by Ben Fritz
In fact, for many people Sony Pictures is probably more closely associated with Zero Dark Thirty, which Megan Ellison’s Annapurna financed and the studio released for a fee in the tens of millions of dollars, than with Wheel of Fortune and Jeopardy!, which Sony actually owns. Those TV shows have made total profits of $2 billion and $1 billion, respectively, over their decades on the air. Even in Hollywood, most people would be surprised that by the mid-2010s, while film and TV revenues were roughly even at Sony, profits from the small-screen business were substantially higher.
But with the dawn of the golden age of television at the same time that movies devolved into franchises and then cinematic universes, TV’s status within Hollywood started to evolve. It was no longer the boring workhorse that could be easily dismissed. It became the “new black baby,” to borrow an unfortunate phrase from Amy Pascal. Mister Robot, Game of Thrones, Legion, Orange Is the New Black, and Transparent gave TV cultural prowess to match what it had long enjoyed financially.
These shows didn’t just arise because TV executives had an epiphany and decided that they should stop producing crap, however. It was, as Michael Lynton has astutely observed in interviews, a product of technological change. When a television show could be watched only on the night and at the time a network scheduled it, and only if there was nothing else on that you wanted to watch, it was all but impossible to produce complicated serialized stories. With the exception of soap operas, nearly all shows were made to be enjoyed as a single hour or half-hour, with no context that couldn’t be summarized briefly in a “previously on.” Procedural series like Law & Order and Murder, She Wrote, in which one crime was solved per episode, ruled in drama, while sitcoms like Home Improvement and Roseanne regularly topped the ratings.
This setup was necessary because it was unreasonable to expect most people to watch every episode every week and because shows made most of their money in syndication, the repeats that air at 6 or 11 p.m. on weekdays or during the day on weekends, when someone flipping the channels might catch a random episode.
Technology Leads to Great TV
That situation began to change with the advent of whole seasons of a show offered on DVD. Early binge viewers in the early 2000s would skip entire seasons of 24 or The Wire when they aired and then catch up later, sometimes in just a few days. DVD sales, a new and fast-growing source of revenue for studios that produced TV, started to give them a reason to make shows that were better enjoyed several episodes at a time. TV viewing changed even more dramatically with the debut of TiVo, followed by the generic DVR, which by the late 2000s made it impossible for most people to miss a show they wanted to watch, and ridiculously easy to watch multiple episodes in a row.
To make themselves valuable to viewers, and thus charge cable and satellite companies like Comcast or DirecTV as much money as possible to carry them, cable channels started running engaging, original, attention-grabbing shows that took advantage of DVR viewing. This was the era when the occasional great show like The Sopranos or Dexter on premium cable networks like HBO and Showtime blossomed into dozens of terrific serialized shows for adults on seemingly every cable network, from AMC’s Mad Men to FX’s The Americans to Syfy’s Battlestar Galactica.
Next came Netflix, which changed “binge watching” from an exercise in delayed gratitude, as you waited for the DVD or for episodes to pile up on a DVR, into the default mode for viewing. At first, subscribers binge-watched some of the hundreds of past seasons of network series for which Netflix had bought streaming rights. This altered the economics of serialized shows, which in the past had never made much money from repeats, because who wants to watch a random episode of Mad Men at 11 p.m.?
But on Netflix, where you can watch every episode in order and on demand, heavily serialized shows worked brilliantly. Netflix paid Lionsgate, the studio that produced Mad Men for AMC, $77 million, or $850,000 per episode. It wasn’t long until Netflix and its competitor Amazon started making original series, designed from the ground up to be binged. With the exception of sports programming, the age of television as appointment viewing was now dead.
These technological and financial changes revolutionized television, but they had a huge impact on the movies too. As we’ve seen, mid-budget dramas and star vehicles were already severely challenged at the box office because the rise of foreign markets and the decline of DVD sales made franchises a more popular and profitable option. But now films had to compete for attention more directly with TV. Watching The Wire used to be a difficult endeavor. You had to make sure you were in front of your TV every Sunday night at the appointed time, and if you missed a single episode, you were screwed, unable to follow the story line for the rest of the season. It was much easier to hop in the car and head to the multiplex. But by the 2010s, spending time and money at the multiplex to see a movie that might be good was more burdensome and risky for most average adults than staying at home to binge a TV show they already knew they loved.
Hollywood executives, affluent and educated cultural connoisseurs themselves, knew firsthand what the problem was because they gorged on the surfeit of TV shows aimed directly at people just like them. When even Amy Pascal put down her phone and stopped talking about movies every Sunday night to watch Homeland, what are the odds the average person was going to leave the living room to see a big-screen drama?
Studio chiefs started openly fretting that higher-quality television was keeping viewers out of theaters and damaging their business, as evidenced by a 7 percent drop in ticket sales between 2009 and 2015 despite a 4 percent increase in the U.S. population. “All of us are looking for ways to make sure this isn’t the time when theatrical moviegoing really does go away,” the head of Universal Pictures ominously warned in 2011. It wasn’t only their bottom line that was threatened. The better TV got, the harder it was for movie executives like Pascal to hold on to Hollywood’s best talent. Better TV attracted better actors, writers, and directors.
One major movie star after another, frustrated by how difficult it was to get a great original film produced and lured by the growing respect for television, made the once unthinkable decision to move to the small screen: Meryl Streep and Robert De Niro and Dwayne Johnson and Halle Berry and Jonah Hill and Matthew McConaughey and Emma Stone, to name just a few.
“I’m getting sick of everyone’s TV shows,” Pascal fumed after learning that Tom Hardy, the star of Dark Knight and Mad Max: Fury Road, might be unavailable for a Sony movie because he was busy with Taboo, his series for FX.
Life of a Salesman
Amy Pascal wasn’t used to losing talent, audiences, or an entire genre of programming to a guy like Steve Mosko. She and Michael Lynton differed in temperament and which side of the brain they used to make decisions, but they were both sophisticated members of the cultural elite who never questioned that their careers would be all about utilizing their impressive intelligence and taste.
Mosko, by contrast, was a hard-working, glad-handing salesman with working-class roots, whose unlikely rise to the top was the result of his drive to do whatever it took to win at whatever it was he was doing. With his beefy, intimidating physique, slicked-back hair, and faddish rope bracelets, Mosko was unmistakably different from the stylish Pascal and the rumpled but refined Lynton. If Pascal’s passion was making movies and Lynton’s was solving problems with his intellect, Mosko’s was to never stop making the next sale, rising to the next level, and grabbing another brass ring. He was Hollywood’s version of a super-successful Willy Loman, a man to whom attention must be paid. Which made sense, because television was for many decades Hollywood’s more proletarian business. Its successful executives were dealmakers, not tastemakers.
Steve Mosko started his career about as far from Hollywood as one can be while still technically working in the entertainment business. Born in 1956, he grew up in a Baltimore suburb as the third of seven children to a father who worked in construction and a homemaker mother. He earned money in high school as a janitor and tru
ck driver. After majoring in communications at the University of Delaware, Mosko decided to take a stab at the TV business, inspired by a high school visit to the set of the local teen game show, It’s Academic. But with no relevant skills, experience, or connections, he found it wasn’t an easy field to break into, especially from Baltimore. He ended up selling ads for the local AM radio station, WITH, which was, as he recalled, “so bad, the [general manager] said that if he turned his radio around and played it out his window so that people down on the street could hear it, our numbers would double.”
But Mosko, who loved to gab and could charm anyone around a conference table, over drinks, or on the golf course, was a gifted salesman. Soon he jumped to television, becoming general manager of stations in Baltimore and Philadelphia. And then in 1992 he moved to Los Angeles to become an executive at Columbia TriStar Television Distribution, which had only a few years earlier been acquired by Sony, along with Columbia Pictures. Mosko was in Hollywood now, at a major studio, but in the most decidedly unglamorous part of it. Not only was he not involved in movies—he didn’t even make TV. The closest he came to sexy was selling the cheesy syndicated series V.I.P., starring Pamela Anderson, along with repeats of Mad About You and Seinfeld.
The super-salesman rose through the ranks once again and by 2001 was president of the unit now called Sony Pictures Television. It was not an auspicious time to be promoted, though. He got the job at the same time that Sony decided to stop producing for broadcast networks like ABC and Fox, which at that time aired almost all of the original programming on TV. Because the broadcast networks were increasingly making their own shows and squeezing outside suppliers like Sony, and because the Japanese parent company had never bought or launched a real network of its own, its production business was floundering. So Sony’s U.S.A. chief, Howard Stringer, decided to shut it down, laying off more than fifty people. It seemed that Mosko’s job would still be primarily made up of selling network repeats, game shows, and soap operas to independent stations like the ones he used to work at. He had risen to the top just as the coolest part of the job was taken away.
But the coolness would soon return, thanks to cable. As channels that had never aired original series before started looking for distinctive programming that would make them “must-watch” in the age of DVRs, Mosko discovered a new class of networks he could sell shows to. And because cable channels were still largely viewed as “beneath” the more established television studios like Warner Bros., Sony could afford to compete for their business on its smaller budget and with its lower stature. So Mosko, cautiously at first, returned his studio to the production game.
Sony made a groundbreaking police drama, The Shield, and the Glenn Close legal drama Damages for FX; it made Huff, about a psychiatrist with issues of his own, played by Hank Azaria, for Showtime. Then came the series that would change Mosko’s career, Sony’s fortunes, and the way audiences around the world viewed television: Breaking Bad.
The $400 Million TV Show
When Sony’s television executives first told Michael Lynton about their plans for Breaking Bad, there was a pause, like a record scratch in a movie, as the studio chairman looked up from his desk with a mystified look on his face. “That is the craziest and worst idea for a television show I have ever heard,” he told Mosko’s TV production chiefs Jamie Erlicht and Zack Van Amburg.
Without the benefit of hindsight, you certainly can’t blame him. Who, anyone in their right mind would probably ask, would want to watch a show about a depressed, middle-aged chemistry teacher who decides to make money for his family before his imminent death from cancer by cooking crystal meth?
This was 2006, many years before True Detective and Stranger Things. Sony was just inching its way back into series production. Television was still primarily a broadcast network game, and offbeat, daring programs were virtually nonexistent. In a year when 24 won the Emmy for best drama series, it was pretty difficult to imagine that a show like Breaking Bad could draw an audience.
But AMC, a network formerly called American Movie Classics, which in the mid-2000s was known primarily for endless repeats of not-so-classic films like Speed and Predator, decided it needed to take some risks to remain relevant. So it rolled the dice with Mad Men, a cerebral show about advertising set in the 1960s, and on Breaking Bad.
Lynton rarely expressed any passion for individual movies or TV shows, but he also rarely stood in the way when his creative executives felt it. “Hey, guys, it’s your career,” he told Erlicht and Van Amburg. “If you really think this is that great, you should go ahead with it.”
In reality, it wasn’t a show Lynton had reason to give much thought to. Shot in New Mexico to take advantage of that state’s generous production tax credit and made without visual effects or major stars, it wasn’t particularly expensive to produce. And even if the Sony Pictures CEO’s prediction was wrong and Breaking Bad was a success, it didn’t seem there was a meaningful amount of money to be made. Sony executives initially projected it would earn a profit of $19 million over four seasons. Which was fine, because that was the cable television business in the mid-2000s. But it was insignificant compared to the profits from, say, a Spider-Man movie. Or so everyone assumed.
Breaking Bad wasn’t initially a hit in the ratings, averaging fewer than two million viewers for each of its first four seasons, which aired between 2008 and 2012. But it was a critical favorite and beloved by the viewers who watched Bryan Cranston’s slow transformation from Mr. Chips to Scarface. It was buzzy, beloved programming, which was exactly what AMC wanted, as it kept paying Sony for more episodes.
It was also exactly what Netflix wanted: a binge-worthy show that lots of people had initially missed on television and wanted to catch up on, to see what the big deal was. The streaming service paid around $800,000 per episode for the repeat rights to Breaking Bad. That was not only a financial boon to Sony; it also improved the ratings, as more people caught up and wanted to see the rest of the story of its main character, Walter White. The fifth and final season of Breaking Bad averaged 4.3 million viewers and the finale, in September 2013, drew an audience of more than ten million people. It beat all of the scripted shows on broadcast networks that night.
The buzz was now deafening, and Breaking Bad, widely hailed as one of the best television series ever, became a must-own, even in the age of waning DVD sales. It was a huge hit in home entertainment, both in the United States and around the world, where Netflix streaming and a Spanish-language remake had earned it a following.
In late 2013, when Sony launched the final season of Breaking Bad along with the complete series on DVD and Blu-ray, they sold 100,000 copies and 27,000 copies, respectively, in the first week alone—a big number that made it the only television series among the ten top-selling video discs in the United States. By 2014, Breaking Bad‘s profit from DVD and Blu-ray sales alone had reached $215 million, a number that dwarfed all of Sony’s other shows except the nine-season mega-hit Seinfeld.
Home entertainment was the biggest but not the only source of money that poured into Sony’s coffers from Breaking Bad. Thanks to Netflix, AMC, and a consumer products business that brought in millions (Walter White–inspired cooking apron, anyone?), the total profits grew much bigger.
Even Amy Pascal was amazed.
“ML told me tonight thAt breaking bad is gonna make 300,” she wrote to the chief financial officer of her motion picture group. “Jesus is that true[?]”
In fact it was low. By 2016, the ultimate profit from Breaking Bad was estimated at more than $400 million. That made it the second-most-profitable piece of entertainment content Sony had made in the twenty-first century, behind only the original Spider-Man.
Culture War
By the end of its run, Breaking Bad had become not just one of Sony’s most profitable projects ever, but also one of its most prestigious. It won the Emmy Awards for best drama in 2013 and 2014, the same years Sony narrowly lost the best picture Oscars for Zero Dark
Thirty and American Hustle, continuing a winless streak that dates back to 1987’s The Last Emperor.
Television was now Sony’s most important business culturally as well as financially, which made it even more awkward that the leaders of the studio had so little involvement in it. But as TV became so prestigious that the people Amy Pascal was close to in the film business started working in it, she began to dip her toes into the waters too. Rather than bring her closer to Mosko, though, it made things worse between them.
In 2013, Sony produced a pilot based on an idea of Pascal’s. The Vatican, about power politics inside the Catholic Church, was going to air on the premium cable network Showtime. Pascal enlisted one of the biggest movie directors in Hollywood, Ridley Scott, to helm the pilot for less than his normal fee, and she went to Europe to visit the set, something Mosko himself rarely did.
The Sony TV chief scoffed, to anyone who would listen, at Pascal’s efforts to get involved in television, predicting her lack of experience and lax approach to costs would fail her. And indeed, despite the involvement of Scott and the star Kyle Chandler, who was in high demand after Friday Night Lights, Showtime didn’t pick up the pilot to the series—due largely to conflicts between the network and the A-list movie screenwriter Pascal had enlisted to script it, Paul Attanasio. For Pascal the experience was a “disappointment,” the kind of thing she was used to in the unpredictable movie business. But TV executives were not so willing to brush aside the unsuccessful first effort of a woman they viewed as an arrogant interloper.