TV Executive Ken Basin Explains Why Hollywood Imploded [Full Q&A]

In Ken Basin’s 2018 book The Business of Television, the executive producer shared everything he’d learned from a career at Paramount Television Studios, Sony Pictures Television, and Amazon Studios. And then everything collapsed.

Streaming overtook cable, but it hasn’t been the financial lifeboat that Hollywood had hoped for. Basin, who recently updated his book for a second edition, told b. why rushing into apps backfired for many studios, how they can make TV feel special again, and what can be salvaged from the old playbook.

b.: You lay out so many strategies in this book that seem obvious, but the entertainment industry doesn’t follow them.

Basin: One of the things I learned between my more optimistic first edition and somewhat more cynical second edition is how many incentives there are for people to do the wrong thing because it is expedient in the moment or maybe seems like the only option in the moment. That’s a big part of the story of how we got to where the industry is today.

b.: Why have so many studios struggled to adapt to the streaming model?

Basin: A lot of what I saw these past 10 years was the studios trying to copy the better-funded streamers and struggling to figure out what to do with the arrival of these very deep-pocketed competitors who also had the luxury of defining success in a much less stringent way than the studios had to.

Content doesn’t necessarily have to be profitable on its own at Amazon if they can attribute Prime subscription decisions to it and tie it into the broader ecosystem. Content doesn’t have to be profitable at Apple if it’s moving devices, although I don’t think there’s any evidence that it is.

What the studios did, more than hold onto their old ways, was actually throw a lot of them out the window immediately. [They started] trying to get as big as possible on the assumption that scale was the key to survival and started modeling their own business practices on what Netflix, Amazon, and, later, Apple were doing. I think that really hurt them. It was less about holding on and more about playing follow-the-leader without a real vision for how it was supposed to work or what was supposed to come next. That really doesn’t amount to a vision.

The same was true of a lot of M&A activity. [The goal was] to get big because Netflix had gotten so big and because Amazon and Apple were so impossibly huge, but these mergers were not executed from a place of strategic vision. I lived through one of them — the re-merger of Viacom and Paramount — and I can tell you with some confidence that there was no plan.

b.: Is it more about putting better ideas in place then?

Basin: What you’d want to see from an M&A-based plan is a sharp understanding of how assets at one company can enhance or be enhanced by assets at the other company. One of my sayings is, “Bonus pool is destiny.” People don’t like to invest a lot of effort into things that are going to enhance some other divisions and bonuses but not their own. Because a lot of these mergers were undertaken without a strong strategic vision of what came next, there’s no opportunity for leadership to lay that out and overcome those institutional barriers to effective integration. So what you end up with is layoffs, layoffs, and more layoffs.

b.: Will we reach a point — especially with bundles — where everything becomes less siloed? With 12 different streaming services, people are questioning whether they’re getting their money’s worth.

Basin: I am a believer in bundling, and I think the way people think and talk about bundling reflects a general insight of social science: People are terrible at knowing what will actually make them happy. 

I understand the instinct that sets people against bundling. You want to pay for what you’re using. The idea [with cable] that you’re paying $100 a month for 120 channels and you watch 11 of them doesn’t feel like a good deal.

The analogy I always use for an unbundled product experience is airline travel. You [formerly] paid one price and you got your seat assignment, overhead luggage, checked luggage, drink, meal, headphones, and blanket. Now you pretty much pay individually for every one of those things. Up until about a year and a half ago, airline travel — adjusted for inflation — was the cheapest it had been in a generation, but I don’t think anybody thought it felt cheaper or better.

People underestimate how much they hate making individualized value judgments on what they want, and they underestimate how much they value the knowledge that something is there if they want it — even if they don’t use it. 

Bundling facilitates and promotes more niche content. If everything had to stand alone as a subscription, you’d have to appeal to the widest possible audience, leading to broader programming. Everything starts to feel the same. Most would say the golden age of TV is over, with shows not as exciting as they were seven years ago. That’s partly because content is programmed for mass audiences. Think about the cable bundle. Yeah, there weren’t necessarily a ton of people watching Ovation — the network about opera programming — and maybe Animal Planet only ever got a certain number of viewers. But there were people who were really excited about that content and valued its existence. That content can’t necessarily exist in an entirely unbundled world.

It’s hard to tell people, “You should really make your purchasing decisions on the basis of what they’re going to do for the content ecosystem overall.” That’s not really an effective argument. But I say to people more generally: If you don’t like the content that’s out there, you should start paying for the things you like. The market responds to economic signals. If you merely complain about the absence of something but don’t put your dollars to it, it will not be created. Your dollars are your vote for the type of products you want.

b.: People don’t want to pay for media, and then they wonder why they don’t like what they’re getting. Same goes for social media. It’s a free service — and if you’re not paying for it, you’re the product, as the saying goes.

Basin: I pay for multiple newspapers — far more than I actually read. If I don’t, then all that’s going to be left is algorithmically created content. I have the luxury in my life of making those choices. I’m able to support the things I care about. Not everybody has that luxury to the same extent, but, at the very least, people need to recognize that their attitude about what is and is not worth paying for defines the world in which they live.

I think people intuitively get that in certain contexts — the creator economy, Patreon, even OnlyFans — where you feel that one-to-one relationship with the person on the other side. People don’t have that same instinct for some big, faceless corporation. “Well, why does my support for that corporation matter?” It doesn’t. It’s not a moral issue, it’s a practical issue. They’re going to give you what they are incentivized to give you.

b.: If you had to suggest one bold move that could shake things up, what would it be?

Basin: The short answer is windowing. Streaming services commission content from outside studios, but their own content is exclusive to their service forever. Think about Netflix’s early landmark original series: House of Cards, Daredevil, Narcos, and 13 Reasons Why. Their final episodes were released in 2018, 2018, 2017, and 2020, meaning they will be fully exclusive to Netflix until 2028, 2028, 2027, and 2030. I don’t believe there’s anyone who is keeping their Netflix subscription solely because it’s the only place to find those shows.

I think people have treated exclusivity as an unalloyed good without engaging in a real cost-benefit analysis of when exclusivity is good and when it is harmful. How much money is it worth in both directions? It may be an inexact science, but there should be an effort to really value exclusivity as opposed to treating it as sacrosanct.

Windowing is this broader category of taking something that’s made and making it available in different media at different times. Usually that means broadening access to the content and lowering the cost of acquiring it over time. That’s one of the oldest business models of TV or content of any kind, which seems to have largely been walked away from in the past 10 years. That can and should make a big comeback.

b.: How can networks make content feel like a special event, especially with so much out there?

Basin: There’s something lost when people aren’t watching the same thing at the same time. In the entertainment industry, the last big example of this was Succession. If you worked at a Hollywood studio, you had to watch Succession on Sunday because it was going to be discussed in the staff meeting on Monday. There was something really great about that, and it made watching and discussing it more fun, as opposed to my usual, “Oh, are you watching this?” “No, I haven’t seen it yet.”

If we experience a show together, I’m much more likely to want to return for the second season, especially in a world where second seasons are delayed by 18 or 24 months as opposed to annualized. When you make TV a solitary experience, you reduce the emotional incentive to return to it later.

People debate the merits of binge versus episodic release. Netflix is still very committed to binge-releasing as part of their brand. Other streamers have become much more varied in their approaches, but that’s one way to have your cake and eat it too. When you drive that kind of fandom, you open up more opportunities for spinoffs, location-based entertainment, or merchandising.

It’s hard to generate that level of fandom when — even though many people watch a show — they’re all watching it alone.

The Business of Television is available now.

This Q&A first appeared in the b. newsletter. Subscribe now!