Behind the scenes of the filming of a TV show.
People don't own what they watch anymore. 91% of U.S. internet households now subscribe to at least one streaming service. And the ability of Americans to actually watch anything else using a physically owned item like a DVD is becoming more and more difficult. For one, most households don't even have the player to do it anymore. DVD player ownership went from over 80% of households in 2008 to falling under 50% by 2022. And most computers don't even come with any type of disc reader anymore. By the mid-2020s, the average American family was spending over $100 a month on video services that stream access. Households now spend nearly 5 hours a day streaming this video content. Netflix and its rivals often advertise the sheer size of their libraries by pointing out the thousands of titles they have. But volume isn't the same as availability. A platform can boast a five-figure title count while quietly deciding what doesn't get included.
Consider what happened to Discovery and TLC's programming from the 1990s and early 2000s. This was the era when TLC still stood for The Learning Channel and Discovery aired educational and documentary rather than so-called "reality" shows that were actually scripted more like drama or even like situational comedies. Titles like Paleoworld, the first multi-season paleontology series ever produced, and Assignment Discovery, an original classroom-oriented series Discovery commissioned starting in 1989 aren't easily found within the streaming ecosystem that the Discovery Channel and TLC are now a part of. Discovery Channel and TLC were originally owned by Discovery Incorporated, the company John Hendricks founded in 1982. In April 2022, Discovery, Inc. merged with WarnerMedia to form Warner Bros. Discovery, a $43 billion deal. That merger is what put Discovery Channel and TLC under the same corporate control as HBO, Warner Bros. film and TV, and CNN. A vast amount of educational content that was available through Discovery when it was its own entity basically vanished. And what survived was mostly the "reality" and "lifestyle" content. But if they bought control over a massive portfolio of content, then why not show it all?
Cult classics like Napoleon Dynamite, The Big Lebowski, and Fight Club made money from DVD sales than they did in theaters. It became a Hollywood cliché that a film's release in theaters was just an expensive commercial for the DVD release that would actually pay the bills.
To understand how streaming platforms can benefit from not showing you something, you first need to understand how studios account for what they make. When a studio spends money making a movie or show, that spending doesn't just disappear from the books. In the artificially complex world of finance, the money spent on a documentary or movie has now become an asset, similar to how a company might list a building or a patent as something it owns. The studio expects that asset to earn money back over time through streaming, licensing, and sales. And due to this, it amortizes the cost. Instead of counting the whole cost up front, it spreads that cost out over time. It would match the cost against the revenue as the title actually earns money. But when it decides to shelve, cancel, or simply write off the movie or documentary entirely rather than release it, they use special tax provisions to turn that loss into a discount on taxes they would have paid for other sources of revenue. That declaration is called an impairment. In plain terms, it means the company is formally stating "this thing we once expected to make money is now worth nothing." And the government gives them a discount for the loss on their tax bill.
Studios can turn an unreleased or already-aired title into a tax write-off simply by declaring it "abandoned." This is what happened with Warner Bros. Discovery's Batgirl. The film was fully shot and $90 million had already been spent on it. Rather than finish and release it, the studio declared it abandoned, wrote off the full cost, and turned an unfinished movie into a tax deduction instead of a product. It wasn't a one-off, either. That same quarter, Warner Bros. Discovery disclosed between $2 billion and $2.5 billion in total content write-offs to Wall Street covering other works as well. And this doesn't just apply to projects that were developed but never released. It also incentivizes companies to simply shelve programs that are fully completed and already available. Studios' own financial filings track licensed content in the very same accounting bucket as self-produced titles, subject to the same write-off treatment. We actually saw a public example of this play out when Sony announced it would remove hundreds of Warner Bros. Discovery titles from customers' PlayStation libraries. Although it's unclear for certain that the attempt to remove content from Sony was tied to an effort to "write off" those titles, it definitely fits the pattern and the tax laws. For instance, an IRS rule finalized in 2004 pointed to the need for a company to show a genuine, affirmative act showing it has irrevocably cut ties to the property in order to get a deduction. And it started to be applied to studios widely after Financial Accounting Standards Board, the supposedly independent group that sets the accounting rules for public companies, issued a ruling in 2019 aligning the treatment of TV and streaming content in the same way movies were for accounting purposes. The streaming companies get write offs while consumers lose access to shows and programming.
Aaron Paul won three Emmys for Breaking Bad and made nothing from Netflix streaming it. Under the old DVD residual system, a television hit sold on DVDs could have paid him for decades. Under streaming's flat residual model, he reported earning nothing at all from Netflix streams of it.
While exculsively streamed content can disappear because of changes in tax filings, physical media never had this problem. A write-off only works because the company still controls access to the thing being written off. There's no balance sheet entry to erase and no license to expire on a DVD already sitting on your shelf. Once it's in your hands, the transaction is done, and the content is yours no matter what a studio's accountants decide to do with what's left of their own rights. Disney famously cycled titles in and out of its "vault," but a family that had already bought a copy still had a movie regardless of corporate strategy. Physical media has also been the thing that rescued films from total loss. For instance, countless silent and early sound-era films were destroyed outright by studios themselves because vault space was expensive or a studio had gone out of business. Many of the works that would have gone down with those failures, only survive today because private prints or later home-video copies were sold.
That same ownership model built an entire economy around it. DVD sales and rentals created a long tail, which is an economics term describing a pattern where a huge number of low-demand or niche items added together can rival or even exceed the revenue generated by a small number of high-demand "hit" items. This long tail economy made it profitable to produce mid-budget dramas and niche documentaries that might not do so well in theaters but could still turn a profit over years of rental shelves, library licensing, and DVD sales. This gave many more filmmakers and investigative journalists a path to funding that didn't depend on pleasing an algorithm on day one. But beyond the long tail change, streaming also changed who's actually making the money.
The inside of a DVD player.
Under the old system, actors and writers earned residuals. These were additional payments triggered every time a show reran on broadcast or every time someone bought a DVD, Blu-ray, or VHS tape. Those payments were tied to how much the item was consumed. A hit that kept airing or kept selling kept paying out to the people who made it, for years. Chris Browning, an actor who appeared in the Will Smith film Bright streamed on Netflix, illustrates the point in an interview he gave about his income. "If it was back in the old DVD residuals days, I would have got a $25,000 residual check. I got $271 from Netflix." It doesn't matter if one person watches an episode once or hundreds of people watch it numerous times each. The residual payment doesn't change because streaming residuals are structured as flat payments largely separate from actual viewership, unlike DVD-era residuals which were directly tied to units sold or times aired.
That collapse is what makes something like Orwell's "memory hole," the device in his dystopian novel 1984 by which inconvenient records were simply destroyed and made to have never existed, now potentially possible in some ways. The proprietary, view-only model of streaming companies mean a title that isn't sold physically effectively means it doesn't exist for most people. And current law still permits personal recording, but the industry has steadily closed that door at the hardware level. Encryption that can be used to restrict access to content is increasingly built into HDMI, DVI, and DisplayPort connections across smart TVs, streaming sticks, game consoles, and even browsers to prevent capture during playback. It's why you often can't screenshot or record a Netflix movie or Disney+ cartoon and only get a blank screen when you try. The devices sitting on top of your TV increasingly decide, on the platform's behalf, what you're allowed to keep. And when a streaming company or studio decides to keep things from reaching you at all, they often get a tax benefit for doing it.
