Entertainment

I’m not in that industry, but I am in tech, so this is mostly conjecture based on other, somewhat similar, experience.

My guess is it comes down to storage space, bandwidth costs, and licensing fees. Probably the latter more than anything.

When they own the IP, they probably don’t have much in licensing but there’s probably all sorts of agreements with other studios, royalties to consider, etc… not carrying these shows could free that up.

Bandwidth can be expensive. I’d imagine that Disney is hosting this on their own hardware to help mitigate costs, but having seen some AWS bills in the past for a moderately trafficked SaaS platform, it adds up. Extrapolate that to millions of users.

Storage, likewise, can also be expensive. Especially as the quality of these shows and movies increases. A 1 hour, 4k video can be multiple GB of storage so having whole seasons of shows can add up.

Then of course there’s the marketing side of this. I can imagine they have several, if not teams of several, data analysts who are able to pinpoint how much money a show/movie is bringing in. Then it’s purely a cost comparison. If it’s costing more than what they are bringing in, it’s a no brainer. If it’s similar or less, then there could be even further factors I’ve not considered.

Anyway, that’s my thoughts. It would be cool to know more from an industry perspective, but that’s an industry I likely won’t ever join.

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I am no expert, I only heard a podcast on the subject, but this is my understanding of it: People subscribe for new shows, and old shows are less profitable for the companies. Old shows require them to pay residual fees to the actors and creators involved, so a show that's been out for a while has a fixed cost associated with keeping it on the platform, but a vague, less easily measured 'profitability' based on how many subscribers stay on the platform because of it's large back library. So, by cutting a few of the shows that less people are viewing, they save the fixed costs, and only lose out on the handful of customers who might quit because of an old, beloved show. It's stupid, because it's short sighted. They get a small reduction in overhead costs at the expense of the overall value of the product, and they irritate their customer base.

I wish I remember which podcast it was, they explained it so much better. I think it was a Planet Money, maybe?

It's the same way there's new customer promos for cell phones and such. You're effectively punishing loyal customers, but you need to drive growth quarter over quarter. The money you save by screwing over existing customers can be spent on a flashy new show that might bring in new subscribers in the short term.