Thats how it used to work in the movie theater/cable days. Then Netflix said "I will pay you a ton of money up front to own everything" Creatives said amazing! Then the "war" for creative talent started because of the fragmentation of services, so you got people saying I will pay you X + a royalty regardless because you are so sought after, which eventually, as you see here, priced them out of their own content.

I think that a show like Westworld is a great example of the realities of the streaming era. If HBO kept streaming it on HBO Max it probably costs them $2-4 million in residual liabilities. HBO removed dozens of scripted shows during that phase, and had a mandate to cut around $3B in post merger costs.

After Year 1, WGA/SAG residual formulas decrease: Year 2: ~80% of Year 1 Year 3: ~55% Year 4+: sometimes stabilize at a “floor” rate

So what did they do? They ran it for a few years, ran the numbers, realized that Westworld was no longer profitable on the platform. (Profitable would have to mean draws enough new subscribers to the platform). AND THEN - Warner Bros. Discovery made new deals with other platforms with ads. I think you can still find Westworld on Tubi and other ad-supported platforms that actually pay Warner licensing fees.