What happens if they don't? Is it similar to the Fantastic Four scenario you described, meaning that if they produce the requisite 3-5 seasons, they retain rights to the (subsection of the) IP? And if they don't, then they lose the rights?
In this case, Amazon loses a lot more. If they
don't make the requisite number of seasons (I don't know if it's three or five), it's not that they simply lose the rights to the IP, but they owe the Tolkien estate
more money.
So stuck between Charybdis and Scylla, Amazon either loses money spending money on a failing show or they have to just write Simon Tolkien a check.
I am not Jeff Bezos. I do not know what is going through his head. Bezos, for all his faults, is in the top 1% of men in terms of raw ambition. I, Scalenex, do not have anything close to this ambition. I cannot put myself in his head. But let's pretend he called me.
"Hey Scalenex, what should I do about the Rings of Power? I know you are an old school Tolkien fan, but I personally don't care about his legacy, I am just concerned with mine."
"Okay Mr. Bezos, yes I would prefer derivatives of Tolkien work stick close to the source material and the spirit of JRR Tolkien the GOAT of fantasy authors. I think doing so will actually make more money than the source material will do 'reimagined for modern audiences'....normally. But not for you. At this point, the Rings of Power lots so much credibility for Amazon Prime that even if you made a
perfect Tolkien derivative show, the hardcore and casual fans would not give your a fair shake."
"So, Scalenex, you are saying I cannot turn this ship around to success?"
"Yep, Mr. Bezos, the best you can do is to turn this from a large failure into a small failure but the odds of even that are low.
My thoughts are that season 1 of Rings of Power was a sunk cost. If you throw good money after bad, Season 2 and 3 of Rings of Power will be bigger financial disasters. If you get to season 4 and 5, these seasons won't be derided by fans, they will just be ignored entirely, and that's even worse. You won't even get hate watchers for it.
You can lose money by making more seasons or you can lose money by writing the Tolkien estate a check. I say you should write the Tolkien estate a check. If you throw money away on some failed seasons, you will lose more than money, you will lose prestige. With all due respect sir, I know you value prestige more than money. You can get money back from your core business easily enough.
Let's say you cancel the series and write the Tolkien's ungrateful grandchildren a big check. You can then issue a sort of carefully worded statement that you regret some of the radical changes to the source material and make a non-binding promise to be better in the future. This will give Amazon Studios more credibility and good will for future projects.
The Boys had better viewership than Rings of Power and a much smaller budget. Jack Reacher too. Well written stuff like this is where Amazon Prime can truly compete against Disney, Warner, and the others. For the budget of Rings of Power, you can make several mid budget shows like The Boys. If some of these projects don't land, you aren't really out much, you only really need one in four shows like this to become fan favorites to come out ahead.
Also, distance yourself from Chinese suppliers, slowly. Not because of moral reasons, those things of course don't matter at Amazon. But the CCP will stab you in the back, it's only a matter of time. All you can do is make sure you are expose as little back to them as possible."