Bloom_Oct_08

THE BOTTOM LINE To keep talent from defecting to fast-growing

streaming services, studios such as Sony, Warner Bros., and Lions

Gate are making lucrative competing ofers.

The deal upended the economics of the indus-

try. Producers used to own a piece of their shows

outright, potentially reaping hundreds of mil-

lions of dollars by selling the rights to reruns. Tom

Werner, for instance, made enough money from

The Cosby Show

and

Roseanne

to buy the Boston

Red Sox and Liverpool Football Club. There’s no

back end on Netlix, which releases shows all over

the world at the same time, and runs the programs

indeinitely. “You get more up front with less risk,

but potentially less upside in success,” says Chris

Silbermann, Rhimes’s agent at ICM Partners.

Still, deals such as Murphy’s and Rhimes’s are

outliers, says Silbermann. There are only a hand-

ful of producers who can—or even want to—produce

multiple shows at the same time. Rhimes has already

announced eight diferent projects she’s undertak-

ing for Netlix, while Murphy has a half dozen shows

in production. For creators who just want to do one

at a time, Netlix may not be the best home, since

it doesn’t provide as much hand-holding for indi-

vidual projects. While Netlix provides money and

artistic freedom, networks such as Home Box Oice

Inc. claim to provide more support every step of the

way—from notes on early scripts to ine-tuning for a

pilot episode. That’s a big reason why

Breaking Bad

creator Vince Gilligan stuck with Sony Pictures when

his contract came up for renegotiation earlier this

year, according to people familiar with his decision.

Rogen and Goldberg, producers of the movies

Neighbors

and

Sausage Party

, were wooed by

Amazon and Netlix but wanted a studio that would

give their movies a big push in theaters. Previously

with Sony, they’re now talking to Lions Gate and

executives there who initially helped them get their

business of the ground.

Many producers fear their programs can get lost

amid all the clutter on Netlix and wonder if their

shows might get a bigger boost from the weekly

rollout of traditional TV. Actor and writer Jason

Segel, who starred for nine seasons in the CBS hit

comedy

How I Met Your Mother

, speciically wanted

his new show,

Dispatches from Elsewhere

, to air on

conventional TV so it could beneit from the added

attention paid to new episodes each week.

Some producers see HBO as the epitome of qual-

ity, where programs are treated more as art than

commerce.

Bufy the Vampire Slayer

creator Joss

Whedon recently signed with HBO over Netlix for

his new TV series. “The increased volume at other

places has worked in our favor,” says Casey Bloys,

the head of programming at HBO.

—Lucas Shaw

Amid the carnage, GE is ditching some of its

oldest units, including Thomas Edison’s light-

bulb operations. Flannery cut the dividend, a

step Culp may have to consider, too. One thing

seems certain: He’ll keep pruning—but faster

than Flannery did.

—Richard Clough

General Electric Co. was once among America’s most-respected

corporations. Now it’s earning a far diferent reputation. The

ailing company, which on Oct. 1 dumped Chief Executive Oicer

John Flannery after only a year on the job, has lost about half a

trillion dollars in market value since its 2000 peak.

MonsterMath

The New Guy

TheFallen

Next

Steps

Power equipment, such as turbines for

utility plants, was one of three industries

(along with aviation and renewable

energy) managers had targeted to

revive GE. Former Chairman Jef Immelt

paid $10 billion for more power assets in

2015. But the business has been falling

fast, and GE now says it will write down

the value of its power assets by

$23b

Larry Culp, who won Wall Street’s praise

for transforming manufacturer Danaher

Corp., takes over immediately. “He’s an

outsider, and maybe it’s going

to take an outsider to come

in and fix this thing,” Scott

Davis, an analyst with Melius

Research, said of Culp, who

joined GE’s board in April.

Just how big is $500 billion?

○ A top-of-the-line iPhone X

for every person in the U.S.

○ The GDP of Belgium

○ A Tesla Model 3—and three

years of garage parking—for

every person in New York City

○ Facebook’s recent market

capitalization

○ A Starbucks cafe latte

ever

John Flannery

takes over as

CEO

Jef Immelt

takes over as

CEO

GE’s market capitalization, monthly

9/1998

9/2018

$600b

300

464 million years

BUSINESS