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SYLVIE DOUGLIS, BYLINE: This is PLANET MONEY from NPR.

(SOUNDBITE OF COIN SPINNING)

ALEXI HOROWITZ-GHAZI, HOST:

When it comes to sifting through the overwhelming amount of streaming TV shows these days, Emme Lund has a pretty simple strategy.

EMME LUND: I don't watch things to the end if I don't like them. If a show doesn't hold me for the first few episodes, I'm like, well, it's not for me.

NICK FOUNTAIN: You don't fall for the sunk-costs fallacy.

LUND: No. Time is precious.

FOUNTAIN: (Laughter).

LUND: My attention is precious.

FOUNTAIN: So last fall, when she got hooked on a new HBO Max show called "Made For Love," it was kind of a big deal.

HOROWITZ-GHAZI: The show is a sort of dystopian dark comedy about a woman trying to leave her tech-billionaire husband only to find out that he's implanted a chip in her brain - a prototype for a chip he wants to sell to the public as a way to help couples sync up.

(SOUNDBITE OF TV SHOW, "MADE FOR LOVE")

BILLY MAGNUSSEN: (As Byron Gogol) We've created your phones, your computers, your software. And now it's time for love to evolve, too.

LUND: It's funny, and it's also so dark and sad.

(SOUNDBITE OF TV SHOW, "MADE FOR LOVE")

MAGNUSSEN: (As Byron Gogol) We made it possible because you were made for love.

LUND: And also, Ray Romano is - plays her father, and he's, like, very endearing.

FOUNTAIN: Still as lovable as ever?

LUND: Yes. And he is dating or partnered with a rubber sex doll. And it's just so absurd. It's - it sort of reminded me of what is exciting about television.

FOUNTAIN: Emme blew through all the episodes in just a couple of days.

LUND: Yeah. I was sort of obsessed with the show for a second and I was telling everyone I thought would like it that they should watch it.

HOROWITZ-GHAZI: But then just a few weeks later, before any of her friends had gotten the chance to take her up on the recommendation, Emme came across a tweet with a kind of confusing piece of news. HBO Max's parent company had announced that "Made For Love" was being removed from the platform - not just that they wouldn't be making any new episodes. The two seasons that had already been made would disappear from the service altogether. At least in the U.S., no one would be able to stream it, and there wouldn't be a way to buy or rent the episodes from other platforms. It was just sort of entering this digital limbo.

LUND: And I remember talking to at least one of my other friends where I was like, so I hope you didn't start it because now you're never going to get to see it.

FOUNTAIN: No narrative closure for you.

LUND: Yeah. And we spent some time being like, why would they do this? It makes no sense, and it just pisses us off.

FOUNTAIN: And Emme and her friends were not the only ones left wondering about why their favorite shows were vanishing.

(SOUNDBITE OF JAMES ALEXANDER DORMAN'S "SIDEWAYS GLANCE")

HOROWITZ-GHAZI: Because it wasn't just "Made For Love" that's disappeared mysteriously over the past year. And it wasn't just from HBO Max - dozens of shows from reboots like "The Twilight Zone" to lusty reality shows like "Fboy Island" to prestige blockbusters like "Westworld." All of a sudden, they were just gone.

Hello, and welcome to PLANET MONEY. I'm Alexi Horowitz-Gazi.

FOUNTAIN: And I'm Nick Fountain. Today on the show, why is this happening?

HOROWITZ-GHAZI: What is the economic logic for why these streaming platforms are taking down shows they've already paid millions of dollars to make? And what does this mean for the future of all our other favorite shows?

(SOUNDBITE OF JAMES ALEXANDER DORMAN'S "SIDEWAYS GLANCE")

HOROWITZ-GHAZI: To figure out why streaming shows like "Made For Love" are being mysteriously disappeared, we knew we were going to have to visit every corner of Hollywood from the writers room to the boardroom.

FOUNTAIN: And to start our quest for clues. We went to "Made For Love's" creator and showrunner Alissa Nutting, who is completely obsessed with making TV.

ALISSA NUTTING: I am a workaholic who loves stories.

(LAUGHTER)

FOUNTAIN: Like, what are your hobbies?

NUTTING: I don't have hobbies.

(LAUGHTER)

NUTTING: I mean, really - like, I want to be inside of a story every second of the day.

FOUNTAIN: Today's your lucky day...

NUTTING: (Laughter).

FOUNTAIN: ...Because we're inside one right now.

The Alissa story goes something like this - a young writer with bills to pay, a kindergarten-age daughter and dreams of becoming a television showrunner publishes a novel called "Made For Love" back in 2017.

HOROWITZ-GHAZI: She then spends about a year shopping the story around to Hollywood studios. And as it happened, she could not have picked a better time in television history to try to get into the business. Netflix had inspired panic among all the legacy media companies and tech juggernauts. These companies had rolled out their own new streaming services, and they were in the market for all sorts of content.

NUTTING: Like, Quibi (laughter) was sort of, you know, like, a whisper on everybody's lips. Disney+, Hulu - there were all kinds of places. And it was just like, you know, cable is dead, and, you know, this is the future.

FOUNTAIN: So Alissa was thrilled when her show got picked up and, even better, when she found out it was going to HBO Max.

Were you an HBO stan?

NUTTING: Oh, absolutely - "The Wire," "Sopranos," "True Detective," "True Blood," really everything they made.

FOUNTAIN: And now "Made For Love."

NUTTING: Right. Yes. So it felt great.

HOROWITZ-GHAZI: It's probably worth mentioning here that NPR receives financial support from HBO - also seemingly every other streaming company - Amazon Prime, Apple, which owns Apple TV, and also FX, the National Geographic Channel and 20th Century Fox, which are all owned by Disney.

FOUNTAIN: Anyways, back to Alissa's story. Alissa quickly discovered that getting a show greenlit and actually making that show are very different things.

HOROWITZ-GHAZI: Yeah, it turns out being in charge of a prestige TV operation means basically having to give up everything else in your life.

NUTTING: You can be a showrunner, you know, and a mother, but you can only do one of them well, I think, at any given time. And I always chose the one that had, like, millions of dollars and hundreds of people counting on me to do my job well.

FOUNTAIN: Sorry, kid.

HOROWITZ-GHAZI: But finally, after more than a year of work, the show comes out, gets positive reviews, and her hard work pays off. "Made For Love" gets picked up for another season. Alissa had kind of made it.

FOUNTAIN: Even last summer, when she found out that the show would not be renewed for a third season, she was disappointed, but she figured, you know, that's show business. She'd proven to herself and to her future employers that she could do the thing. And anyone who wanted to see her show could just pull up HBO Max and watch it.

HOROWITZ-GHAZI: But then, Alissa starts to hear about something troubling happening to other shows at HBO Max.

NUTTING: I remember hearing something - like, a rumor about the "Gordita Chronicles," you know, maybe disappearing.

FOUNTAIN: The "Gordita Chronicles" was another HBO Max original. Like "Made For Love," the show had gotten good reviews and had a fiercely loyal following, and now it was apparently at risk of being removed from the platform entirely.

NUTTING: And I mean, I was just so shocked, you know, because it's such a great show and had such, you know, wonderful critical reception. I remember feeling like, OK, like, nothing's safe.

HOROWITZ-GHAZI: Last August, HBO Max pulled dozens of shows and original movies off of their platform, from children's programming, like the Sesame Street spinoff "The Not-Too-Late Show With Elmo," to period dramas like "Vinyl."

FOUNTAIN: Now, both the "Gordita Chronicles" and "Made For Love" survived that round. But for Alissa, the whole thing was both terrifying and kind of baffling.

NUTTING: How does that make any sense? You know, like, if they have more shows on their streamer and things for people to watch, isn't it kind of, like, more money for them? And this just doesn't feel logical.

FOUNTAIN: Rumors going around on social media suggested that these moves had something to do with cost cutting at HBO Max's parent company and specifically something to do with tax write-offs.

HOROWITZ-GHAZI: In a particularly metamoment, John Oliver joked about this theory about HBO Max on his own show - streaming on HBO Max - riffing on the company's old slogan, it's not TV; it's HBO.

(SOUNDBITE OF TV SHOW, "LAST WEEK TONIGHT WITH JOHN OLIVER")

JOHN OLIVER: HBO Max - it's not TV. It's a series of tax write-offs to appease Wall Street.

FOUNTAIN: Now, let's poke at that theory a little bit. Here's how it goes. Last spring, HBO Max's parent company, WarnerMedia, was spun off by its former owner and merged with Discovery. And as part of that deal, the new company, Warner Bros. Discovery, had to take on around $50 billion in debt. And the company made plans to cut back on spending in all these different ways including, went the idea, on their tax bill.

HOROWITZ-GHAZI: Taxes for companies in the content game long had very specific rules because of how the business works. Movies and TV shows cost a ton of money upfront to make, but then, the money they earn comes in over the course of years as more and more people watch. So for a long time, companies were required to spread out their expenses to write off all the money they spent on the front end over the course of roughly the next decade.

FOUNTAIN: And the whole tax write-off theory seemed to hinge on the idea that Warner Bros. Discovery was saying, you know, all those shows that were taken down, they represent a loss to us. We spent a bunch of money on them, and we don't expect to get that money back. So let's just skip that whole spreading out the cost over 10 years thing and just take the whole tax write-off right now.

HOROWITZ-GHAZI: That theory, we should say, turned out to be mostly wrong, at least in the case of TV shows like "Made For Love." First, recent changes to the tax code mean that media companies no longer always have to wait to write off their expenses. And whatever savings Warner Bros. Discovery might have gotten on its tax bill probably wouldn't be worth all that much compared to the money they could still expect to make from those shows.

FOUNTAIN: But for "Made For Love" showrunner Alissa, whether the tax write off theory was right or wrong was besides the point. For her, all that really mattered was that last December more shows started getting taken down.

NUTTING: I would read any article about a show disappearing, and my first reaction was relief when I didn't see our show's name included. I just was like, please, just not us. Please, just not us. Please, just not us.

FOUNTAIN: Then one morning last December, she got the news. "Made For Love" was being removed from HBO Max, though Alissa did not hear about it from an executive at the company. Instead, a friend sent her a link to an article about it before Alissa even got out of bed.

NUTTING: I woke up to this text message. And I remember putting the phone back down, closing my eyes and thinking like, let's just try waking up again, and maybe I'll get a different result. But, yeah, I picked it back up, and I saw it again, and it was really sad.

HOROWITZ-GHAZI: Alissa had dedicated years of her life to making this show with the expectation that it would kind of live on forever. And now all of a sudden, it was just going dark.

(SOUNDBITE OF LAURENT DURY'S "MAGIC LIZARDS")

FOUNTAIN: And the real reasons behind what was happening to her show turned out not to be about tax write-offs, but about these tectonic shifts remaking the entertainment industry. That's after the break.

(SOUNDBITE OF LAURENT DURY'S "MAGIC LIZARDS")

HOROWITZ-GHAZI: In order to puzzle through why HBO Max seemed to be shelving so many streaming shows, we reached out to Warner Bros. Discovery, but they didn't make anybody available for an interview. We also read through their SEC filings, listened to earnings calls, but it was mostly corporate speak without a whole lot of clarity. So we went in search of a guide to this world, and we found David Offenberg.

DAVID OFFENBERG: As far as I can tell, I am the only tenured finance professor in the world specializing in film and TV.

FOUNTAIN: David teaches at Loyola Marymount University in Los Angeles. And as part of that job, he's constantly calling up Hollywood execs and asking them to - confidentially - spill the beans about the industry's latest financial machinations.

OFFENBERG: And now my brain is swollen with really obscure film and TV finance facts.

HOROWITZ-GHAZI: We ran theory No. 1 - the tax write-off theory - by David, and he said that would probably not free up enough money to justify taking a show off your platform on its own. But he did have a theory No. 2.

OFFENBERG: Theory No. 2 is that HBO Max is trying to also save on residuals.

FOUNTAIN: Residuals - residuals are the fees that a television network has to pay a show's cast and crew every time the program is run more than once. David says this system started back in the early days of television.

OFFENBERG: When the television channel would rebroadcast the same show and the actor said, hey, you're making money on that, but I should be making money on that, too, because you're using my performance.

HOROWITZ-GHAZI: If the network is going to sell ads every time they rerun the show that I wrote or directed or starred in, why should they get to keep all that money for themselves? Residuals are a way to make sure all these stakeholders get a little cut of the rerun action. And, David explains, a similar system has developed for streaming services, except they pay a flat fee annually instead of on a rerun-by-rerun basis.

FOUNTAIN: So every year that a streaming platform like HBO Max decides to keep a show on its site, it is agreeing to pay out all the original writers and directors and actors, regardless of how many people are actually watching their work.

OFFENBERG: One thing I can tell you about residuals is that they are more expensive in earlier years of the show's life and less expensive in later years. And so there is something of a heightened incentive to cancel a show and take it off the platform early in its life because that's when the residuals are most expensive.

HOROWITZ-GHAZI: David says that for an almost brand-new show like "Made For Love," pulling it down could potentially save the streaming service millions of dollars in residuals payments. By taking down some shows, platforms might also be cutting down on the costs of profit-sharing deals with big stars or royalties for things like the right to use a hit song in an episode.

FOUNTAIN: But David says the possible explanations for these disappearing shows doesn't stop there. And this is where theory No. 3 comes in - the revaluation of shows theory. For this theory, you got to think back to the moment a few years ago when the streaming platforms were feeling spendy because the name of the game then was just to scale up as fast as possible, try to avoid being devoured by Netflix. And so execs were greenlighting shows to fill their streaming libraries as fast as they could.

HOROWITZ-GHAZI: And the hope was that those libraries would become synonymous with each streaming company's brand and assure customers that they'd never run out of that sweet, sweet premium content. If you signed up for HBO Max, that meant you could graze your way through every episode of "Girls" and "True Detective" at your leisure.

FOUNTAIN: Then last spring, reports started cropping up about how this whole strategy might have started to stall out.

(SOUNDBITE OF MONTAGE)

UNIDENTIFIED NEWSCASTER #1: Netflix reported its first quarter earnings...

UNIDENTIFIED NEWSCASTER #2: The streaming giant losing - losing - 200,000 subscribers in the first...

UNIDENTIFIED NEWSCASTER #3: The first time Netflix has lost subscribers in a decade.

HOROWITZ-GHAZI: That is when the fantasy of an endlessly growing subscriber base came to an abrupt halt.

OFFENBERG: I would say the music at the streaming party stopped the day that Netflix announced it lost subscribers. That was the moment where the mentality in streaming switched from growth to maximizing revenue and minimizing costs.

HOROWITZ-GHAZI: Netflix itself did seem to bounce back, but the last year has been brutal for most of the other major streaming platforms. Collectively, they've lost billions of dollars in the last quarter.

FOUNTAIN: And while Warner Bros. Discovery may have pioneered the strategy of pulling shows from their platform, they are not alone.

OFFENBERG: Warner Bros. took the hit for the industry. They got the heat. They got the blame. And then every other streamer around town looked at that and said, ooh, that's a good idea; we should do that, too. And so it's definitely becoming the industry norm.

FOUNTAIN: And the boom times for showrunners and actors and writers and best boys may be coming to an end.

OFFENBERG: The business is maturing, and so because of that, fewer decisions are being made by the entrepreneurs in the room, and more are being made by the accountants.

FOUNTAIN: Which helps to explain why we've started to see all these different streaming companies crack down on password sharing, raise subscription prices and pull back on developing new shows.

HOROWITZ-GHAZI: Have we all just been living in, like, a subsidized dream world for the past five years when it comes to streaming content?

OFFENBERG: We have absolutely been living in a subsidized dream world. This is why these companies are losing so much money on their streaming platforms, is because they've been subsidizing them for for the past few years to get to scale, to get subscribers, and they can't sustain it.

HOROWITZ-GHAZI: And this is where we circle back to theory No. 3 - the revaluation of shows theory - because in the boom times, smaller, less popular shows could be justified because maybe they brought in a niche audience that grew the overall subscriber base. But David says with this increased focus on the bottom line, things are now a little more cut and dry.

OFFENBERG: There's two ways a show adds value to a streaming platform. One is, does it bring in new subscribers? And two, does it retain existing subscribers?

HOROWITZ-GHAZI: So think about what happens when a new season of "Bridgerton" comes out and you're like, oh, yeah, I got to sign back up for Netflix right now. "Bridgerton" is the kind of show that goes in category one, bringing in new subscribers. It's like a gateway show.

FOUNTAIN: Yeah. And Netflix expects some of those customers to cancel their subscriptions once they've binged whatever they signed up for. But they are hoping that they have enough stuff on offer to keep people around between the blockbusters, which brings us to category No. 2, the shows that retain subscribers - the retainers.

HOROWITZ-GHAZI: So this would be like you've finished the new season of "Bridgerton" and you're going through salacious romance withdrawal, and as you are frantically scrolling through Netflix, you stumble across - I don't know - "The Tinder Swindler," and you're like, well, I might as well burn through this one, too, now that I'm already signed up.

FOUNTAIN: Yeah. "Tinder Swindler" - that's a classic retainer.

HOROWITZ-GHAZI: Now, at this point, if a show is not in one of those two categories, it might fall into the dreaded category of library shows - the ones that streaming platforms used to rely on to give their subscribers the impression of an endless universe of content. But now the value of being a library show has gone way, way down.

OFFENBERG: And what the streaming services have found is that people don't watch those library shows very much. They sit there. They accrue residuals costs, and they're not actually getting watched.

FOUNTAIN: But just because many shows are bringing in fewer subscription dollars than they are costing these streaming companies, that does not mean that these shows are completely worthless. There are all sorts of new platforms and even old cable channels that would love to get their hands on some premium content that, up until now, has been locked away as part of this library hoarding model.

HOROWITZ-GHAZI: Which brings us to our final theory in the case of the disappearing shows - the yard sale theory.

OFFENBERG: So all these shows that HBO Max has taken down represent a library of assets that could be sold. So it's not just that they're taking them off the platform to cut residuals, but they could actually sell these assets to other providers.

FOUNTAIN: Yeah, in fact, some of the biggest titles to have been taken off HBO Max are already being licensed to other streamers. Shows like "Westworld," "Raised By Wolves" and, yes, "FBoy Island" are all being sold off to platforms like Tubi, where - get this - you'll be able to watch them for free, but you got to watch some ads. Or if you want to go even more retro, some you'll be able to watch on DVD.

HOROWITZ-GHAZI: It is kind of a new era, one that Warner Bros. Discovery president and CEO David Zaslav, who insists on calling subscribers subs, seemed to acknowledge in an earnings call last year.

(SOUNDBITE OF ARCHIVED RECORDING)

DAVID ZASLAV: I believe the grand experiment, chasing subs at any cost, is over. Let's face it - the strategy to spend money with abandon while making a fraction in return, all in the service of growing sub numbers, has ultimately proven to be deeply flawed.

HOROWITZ-GHAZI: In the big picture, finance professor David Offenberg says that what this all means for the rest of us is that this golden age where we've been served more Netflix than we could ever possibly chill to, that is coming to an end.

OFFENBERG: I think the peak of streaming was 2021, where we had a ton of streaming services with a ton of great shows at low subscription prices. And we are never going back to that. We are going to have fewer streaming services going forward as they consolidate. We are going to have higher prices as we've seen. And we're going to have fewer shows. We're going to have to watch whatever they serve us just like CBS, NBC and Fox and ABC in the old days.

FOUNTAIN: For now at least, shows like "Made For Love" remain stuck in limbo between the old way of doing things and the new one. Alissa Nutting, the show's creator, says she's had talks about how and where "Made For Love" might be able to stream again, but no deal has been made so far.

HOROWITZ-GHAZI: As for Emme Lund, the "Made For Love" superfan who recommended the show to all her friends before finding out it had been removed, she says this whole debacle has her reconsidering her relationship to all the streaming platforms, but really HBO Max in particular.

LUND: Like, as they pull things from their streaming service, I think about canceling my subscription just out of spite.

HOROWITZ-GHAZI: (Laughter).

She is still holding on to the world where we could depend on streaming platforms to keep their libraries up forever so that a show she loves today would still be there tomorrow.

LUND: And that if I go and recommend it to friends, if they wait three weeks to go watch it, it will still be up on the website.

HOROWITZ-GHAZI: (Laughter) That seems like a fair request, that your credibility isn't impugned by the disappearance of your recommendation within a week or two.

LUND: Right? I'm losing friends over this. It's terrible.

HOROWITZ-GHAZI: Though "Friends," the TV series, that you can still stream on HBO Max, at least for now.

(SOUNDBITE OF RAINMAN'S "THE SKY WAS ORANGE")

HOROWITZ-GHAZI: Today's episode was produced by Willa Rubin with help from Emma Peaslee. It was edited by Keith Romer, engineered by Josh Newell, and fact-checked by Sierra Juarez. Jess Jiang is our acting executive producer. Special thanks to Jamila White (ph), Jonathan Handel, Ilan Haimoff, Schuyler Moore, Theodore Garcia and Eric Deggans. I'm Alexi Horowitz-Ghazi.

FOUNTAIN: And I'm Nick Fountain. This is NPR. Thank you for listening.

(SOUNDBITE OF RAINMAN'S "THE SKY WAS ORANGE")