The party’s over: Why the Internet might mean lower salaries for TV stars

According to GigaOm, the return of Arrested Developmentcould change how television is made. The cult comedy, if you hadn’t heard, is being resurrected for a fourth season and will be shown exclusively on Netflix.

The subscription video streaming service, believing the revived show will serve as a major magnet for new subscribers, reportedly outbid a number of other big players for the rights to it, including pay TV provider Showtime. If the gamble pays off for Netflix, “it’ll legitimize a whole new distribution platform and business model,” according to GigaOm’s story.

A lot of people are hoping this does indeed happen. With cable prices climbing through the roof, consumers are dying for an alternative (and legal) way of getting access to their favourite shows. Pay-per-download services such as iTunes are great, but so far they’ve simply been a complement to the existing system. Netflix’s scheme is an effort to introduce entirely new production and distribution options for TV show creators, which could ultimately benefit viewers.

What struck me about the whole situation is just how expensive many TV shows are. While we don’t know how much Arrested Development will cost to make, we do know the budgets for shows such as Breaking Bad and Fringe are around $3 million to $4 million per episode. More elaborate series set in fantasy worlds, like Game of Thrones for example, cost upward of $6 million.

In the case of Game of Thrones, with big castle sets and the occasional epic CGI battle, the big budget is somewhat understandable. But how do shows with modest, real-world settings like Breaking Bad – one of the best shows on TV, by the way – rack up such huge expenses?

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If it’s not from their settings, it also can’t be from production equipment. Today’s HD cameras and editing equipment are much cheaper (and better) than they’ve ever been.

As anyone involved in media production will attest to, the number one expense is often people, which means one of two things – a show with a big budget that doesn’t involve massive special effects is either employing a lot of people, or some of those people are exceptionally expensive to employ.

With television shows, salaries come down to whether people are “above the line” or below it, which is code for whether their credit appears at the start of the show or at the end. Obviously, the people above the line – say, Breaking Bad star Bryan Cranston and creator Vince Gilligan – account for the vast majority of a show’s labour budget.

As some internet pioneers have shown, it doesn’t have to be this way. A few years ago, Hollywood’s current golden boy Joss Whedon made Dr. Horrible’s Sing-Along Blog on a budget that was in the “low six figures.” Whedon said he called in a lot of favours, but all told, the cost of the 42-minute project – which was distributed through the internet, starting with Hulu in the United States – was dramatically lower than most shows, despite being the same length. And if you’ve seen it, it’s clear no production short-cuts were taken.

The “calling in favours” part is important because it probably also applies in the case of Arrested Development. The show’s stars have talked fondly about it and creator Mitchell Hurwitz over the years since its demise, so it’s probably a fair bet that some of them are doing the revival for less money than they can normally command.

Will Netflix succeed in opening up a new frontier for television with Arrested Development? Maybe, but it won’t be easy unless creators are able to routinely convince the “above the line” labour to work for less than what they’re used to. If television is to adapt to the internet, creators may have to learn the same hard lesson that every other medium has had to face: they’re going to have to do more with less.