Flooding the Market / by Chris Weigl

I spent a little time on Hulu this weekend trying to find Shipping Wars so I could watch the episodes from seasons two, three and four that Netflix doesn’t have.  I was amazed at how many shows Hulu actually has, but I was absolutely flabbergasted by the quantity of low budget shows they had from networks I had never heard of.  This is a growing trend.  On Wall Street this is known as “flooding the market.”  Before the subprime mortgage crisis became a crisis stockbrokers were building up massive funds filled with bad debt that even bankers knew would never get repaid.  The big money managers, the mutual fund companies, even the ratings agencies had no understanding of what was in these things.  Most people didn’t know what a collateralized debt obligation was and many still don’t.  But these CDOs hit the market and were given a AAA credit rating by the ratings agencies because they didn’t know how much bad debt was loaded into these things.  Once big companies like AIG went under some people started to notice and many realized in 2008 that unless someone stepped in and guaranteed the bad loans that the banks should have never offered in the first place that the entire banking system in the US and around the world would be crippled.

The crisis was pretty bad and the United States underwent the largest peacetime recession since the 1930’s.  Now, I’m not trying to compare services like Hulu with the banks and credit lenders that screwed millions of people out of their homes, but the principle of flooding the market is the same.  Almost every streaming service that I know of does this.  They advertise the wealth and diversity of content that they offer as if a wide selection makes up for not locking up the rights to the shows everyone wants to watch.  Hulu can’t stream Shipping Wars on my TV because they have a web only license for the show.  This is great for Hulu, but bad for everyone who doesn’t watch television on their computer.  It really is brilliant marketing because Hulu can claim they have the show without actually providing the show to the customer.  If you are not a Hulu customer you wouldn’t know that you can only access a variety of shows from the internet and not over TV or mobile devices (which is where most people use Hulu.)  It’s not false advertising because they do have the show they just have certain stipulations as to how and where you can watch it.  This is the case with Shipping Wars as I found out much to my dismay.

The logical question that came across my mind as I was filtering through all of these shows that even on a macro level seemed like terrible programming choices was: why didn’t some of these studios just work together to put together a better product?  If you have something you’re going to do you might as well do it well.  Making a TV show is a lot of work.  It requires a lot of man hours, a lot of technical know how, a lot of people and if it’s good; a lot of publicity.  None of this is the case if you’re making a show that no one knows is even out there and when the production quality is as bad as it is on many of these shows it is a good thing that more people don’t watch this material as they would understand just how bad of condition the state of entertainment is in.  Seriously, if you think what’s on the network is bad go on Hulu, pick a random letter and watch the first show that comes up.  The odds are pretty good that whatever you land on will make you very happy that you make the programming choices that you do.  And maybe that’s part of why they do this as well.  If you think about it it makes sense for a company like Hulu to put so much bad programming in with their A-list stuff because it makes that stuff stick out as really high quality.  You, in turn, probably have a higher opinion of Hulu because of this and don’t mind shuffling through the bad stuff to get at the stuff you want.

The great tragedy in all of this is that production companies are going to continue making bad television and bad movies because they simply don’t want to put one project aside to help another company make their project better.  This is where competition in free market economics results in a far poorer product.  If the incentive system for studios were to turn out high quality entertainment they would churn out high quality entertainment, but the truth is that everyone needs to help flood the airwaves.  If you put out too much quality content people will start having expectations of you that are far too high for anyone to reasonably meet.  This doesn’t mean that quality should be something that we work for on some projects and not on others however.  If anything this should force us to re-evaluate how we allocate our resources. 

Rather than making five bad shows for instance, I’d urge a new studio like Amazon to churn out one good show.  There’s a reason that staff writers make more than $64,000 over the lifetime of their deals ($64,000 is the payment Amazon gives first-time writers IN TOTAL for their creative ideas.)  You can’t pay someone a lousy salary and still expect a superior product.  This is where free market capitalism works.  With the right incentives people can and often do produce the highest quality product possible.  The incentives need to be right though and the product has to have a reasonable chance at success.  It is because no one can guarantee these things that some studios don’t even try and make stuff worth watching.  For these companies just putting out something, anything is good enough to keep them in business.  We should be working together to put these slackers out of business by flooding the market with so much quality content that no one would even bother to look at content that didn’t meet a standard of excellence that customers have set for their entertainment.