A few months ago, I was helping a friend who was producing a pilot for a big streaming service.

When I arrived to hear the cast read the script on the first day of production, I was handed the production contact list, which is usually four stapled pages containing the phone and email contact information for everyone involved in the production.

This production was too swollen, apparently, to be contained on four pages. I was handed a thick saddle-bound booklet, with multiple entries for each of the key principal participants: two networks, two studios, the production company based at one of the studios, the female star’s production-company staff, her management company’s development-staff list, and the rest of the production personnel. It was the size and heft of the student directory at a medium-sized liberal arts college.

Later, back in the writer’s room, as we were about to begin the rewrite, there were two guys I didn’t know. This was also unusual. When you volunteer to help out on a friend’s pilot, you usually end up working with a lot of former colleagues.

“Hi, I’m Rob,” I said, extending my hand to the two strangers.

One of the guys looked mildly alarmed. “I’m Ted,” he said.

“I’m also Ted,” the other one said.

I made a mild joke about the coincidence of the Two Teds and we shook hands, but they never said what they were doing there.

I pulled my friend aside. “Hey, what’s with the Teds?”

He shrugged. “I don’t know,” he said.  “They work for the network?  Or maybe they’re producers?  Or with one of the companies?”

“Can I ask them?”

“No.” my friend said, “Don’t make waves. Leave the Teds alone.”

I never learned who the Teds were, or why they were there. They didn’t pitch any jokes or story fixes. They didn’t say anything at all that I can remember. It’s highly likely that they didn’t know why they were there either. I suppose I could have combed through the production contact book looking for Teds, but that seemed like a lot of work. I mean, it was a pretty big book.

I thought of my two mysterious Teds recently when Netflix, once the mighty and invincible giant of streaming television, announced that it had hit severe financial headwinds. This year has been a parade of bad news for Netflix: For the first time ever, its subscriber base has shrunk. It lost 200,000 subscribers in the first quarter of the year and expects to lose another 2 million by the third. Its stock has lost nearly 70 percent of its value, which has inspired a class-action lawsuit by shareholders. Coming attractions include mass layoffs, trimmed-back production slates, and a price war with its growing list of competitors.

They’re feeling jittery all over town. Just through the Cahuenga Pass, in Burbank, the newly installed management of the newly named Warner Bros. Discovery shuttered its news-streaming service, CNN+, barely four weeks (and $300 million) after its launch. Its ad-supported cable properties, TNT and TBS, have cut back on unscripted production orders and new development initiatives.

And it’s just the beginning.

Put it this way: If you’re an executive at a large media company, the day that Netflix announced it was shrinking—not slowing, not hitting a plateau, but shrinking—was like the day in February 2020 when someone on the television told you that 60 people had checked into the hospital with something called Covid-19. You knew something bad was on the way for everyone. The leadership teams at Comcast, Disney, Paramount, Sony, and everywhere else aren’t looking at Netflix and thinking, Hah! They’re thinking, Uh oh.

Netflix invented the streaming business. It developed the necessary technology to efficiently stream packets of video across the Internet. But more important, it developed the creative and economic models required to make content and charge for it. Netflix was ground zero for streaming services like the lab in Wuhan was ground zero for you-know-what. So it’s only logical that it will get hit first when the business model turns sour.

But for the past five years, the entire entertainment business has been on a spending jag—paying anything for talent, anything for showrunners, anything for content. Studios mapped out multiple streaming services and multiplexed offerings with tiered pricing. They built castles in the sky made up of wishful thinking about how much the consumer would pay for monthly entertainment, and how loyal that consumer would be to something they lazily slapped a “plus” on. Everyone came to the superspreader streaming event.

It was a race to see who could get the “first-mover advantage”—who could sign up the most subscribers—so it didn’t really matter, went the logic, how much the company spent now. They would earn it all back later. So, sure, hire Ted. Hell, hire two Teds!

What happens now?

According to Warner Bros. Discovery CFO Gunnar Wiedenfels, “2022 will undoubtedly be a messy year.”

Especially for most of the people listed in that triple-wide contact booklet, which now serves as an artifact of a bygone boom time, like a 1928 Duesenberg or a Lehman Brothers duffel bag. Cost-cutting, when it comes, comes for the easy stuff first, which is very bad news for the Two Teds—I’m sorry, fellas, if you’re reading this—and for vanity production companies for minor celebrities.

On the corporate side, the rest of 2022 will be messy, too. Netflix, after losing nearly 70 percent of its value, is suddenly a takeover target or a merger partner. It’s a free radical, floating around the entertainment-industry ecosystem. And that makes everyone in the executive suites nervous because mergers and buyouts mean that some people get rich, of course, but also that a lot of C-suite people lose their jobs. The contagion won’t stop at the Teds.

Some big deals are coming. Disney, for instance, is not shy about making large acquisitions. After all, it’s gobbled up Marvel and 20th Century Fox. Why not Netflix? Folding its existing streaming service, Hulu, into Netflix makes good cost-cutting sense. Comcast could do the same.

In both of these instances, the existing shareholders of the acquiring companies might not be concerned by the cost of the transaction because they’d also be acquiring two pretty talented executives—Reed Hastings and Ted Sarandos—at a time when the current management of Disney and Comcast seems a little flat-footed.

What about Paramount? In many ways, this would be a better outcome. A merged Netflix-Paramount would have it all: a movie studio, a robust streaming service (Paramount+ could easily be folded into the Netflix side), and, especially, a popular broadcast network in CBS that would allow the company to promote its content cheaply and widely across the network. There are persistent rumors that the company has plans to sell or spin off the CBS unit—this would be a mistake, in my opinion—but if so, it’s a perfect opportunity for some enterprising dealmaker to build the media company for the 21st century.

Netflix combined with a newly free CBS, which combined with smaller studio Lionsgate, would create the perfect balance of streamer, broadcaster, and producer.

There are lots of other possibilities, of course. Rupert Murdoch, for instance, may decide that at 91 years old he’s tired of owning a broadcast network and put Fox Broadcasting up for sale. Sony may revive efforts to combine with another company. Some of the newer media companies such as Snap and Roku may join the fray. But what will certainly happen now is Hollywood doing what it does best, which is to panic.

For the next year or so, the production contact list will return to four manageable pages and media executives will be distracted by dealmaking and corporate intrigue. It will be the perfect environment, in fact, to make some interesting television shows and slip them on the air when the people who usually try to stop that sort of thing—development executives, bureaucrats, Teds—are too busy worrying about the next big takeover. Sometimes, messy is good.

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