How Much Money Does Max Save by Removing 87 Titles from Its Platform?

Let me just preface this piece by noting that I am not principally opposed to streaming platforms like Max removing content from their services if hosting that content is unreasonably detrimental to the company. I run a business, and though maximizing profits is not our ultimate goal, we also cannot afford to lose money. We try to balance coverage so that we can remain afloat by, say, running posts on Real Housewives or Britney Spears to absorb the losses incurred from reviews for small independent films or film festival releases.

I wouldn’t expect a corporation like Warner Brothers/Discovery to follow a similar model, but it’s not unreasonable to think that it would absorb minimal losses for the greater good in terms of making a platform appealing to subscribers and making a company hospitable to creators and artists.

This brings me to the streamers’ decision to remove content from their platforms, which they generally do to save money on residuals. We’ve probably all wondered how much money the streamers save by removing a title from their platform, and last week, Puck did a fairly comprehensive breakdown for Diary of a Future President, a two-season series that ran on Disney+. According to their estimates, Disney+ saved about $2.6 million over five years by removing the series. It would have been $4.5 million if the series had run for 3 seasons.

Meanwhile, over on Max, they have removed 87 titles from their platform according to a piece in Indiewire from May. Some of the titles are movies, and some are single-season series; in fact, most of them are single-season series, so the $2.6 million is residual savings probably runs high.

For the sake of this piece, however, let’s go with $2.6 million over five years for each of the 87 titles. That is a savings on residuals of about $45 million a year for 87 shows and movies. For what it’s worth, in the second quarter of 2023 alone, Warner Brothers/Discovery had $1.7 billion in free cash flow. In other words, the yearly cost of keeping these shows on their platforms is about 2.65 percent of their second-quarter cash flow. Or, to put it another way: These 87 shows would cost the same as 2.5 episodes of House of Dragons.

That’s not nothing — it’s more than the change WB/Discovery can find under its couch cushions — but is $45 million a year really worth the negative headlines, the pissed-off subscribers, and the upset and disappointed creators whose hard work has completely disappeared? If you’re David Zaslav — who has been paid, on average, $100 million a year for the last five years — then yes, apparently it is worth it.

Source: Puck, Indiewire