this post was submitted on 10 Jan 2024
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Tax loss write-off?
Production of any show is a "write off". You can write off any business related costs. Cancelling a show doesn't change that.
Cancelling does stop the current spending on that show, and promote other shows above it. That's the only savings they get. Spending $200 million and cancelling a show after a month is a boneheaded chain of decisions.
Marketing for Hollywood shows and movies is normally a huge fraction of the budget. If they spend $200m to make the show and realize it's shit, if they cancel the marketing budget the loss might be smaller than if they spend $150m to market the shit out of it and it flops like they expected.
What sucks is when they remove it from their own streaming services. I can't see how that helps anyone. It costs next to nothing to add it to the catalogue and make it available to anybody who happens to find it. That way all the hard work of the actors, directors, gaffers, best boys, and everyone else involved isn't just thrown away.
Maybe that's why they are on this kick of annual price increases, under the guise of "rising costs" due to "inflation".
They are just bad at running a business. They were the only game in town for a long time. They still didn't make money. That's pretty bad.
I'm pretty sure it's for tax deductions as it's a loss if they cancel it. The cost to host the show would be completely negotiable as people would just watch something else.
It's not an extra write off just because it doesn't make money. The tax effect is the same as a successful show.
I'm pretty sure that's not the case and that they can't write it off as a loss unless they cancel it. I've specifically read about that happening with HBO, Disney and Netflix.
To chalk it up to stupidity when it's a reoccurring thing among big businesses is stupidity; they're doing it for a reason and typically that reason is money.
Ooh so it's both
Kevon is right, one tax benefit is the cost of the show: whether they cancel it or not they get to write off those expenses, and they get a tax break there
Chris would be correct too though: if Netflix holds the IP as assets on the balance sheet, they'd be held at some present value of expected royalties. When they cancel the show id imagine that asset value takes a shit, that's a write off, so tax benefit there
That said no business does this to make money from the tax asset, you have to lose more than the government gives you back
More likely Netflix is high off it's own farts and thinks just money can make cinema magic and it clearly can't.
You "pretty sure" and think you read something? I'm telling you, all production costs are tax deductions. As long as they're actual business expenses, not personal ones. It doesn't matter if the show is a success. I'm telling you that's how accounting works. There's no check box if a show is successful.
Promoting the show is a different cost that they will save now that they cancelled it. Link the article you read.
I'm pretty sure you can manage a search about why streaming platforms remove shows. Disney did it with Willow and HBO did it with loads of shows after the merger.
It's not like you have cited shit and you're the one making claims about taxes from the start.