Judd Apatow on the ‘scary’ direction of streaming companies

When Judd Apatow is sounding the alarm on something, you listen.

As writer, director and producer, he has had his hands in some of the most beloved comedy movies in the past two decades including Walk Hard: The Dewey Cox Story, Bridesmaids, Trainwreck and The 40-Year-Old Virgin, plus TV shows Freaks and Geeks, Girls and The Larry Sanders Show.

In a wide-ranging interview with Vulture, Apatow went into how “scary” it was for him, as a creator of TV shows, to see the slowdown in the commissioning of new programs, and the direction of the entertainment industry.

Apatow was specifically talking about the revelation that US cable brand HBO has started to sell licences to its previously walled titles such as Sex and the City to Netflix.

“I’m of two minds. There’s a part me that’s an audience member: I’ll go and back and rewatch Deadwood or NYPD Blue or any of the David Milch shows. I understand why people like the comfort of television,” he said.

“But it’s a scary thing as a creator of television because of all the streamers going, ‘Wait a second, we don’t need to spend $US200 million on a new show. We can just bring back Barnaby Jones.’ They’re going to do it, then you’ll get fewer new shows. They’ll realise, ‘Oh wait, Netflix can just buy shows from HBO’ and I would assume they’re cheaper than making new ones.

“Then at some point, Netflix will sell its shows to HBO, and it’ll just be passing around all the episodes of Ballers for the rest of our lives.”

The number of scripted TV shows in the US fell 14 per cent last year, down to 516 from 600. The work stoppages of the dual writers and actors strikes contributed to the reduction but John Landgraf, the chief executive of US network FX, who has been tracking this for over a decade, said he believed the downward trend had started before the strikes.

The only other period in the past 10 years when US scripted series production went down was 2020, the first year of the pandemic, and it quickly rebounded as the streaming wars kicked on.

That war is now halted, if not over. After years of aggressive spending, the streaming business is contracting. Wall Street banks and financiers have demanded entertainment companies prioritise profit over growth, which has led to the reversal of “peak TV” trends and a flurry of cancellations.

Deep-pocketed companies, especially tech ones, have reined in the exorbitant bidding wars. Entertainment journalist Matt Belloni wrote in his Puck newsletter today that Netflix had pulled out of the race for the MrBeast TV series once the number neared $US100 million. Not long ago, Netflix could’ve easily gone toe-to-toe with Amazon, which won the rights, for another $US50 million or more.

HBO, owned by Warner Bros Discovery, isn’t the only one licencing its titles. Disney is also in talks with Netflix with selling off rights to some of its library, albeit this will not include its Pixar, Marvel and Star Wars brands.

Studios used to licence its stuff out all the time but once the streaming wars kicked off in earnest in the 2010s, the businesses held them back to keep it exclusive to its own platforms to drive subscription growth. But licencing can be lucrative and everyone is looking for another revenue track to offset the losses in producing expensive streaming shows and movies.

Amazon Prime spent $US465 million (plus $US250 million for the rights) on the first season of Lord of the Rings series The Rings of Power while its Citadel spy thriller cost a reported $US50 per episode. Netflix action movie Red Notice had a production price tag of $US200 million.

Yet, audiences will spend hours on an old show. Previously, when The Office US was available on Netflix’s US platform, it was consistently the most watched series in terms of time spent, even above Netflix’s flashy originals. In 2019, US streamer Peacock paid $US500 million for The Office US’s exclusive streaming rights.

Last year, legal drama Suits hit Netflix US for the first time (Suits had been on Netflix Australia for several years), and it shot up the streaming charts.

And engagement is the key, which also has Apatow warning of how priorities may be changing in Hollywood.

He said, “There are these corporate behemoths and people from the tech world taking over creativity. And for some of them – not all of them – their intentions are just eyeball time online. I don’t know if they’re obsessed with quality filmmaking in the way other owners of these entities have been in the past.

“That’s why they started calling it ‘content’. All of a sudden, they diminished it as much as it possibly could be. I don’t think it would be that weird if you read something in the paper that that Pornhub bought Paramount+.”