as well. So I think for the studios, as big as some of them are, you know, Disney’s huge, Warner Bros and Paramount are these legendary Hollywood names. But, you know, do they end up being part of a deep-pocketed tech company at some point? That’s always kind of in the backs of people’s minds. But what we do know is that the traditional studios can’t continue to spend money the way they’re spending it on streaming services that are unprofitable.

Topher Forhecz
So as we wrap up here, have you spoken to actual creators at any of these services? I imagine it must be stressful working in a system that is just constantly changing and no one’s really sure what it’s gonna look like or how much money they’re gonna have. What are they saying?

Chris Grimes
Yeah, this is a conversation I had, I’ve had with people for several months now after the Netflix shock earlier this year. Now, so, there’s one point of view — and I think there’s a lot of merit to this — which is that no matter what happens, these streaming services are gonna still need . . . the appetite for streaming content is still big. And so if you’re, you know, if you’re a producer or if you’re a writer, you . . . there’s a belief that there’s still gonna be need for more scripted content than there was 10 years ago, right. The demand is higher than it was, thanks to streaming. The economics of that is a completely different discussion. Netflix has changed, you know, the game in terms of potential bonuses and profit sharing and that kind of thing for writers and producers. But putting that aside, there’s an expectation that, yes, there’s still going to be a need for a lot more content than there was before.

Topher Forhecz
Which leads me to my last question: are we at the peak of peak TV?

Chris Grimes
The question of peak TV is a really funny one or an interesting one. There’s a veteran television executive named John Landgraf who’s, who works for the FX Network, and he’s been calling the peak of peak TV for about the last five years. He did it again in early August at a TV critics event. Basically, at some point, he’s got to be right that these budgets will have to top out; this unlimited growth in streaming series budgets has got to has got to top out somewhere. And given the big change that we’ve seen in investor appetite to basically endless losses, that game is over now. So I think peak TV, if it’s not this year, it’s coming.

Topher Forhecz
All right. Chris Grimes, thank you so much.

[MUSIC PLAYING]

Topher Forhecz
And for our next segment, you’ll hear an interview from Lilah about bees.

Lilah Raptopoulos
My colleague Jonathan Guthrie had this nightmare recently that really freaked him out. So here’s what happens. A debt collector knocks at his front door demanding nearly $160bn. That’s the stuff bad dreams are made of, but the other horrifying detail is that this debt collector is not human.

Jonathan Guthrie
So this rather angry bee that turns up on my doorstep starts off trying to get me to pay the whole whack.

Lilah Raptopoulos
So the reason this bee is hitting Jonathan up for so much money is because that’s how much it thinks we humans owe it.

Jonathan Guthrie
And then in the end, it settles, after threatening me with its friend, Mrs Hornet, wit, for me to pay for my household alone, which I decide is actually pretty good value, if you think . . . 

Lilah Raptopoulos
Mm-hmm.

Jonathan Guthrie
 . . . if you think about it, what you pay for Netflix.

Lilah Raptopoulos
[Laughter] What is it? It’s £87 a year?

Jonathan Guthrie
Yeah, something like that. Exactly. So, you know, for a little bit more, you can have life on earth continuing in a reasonably organised kind of way.

Lilah Raptopoulos
Seems like a pretty good deal.

Jonathan is head of the Lex column, which gives financial commentary at the FT. But he also has his own nature therapy column for FT Weekend. And recently he wrote a piece that brought these worlds together: about the debt we owe bees.

[BEE SOUNDS]

Lilah Raptopoulos
Bees have been going through it for a while. Their population is declining rapidly, which is bad because they pollinate one of every four bites of food we eat. And Jonathan wanted to really calculate how much we owe them. Putting a value on things we don’t pay for has a name. It’s called natural capital.

Jonathan Guthrie
So we’re all familiar with financial capital, the kind that sits on company and bank balance sheets. And that’s kind of easy to assess because you can count it up in dollars or pounds or yen or whatever. Natural capital is a bit different because it’s an attempt to place monetary value on the environment around us, on the organisms that live there, and on which we’re absolutely dependent as a species.

Lilah Raptopoulos
Jonathan says that often we think of environmental issues as something called externalities. It means basically, costs we don’t have to pay.

Jonathan Guthrie
If, for example, you poison a lot of bees with your chemical works, the cost doesn’t fall on you directly. It actually falls . . . you might think it falls on nobody. It just falls on the bees.

Lilah Raptopoulos
But they’re not externalities, and people are starting to realise that we do ultimately have to pay a tangible price. Jonathan, are there other examples of externalities? Like . . . 

Jonathan Guthrie
Well, it used to be climate change, didn’t it? And, that’s sort of not an externality anymore, is it?

Lilah Raptopoulos
Yeah.

Jonathan Guthrie
Climate change, of course, has crossed over from being an externality to one that’s imposing very high costs on human beings of a real, you know, individual human and financial kind. And in the case of bees, it’s that if you let them all die, or indeed you kill a lot of them, there’s nothing around to pollinate all the plants that you need, not just the flowers and . . .

Lilah Raptopoulos
Right.

Jonathan Guthrie
And, you know, the beautiful environment that we have around us in unspoilt places, but also important food crops, too.

Lilah Raptopoulos
Yeah. So can you tell me a little bit about how one comes up with a numerical value for nature, for things like this?

Jonathan Guthrie
I mean, there are different ways that you can look at it. The number that I quoted was essentially a figure derived from the loss of crop productivity . . . 

Lilah Raptopoulos
Right.

Jonathan Guthrie
. . . if bees weren’t there anymore, and there are some crops that are, for example, pollinated just by the wind blowing pollen around. And there are other ones that are pollinated by different kinds of organisms. But that was the starting point of the researcher I was quoting. There are other ways of looking at it as well. I mean, some people talk about essentially the total value of crops that would be lost. I mean, in a sense, you’re understating it because those are, that’s just food that human beings eat.

Lilah Raptopoulos
Right.

Jonathan Guthrie
The whole of the natural world is interdependent. So large forests have particular roles to play. Some of those plants are also pollinated by bees and everything tends to interlock.

Lilah Raptopoulos
Right.

Jonathan Guthrie
I think the point about it is it’s really an attempt to illustrate the very high value of nature if we see it not as an externality, but something that we actually have to pay for.

Lilah Raptopoulos
Could you briefly explain for our listeners who don’t know like what the threat is to bees these days, why they’re, why populations are declining?

Jonathan Guthrie
It’s very complicated and it seems to be multifactorial. There seems to be a lot of factors at play. One of these is something called colony collapse syndrome, which is simply a tendency of bees — worker bees, these are — to wander off and stop doing their jobs. And in the piece, I kind of talk about whether they’re sort of unionising and (laughter) rebelling against the queen who’s telling them what to do. Obviously, that’s not the real reason. It may be because there’s not enough food around and they start starving and that disrupts their behaviour. They can’t find enough patches of flowers and what they need really is flowering plants to flowering throughout the season. And I’m talking particularly here about wild bees and bumblebees so that they can sustain the colony throughout its cycle, during the year. And if you have relatively few flowers, lots and lots of herbicides, for example, which you get around monocultures, lots of pesticides like neonicotinoids, then you’re killing the plants often that the bees feed on and you’re also killing the bees themselves. That seems to contribute to the problem, but there may be other things as well.

Lilah Raptopoulos
Yeah.

Jonathan Guthrie
But I think what you come down to is that they’re trying to tell us something unwittingly, that there’s something really, seriously wrong with the balance in nature and the balance between human beings and nature.

[MUSIC PLAYING]

Lilah Raptopoulos
What do you love about bees?

Jonathan Guthrie
A bee is just an amazing organism because she can do so many different things, this tiny animal. She’s a gatherer. She’s an aviator. She can fly fast in straight lines for actually quite long distances given her size. She can then dodge like a skilled helicopter pilot between lots and lots of different flowers on a flower head. She’s a soldier because she can defend her colony if she needs to with her sting. She’s also a builder and she makes beautiful, hexagonal cells. And she’s a carer because she looks after all her sisters and brothers in the colony. And all of this in just a few weeks generally that the worker bee lives for. So this is an amazing multipurpose animal.

Lilah Raptopoulos
So there are a few things you can do to save bees. One of them is individual.

Jonathan Guthrie
If you’ve got a balcony or a garden, you can plant the kind of flowers they like, which are typically blue, single blooms, and also have a bit of a succession through the year. And I think it’s good for us to see them flying about and doing their jobs as brilliantly as they do, and as well as good for them.

Lilah Raptopoulos
If you’re feeling extra ambitious, you could get involved politically.

Jonathan Guthrie
I think we should be lobbying. We should be lobbying politicians and lawmakers to try and encourage biodiversity more, to try and change agricultural practises. I think we should be talking to farmers and farmers’ groups and understanding where they’re coming from. They’ve really been told in the western hemisphere since the, really the second world war and during that conflict, that their aim is to produce as much food as they possibly can on as little lands as possible.

Lilah Raptopoulos
Right.

Jonathan Guthrie
And understandably, they don’t always like the idea of a more biodiverse countryside, but I think we need to understand them and persuade them.

Lilah Raptopoulos
And Jonathan thinks that’s worth it, because if we actually organised ourselves more sensibly, we wouldn’t need to be doing things like creating fake bees to replace the real ones.

Jonathan Guthrie
It just seems to me something that makes me want to hold my head in my hands. So, for example, researchers at Harvard who are trying to make an artificial bee that will fly around and pollinate plants. There are some other technologists who have a system where you have little machines that zoom about puffing air at plants to try and blow pollen from one flower to another.

Lilah Raptopoulos
This is quite literally a Black Mirror episode.

Jonathan Guthrie
Absolutely, yeah, it’s absolutely crazy. And you just think, why? Why spend money on this? You’re actually paying human beings to do something that a tiny animal can do about a hundred times better for nothing. Literally.

Lilah Raptopoulos
[Laughter] Right, right. All of this made me wonder what else we should be quantifying. You said that you’ve been covering pages of your notebooks with numbers?

Jonathan Guthrie
Yeah.

Lilah Raptopoulos
Trying to quantify natural capital.

Jonathan Guthrie
Yeah. Well, I’d probably like to do some more on carbon. I think carbon is really important. And I think the thing about the carbon burden of various different activities is it’s reasonably quantifiable and it’s also quite a sensible proxy for money. Money and carbon are quite interchangeable. I’ve done quite a lot of calculations on trees, which interest me a lot. I came to the conclusion that you’d have to cover a land of . . . a flat land surface about the same size as Norway, which has got of course lots of mountains and fjords on it, to grow enough trees to offset the yearly emissions from the airline industry.

[MUSIC PLAYING]

Lilah Raptopoulos
Do you have a lot of bees, Jonathan, in your backyard?

Jonathan Guthrie
Yeah. I’m not doing too badly at the moment. Yeah, I’m, I mean, I have a sort of rather untidy garden that has quite a lot of natural plants in it, and it’s actually been a reasonable year for them. And we’ve seen quite a lot of honeybees so there’s obviously local beekeepers still keeping their colonies going in South London and there are plenty of wild bees around at the moment as well — at least decent numbers of them, I’d say. So I’m reasonably hopeful.

Lilah Raptopoulos
Jonathan, this was really fascinating. Thank you so much for joining.

Jonathan Guthrie
Thank you. Thanks, Lilah.

[MUSIC PLAYING]

Topher Forhecz
That’s the show this week. Thank you for listening to FT Weekend, the podcast from the Financial Times. If you want to say hi, we love hearing from you. You can email us at ftweekendpodcast@ft.com and the show is on Twitter @FTWeekendPod. Links to everything mentioned today are in the show notes alongside a link to the best offers available on a subscription to the FT, including 50 per cent off a digital sub and a great deal on FT Weekend in print. Those offers are at FT.com/weekendpodcast. Make sure to use that link. I’m Topher Forhecz and here’s my team. Katya Kumkova is our senior producer. Lulu Smyth is our producer. Molly Nugent is our contributing producer. Sound engineers are Breen Turner and Sam Giovinco with original music by Metaphor Music and special thanks to Cheryl Brumley. Lilah Raptopoulos will be back next week. Have a wonderful weekend. See you soon.

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