(Welcome to the Entertainment Strategy Guy, a newsletter on the entertainment industry and business strategy. I write a weekly Streaming Ratings Report and a bi-weekly strategy column, along with occasional deep dives into other topics, like today’s article. Please subscribe.)
Are we still in a streaming bubble? Or are we watching the last over-budgeted TV shows finally pop?
I ask because Variety’s Andrew Wallenstein reported that Riot’s animated TV show, Arcane, cost $250 million to make and market, and I immediately wanted to say, “Yup, we’re still in a streaming bubble.”
In this case, though, I’d argue that Arcane is a relic of the now-dying era of loose cash and Wall-Street-loves-streaming-plus-zero-interest-rate fueled gigantic production budgets. This is a show that was greenlit in the heady days of 2019, had its first season come out in the streaming boom times of 2021, but then its second season came out three years later—on 10-Nov, split into three, two episode batches—post-streaming bubble bursting.
(By the way, Andrew Wallenstein did some excellent reporting here. I’m often very critical of the entertainment press, especially when they shy away from reporting on mega-flops or franchises with very vocal fan bases, but Wallenstein didn’t. Hollywood needs more reporting like this. Excellent work.)
Really, though, I think that this is a streaming-era retelling of a classic Hollywood story: in gamer terms, it’s the classic “A rich noob comes to Hollywood and is taken for all he’s worth” tale. In this case, Riot tried to become “the entertainment company of the 21st century” and instead they were taken for a ride. At $190 million for 18 episodes—meaning $10 million per episode—your show has to be one of the most popular shows of the year, as I just wrote about The Rings of Power.
And Arcane isn’t close.
Arcane never made the Luminate charts. It didn’t make the Nielsen Top Ten charts this week (though it only had two episodes come out on a Saturday, so that was a tall order anyway). Looking at Netflix’s global charts, Arcane spent a few weeks in the number two spot, averaging around 7 to 8 million views each week. Riot spent $60 million on promotion—not to mention dozens and dozens of pop culture websites and social media posts driving non-fans to the show—but this show underperformed on the audience interest charts. Arcane missed the JustWatch interest charts, only made Reelgood for a week, and made TV Time for three weeks.
Riot claims that League of Legends has 120 to 130 million monthly active users, but that user base (assuming these stats are not inflated) didn’t turn out for this show. Even assuming that possibly 70 million of those players are in China, where is everyone else?
There’s a huge disconnect between…
- This massive fanbase.
- This show, which received, allegedly, “universal acclaim” as one of the best-made, highest quality animated shows of all time. (Seriously, I could pull dozens of reviews saying this; go to its Wiki page to find them.)
- And the low viewership.
One (or more) of those things is overstated, and between half-a-dozen ratings sources and Riot cancelling the show, I don’t think it’s the low viewership.
The Problem With Merchandizing
The rest is for paid subscribers of the Entertainment Strategy Guy, so if you’d like to read about the non-hyperbolic reality of merchandising, along with some thoughts on poaching executives from rival companies that aren’t profitable, the media calling shows a hit when they’re not, piracy, and more, please subscribe! We can only keep doing this great work with your support.
