| January 25, 2021
The last time I wrote about the film and television industry, aside from Twitter, was three full weeks ago. Actions have taken place in the industry, but nothing foundational has really changed since then. That doesn’t mean that the losses haven’t hurt and the wins haven’t soothed all of us.
NATO still should get significant PPP support and the hope of vaccines makes Summer 2021 seem more than a mirage. How many theaters will survive? How many will use the situation, potentially including bankruptcies, to reposition their brick-and-mortar? What fights will be fought in the name of theatrical revenues, which far outstrip streaming revenues and will for years, and what concessions—not candy and popcorn—can be made by exhibitors?
Studios have had layoffs and sell-offs, some of which will flip in the coming months. Some of which will not. Everyone has time to strategize and consider what they want to do when things return to some form of normalcy. Companies that don’t strategize as well will suffer from their COVID epiphanies. Great strategists will get great returns on their patience in the coming year.
Streamers, new and old, have kept pace with internal expectations. Quibi died. It was dying before I stopped writing. Media is, as one expects, hysterical in covering every twitch along the way, overstating some comments, pretending others never happened. Disney+ is still Stage One, having not fully managed Hulu/Star (overseas) into the inevitable strategy that will allow them to have a two-tier product to work the same turf as Netflix worldwide. HBOMax has had a strong content effort, but a problematic effort to convert subscribers in bigger numbers, even after giving up on deference to DirecTV. Peacock hasn’t found its feet, but betting against Comcast and Universal and NBC figuring it out would be a stupid bet. Paramount and Sony can’t make up their minds about what they intend to be when they grow up, par for their courses. The longer they hedge and bounce between being content providers only and launching serious streaming presences (neither has a broadcast network), the more painful this will be.
Does anyone really know how AppleTV+ and Amazon Prime will evolve? I have guesses, but those are beyond irrelevant at the moment. Both will get to a tipping point. I doubt that both will be ongoing production and distribution engines in three years. But both companies are brilliant at pivoting to what is really needed by the public instead of stubbornly trying to make square pegs fit round holes.
Netflix is fine. And they are dealing with their own shit. The company is no longer the exciting new kid on the block. I say they are Sophomores. And there are growing pains and new challenges and a content strategy that is going to evolve as demands of profitability are taken more seriously by the stock market. No one is forcing this but gravity.
Disney has many balls in the air. Theatrical will return. Parks will return in earnest a few months later. But the balance between streaming and their broadcast and cable nets on cable and satellite remains a huge challenge of finesse, timing and luck.
The movement to make streaming a priority has been wildly misread by press and conmen. The studios spent five solid years treating streaming as a nice little revenue stream even as the numbers grew larger. In the last 18 months, there was the big step of getting in the game. Now that revenues from streaming are real, plans need to be longterm, and streaming must be, at every multiple-content-format-delivery company, every bit as big as DVD once was or theatrical or post-theatrical sales. But that is being mistaken for STREAMING IS EVERYTHING, which I understand, because media is a premature ejaculator, but is false.
For the first time, studios and other lesser content providers have allowed the opportunity of a wider array of choices. I am 100% good with that. It is needed. Do you launch High School Musical 5 on Disney+ or Disney Channel or do you see a surge of nostalgia that would make it viable as a theatrical or do you turn it into a limited series or a series or ship it to Asia for theatrical but launch it domestically on cable and on Star in Australia? Or take a series of choices that happened, as The Last Dance ran on ESPN, then ABC, and then Netflix. Each of those venues was a financial maximization decision. (A weird quirk is that media insists on killing the idea of studios when, even if you did kill distribution, those companies would remain the dominant content creators for every delivery system.)
THAT is the business change that we are walking into. A wider array of choices. It doesn’t shutter any option. Not any time in the next five years. Disney is not shifting the majority of its content spend to Disney+. They aren’t not spending on Marvel (which is heading into its own headwinds)o r Pixar or Star Wars. That would be idiotic. Disney made a decision that Soul would have more value to the company – which is sitting on a ton of high-budget/high-profile product – as a Disney+ giveaway in December. Not charging like Mulan. Not experimenting with a $10 add-on price. Not making other choices. This is smart. This is logical. And it doesn’t change the entire distribution thinking of the industry.
But this is how business works. I didn’t agree with everything Barry Diller said last week about the industry moving forward, but the thing he said and which has been affirmed by non-industry businesses forever… Business likes stability. The sums may be massive to regular humans. But if a business can see what is coming, good leadership can manage it, because it has a form… One can set targets.
With this election, there is, regardless of all the other politics, more stable ground from which to work. The announcement of the potentially effective Pfizer vaccine this morning is another pillar of stability, which we all hope will remai). Not knowing whether we all can start digging out in earnest, in five months, or in a year or longer is dangerous in comparison to where we were just a week ago.
Production has ramped up on television shows. The film production story is more a tale of the biggest and the smallest… but content is being produced. We have a massive backlog of theatrical movies waiting to roll out just as soon as the math makes sense. (I believe Christmas is pushing it… but March or April may start to look like a worldwide release can do 75% or more of its expected pre-virus business. and that is what the standard really is to give a green light to the industry. Also, if there are people who get the virus in a movie theater – which hasn’t happened, but surely will if weekly domestic box office gets back up over $40 million – it will not destroy the industry if a true opening-up feels months away.)
As a movie fan, I am conscious of the many powerful films about the period between the Allies seeming to have defeated Germany and the complete end of the Third Reich. I am reminded that D-Day was on July 6, 1944 and Anne Frank was taken into custody and shipped to Auschwitz on the last train that would go to the death camp in August-September 1944. She died of typhus four months later, weeks before the camp was liberated. We know “the troops” are coming, but the times are still dangerous.
But today is better than last week. The course to a future of “normalcy” and then growth is within reach. We will lose companies. We will lose friends. But we are, finally, able to see land through the periscope. We just have to get there.
| January 25, 2021
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David Lynch: “Yes, absolutely. I am searching for a good pair of pants. I never found a pair of pants that I just love. I like comfortable pants and clothes I can work in, that I feel comfortable in. I don't really like to get dressed up. I like to wear the same thing every day and feel comfortable. It's a fit, it's a certain kind of feeling, and if they're not right, which they never are, it's a sadness. You know, it interrupts the flow of happiness. I'm working on it, believe me.”
| January 25, 2021
Taboola To Go Public With $2.6 Billion Valuation: "Before Outbrain and Taboola paid sites to fill their recommendations with junk, about 15% of readers would click decent recommendations at the end of an article. Today, you're lucky to break 3 to 4% on internal recommendations. Chum boxes get less than .5%. Media sites trained their readers to leave."
| January 25, 2021
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