Every May brings another television season to an end, leaving behind many shows that were not successful.
It can be confusing to understand why some shows get canceled and others are renewed, even for the most avid TV watchers. Some shows are being canceled, and some others are renewed. This is due to the changing economics of television.
It’s difficult to imagine a scenario like that of the classic sitcom Seinfeld. This show, which had a rough start creatively and in ratings, became a favorite because it believed in its potential.
Kyle Killen, veteran showrunner who is also a rating monitor, said that it seems unlikely that it would have overcome any of the hurdles.
Like everything else in TV, time is money. It is becoming increasingly expensive to give a show the time it needs to succeed if it isn’t a hit immediately.
However, low-rated shows have one advantage: The complex economics of the industry make it difficult to rank. The TV audience is becoming smaller and more fragmented, making it harder to understand rating data. Ratings are not the only factor that determines whether a show survives or fails.
We’re here for you. There are many reasons your show could have been canceled. These seven reasons are most likely.
Reason No. 1: The show nearly immediately failed
Anyone who works in television networks will tell you the same. There is still a line that shows a show must not drop if it wants its show to be renewed.
Kevin Biegel (co-creator and creator of Cougar Town) told me that it is still about ratings.
The problem is that every show has a different threshold at which ratings are so low they merit cancellation. Every show airs under different circumstances, with different budgets, and with different goals.
The obvious flops are always obvious. Just look at Fox’s shaky sitcom Mulaney. It debuted on a Sunday, 2014 to only 2.3m viewers. This was half of the audience who watched Family Guy just before it. Mulaney was canceled quickly after such poor ratings in such a high-profile slot.
Not all cases are obvious. Ratings have plummeted across the board, making it difficult to properly assess them.
“These things can look like a 50 percent increase in the ratings of a TV show. But it’s almost meaningless because the numbers you’re discussing are so small that the 50 percent jump feels like noise in data. Killen explained that this jump takes very few people. “Many people are competing for your attention, but there are far fewer eyeballs.”
This means that networks are increasingly looking to other metrics to determine the fate of shows.
Reason No. 2: The show failed in ratings and the studio didn’t lower the licensing fees
Many TV viewers don’t realize this: The TV programs you see every night, while technically their property, aren’t actually. They are leased.
tv_shows_graphic_static
This graphic can be modified in many ways depending on the television show. However, this is the basic basis from which most people working in network television are operating.
The chain of ownership looks something like this:
The TV show is made by the production company and studio. The studio owns the show and receives nearly all of its revenues. While this arrangement was not so significant when the only secondary revenue stream for the show was syndication, it is now a major issue because there are numerous ways to make money (streaming, international distribution, and DVD sales). Studios need to produce as many episodes as they can to make a profit from a show.
However, the studio needs to find a way that the production costs of the show can be amortized in today’s economy. Cheap TV shows can be very expensive to produce. That means finding a network that will air it. Sometimes the studio will sign up a production partnership, which complicates things.
The studio pays what’s called a license fee. It is an agreement to spend a specific amount of money per episode to air the show a specified number of times. The network also receives ad revenue from these airings. The network and the studio may sometimes split the advertising revenue. Let’s just keep it simple for now. Because the network does not directly pay for production costs, huge hits can make real money.
Now that you have read the story, here is the graphic, again in motion.
The licensing fee is the most misunderstood part of TV. A studio could lower the licensing fee to zero if they wanted to guarantee that a show reaches a certain amount of episodes. But that would create a dangerous precedent. The studio can’t guarantee every episode that they produce is a complete income black hole.
It is not uncommon for a network to crunch the numbers to determine a licensing price it can afford to pay in a case that has borderline ratings. Studio expenses are then incurred in hopes of recouping that money down the line.
Mindy Project is a prime example of such a scenario. It was produced and aired by NBCUniversal. Its rating performance was not good but it wasn’t so bad that it had to be canceled immediately. Fox didn’t realize the potential benefits that Mindy would bring to the streaming or syndication markets. This is almost certainly why they canceled it in 2015. It was later taken up by Hulu to be aired for multiple seasons. Hulu has lower viewing thresholds.
However, this approach is also applicable to shows with bigger hits such as the recently canceled Last Man Standing. It was broadcast by ABC, but 20th Century Fox-owned the show. Its ratings were strong, but ABC canceled the Trending TV Series after its sixth season. This was probably because it didn’t expect to make much more from the subsequent episodes.
It’s becoming more common for networks not to air shows from studios owned by their corporate sibling.
Reason no. 3: The show failed to reach its intended audience and was not owned by the same company that owns the network.
Let’s again look at The Mindy Project. Its ratings were not as high as those of New Girl (another Fox comedy that was renewed for a shorter final season), but they weren’t enough to suggest that one show should prevail over the other. Except New Girl was renewed while Mindy left for Hulu. Why? Fox Television, the corporate sister of Fox Broadcasting Company owns New Girl and NBC owns Mindy.
Many TV reporters talk about a network “owning” a show. is technically owned and aired on Fox Television. But, since the two companies are one corporation, all of the money ends in the same place. It is not important enough to simply say Fox “owns. Fox’s studio and network are managed by the same people Dana Walden Gary Newman.
Because the real money in TV is in the syndication or streaming markets — more details here — many networks are involved with asset management. That is, making sure that enough episodes of certain shows are produced so they can be financially profitable down the road.
Look no further than ABC’s Agents of S.H.I.E.L.D. This show is not a rating powerhouse but it helps both ABC Studios (and its sister corporate sibling Marvel) to continue their existence. This money eventually returns to Disney, which is the parent corporation of both the network and the studio, as well as Marvel. Despite its poor ratings, it will be back for a fifth series. (But, such an arrangement ultimately did not help ABC’s other Marvel series Agent Carter.
Before 1993 repealed the Financial Interest and Syndication Rules, there was a limit on the number of shows that could be produced in a corporate relationship with a TV network. However, there is no limit to how many shows a TV network can “own.” Every year, that number increases.
Then why would a network purchase or sell a show to a non-corporate partner when it could buy the show? Some shows work better on particular networks. Fox Television produces Modern Family. But it licensed the show to ABC. ABC has a better track record with family comedy. Warner Bros. is another example of a third-party company that has no ownership interest in any of four major networks but sells equally to all its partners.
Reason no. 4: The show was not syndicated or streamable and had low ratings
Look at TV history. A show that has reached season three is more likely than a show who only reached season two. Why? Syndication.
Syndication, which is the lucrative after-air marketplace for TV shows, is where the most successful shows have their long afterlives after they have finished their broadcast run. Before the advent of cable, most studios and production companies lost revenue on TV shows. Then, they entered syndication.
Syndication means that a show’s reruns air at non-primetime hours, on local stations, and any time during the day on cable. Think of a show like Seinfeld that continues to air as reruns. Sony, in this case, is the owner of the show and receives a fee per episode for reruns.
Depending on the era, the minimum required number of episodes for syndication viability was between 88-100 episodes. However, many shows have chosen to break the trend and go into syndication without a lot of episodes (especially shows for children), and this has led to a decrease in the number of episodes.
With the growth of cable, there are more opportunities for shows to make money than ever before. Studios can now sell their shows in international markets via syndication, cable reruns, and Amazon. Shows can also be sold on iTunes and Amazon. These are just three of many examples.
It’s easy to see why corporations love to own both the network that airs the show and the studios that produce it. There are so many channels and ways to make cash. This allows them to collect both ad and after air revenue.
However, this works only if a show lasts for enough time to air a reasonable number of episodes. Netflix and Hulu are both home to many one-season series, but due to the licensing fee (a per-episode cost), studios often make less money with shorter-run shows that have fewer episodes than shows that reach 100 episodes. However, there are some exceptions, especially when it comes to beloved cult series.
Although they only make up a small portion of network decision-making, plays on a streaming site like Hulu can affect a show’s fate.
“Those numbers were discounted by networks a couple of years ago. Biegel explained that they now see them as if to say “Oh, okay.”
Advertisers also live streaming services, as they like their young audiences and ability to skip ads.
Biegel stated, “The important thing is to prove that people are watching your program and that they’re valuable to the network. That’s what’s going make or break advertisers wanting to reach them.”
Reason No. 5: It received poor ratings and was costly
This is more likely for a network-owned show. Remember Fox’s Very Human that was canceled in 2014. Although the robot cop series was a strong-enough rating performer it was still plagued with high visual effects costs. It was not a Fox show and it lasted only 13 episodes. (This was also the fate of Last Man Standing. It boasted a handsome salary for its star Tim Allen.
Although production expenses are usually more expensive for older shows it’s still an issue. Even a show “owned” or managed by its network will face harsher scrutiny when it renews.
Reason no. Reason 6: The show received low ratings and no one liked it (at the networks).
Although critics and fans would love to believe they could extend a show’s life by being more passionate, evidence is lacking to support this claim.
“To be completely honest, most network programs are very, very costly. … Biegel explained to me that it is difficult to justify spending $40 to 50 million on a program that people love but no one watches.”
It does assist if a show is loved by network executives and has few notable naysayers.
This isn’t true as much as TV-lovers might wish.
Biegel said that it is rare to find a show that everyone loves. He said that sometimes, though, the network will take on a show as its baby, or special pet project.
For a great example, check out NBC’s Broadway set. Robert Greenblatt said that it was a favorite of his network’s president. It earned a second season, even though the first season ratings dropped a little with each episode. It is unlikely that the show will be bought by the same people who decide its fate. Smash didn’t catch on after just two seasons and was canceled in 2013.
Reason No. 7: The show has gotten too old
This is the hardest reason to cancel a show because it is so heavily influenced by figures that aren’t available publicly. As you’d expect the salaries of everyone involved in a show’s creation go up as it ages, just like you might receive a raise if your performance is consistent year after year.
There comes a time when a show’s success is not enough to offset the cost of its production. This is why shows like Bones (which wrapped its 12th and last season this spring) and CSI (which was canceled after 15 seasons) are subject to renewal every year. They are a reliable source of income for their respective networks but the studio must balance the financials to ensure that they can keep making money from production. Once everything becomes too expensive, the show is canceled.
The same thing happened to ABC’s Cast in 2016. Even ABC Studios’ plans to eliminate two cast members (including Stana Katic), couldn’t cut the budget enough for the network to take the show. It’s a case of two companies owning the same network but disagreeing about a show’s fate. It was simply too costly after eight seasons.
Killen said to me, “It’s just nature of the beast that everyone gets canceled eventually and some of us very fast.” It’s what it is.
It’s a plus that shows that have been running for more than one season are likely to be a hit. That means they will likely have enough notice to plan a series ending. Or, the creators might decide to end their show. This is the happiest end-of-show scenario. No one can afford to stop, but everyone wants to make it a victory lap.
But that doesn’t mean fans will be satisfied if the show is canceled. You can still hope. All long-running TV shows will live on through cable reruns, streaming services, and other parts of the great entertainment ecosystem. These shows will be with your every need.