The Problem in Hollywood Is Not Just the Strikes
The Problem in Hollywood Is Not Just the Strikes
Hand-wringing about existence is something that has long been ingrained in the Hollywood personality. However, the crisis that the entertainment capital is facing right now is not the same as previous ones.
The movie and television industry is currently being buffeted on a bewildering number of fronts, rather than having to deal with a single undesirable disruption, such as the spike in VCR sales that occurred in the 1980s, or even overlapping ones (streaming, the pandemic). And nobody seemed to have any answers or suggestions.
On Friday, about 160,000 unionised actors went on strike for the first time in 43 years.
They said they were fed up with the extravagant compensation for entertainment moguls and worried about not obtaining a fair share of the profits of a streaming-dominated future. This was the first time actors had gone on strike for this reason in the last 43 years. They joined 11,500 other striking screenwriters, who had already walked out in May over similar concerns, particularly the threat posed by artificial intelligence. Since 1960, there had not been a strike including both actors and authors at the same time.
Fran Drescher, a former sitcom actress who is also the president of the Actors’ Equity Association, made the announcement of the walkout by saying that “the industry that we once knew—when I did ‘The Nanny,’ everybody was part of the gravy train.” “At this point, it’s just a sealed-off void.”
Both Hollywood’s conventional industries,
the box office and the television channels, are in a state of disrepair at the same time.
This was intended to be the year when the moviegoing industry would finally recover from the epidemic, which forced many theatres to close for extended periods of time. At long last, movie theatres will retake their place as a cultural priority.
According to Comscore, which gathers box office data, ticket sales in the United States and Canada for the year to date (approximately $4.9 billion) are down 21 percent from the same period in 2019, as compared to the same period in 2019. Disappointing results for expensive films such as “Indiana Jones and the Dial of Destiny,” “Elemental,” “The Flash,” “Shazam! Fury of the Gods,” and, to a lesser extent, “The Little Mermaid” and “Fast X” have obliterated any glimmers of hope, including strong sales for “Spider-Man: Across the Spider-Verse.”
According to a recent research published by the accounting firm PwC,
the total number of movie tickets that would have been sold around the world in the year 2027 could reach 7.2 billion. In 2019, there were a total of 7.9 billion people who attended events.
It’s a business that’s going out of business, but at least it’s going out slowly rather than quickly. According to PwC’s estimates, there would be fewer than 50 million households paying for cable or satellite television in 2027, compared to 64 million households today and 100 million households seven years ago. An analyst at SVB MoffettNathanson named Michael Nathanson stated in a letter to clients on Thursday that in terms of traditional television, “the world has forever changed for the worse.”
The four major media conglomerates are Disney, NBCUniversal, Paramount Global, and WarnerBros. Television channels have been Discovery’s primary source of revenue expansion for some decades now. The conclusion of that era has brought to a slump in the price of stocks. Since reaching their all-time high in March 2021, Disney share prices have dropped by 55%. During the same time period, revenues at Paramount Global, which owns a number of television networks including MTV and CBS, fell by 83 percent.
The chief executive officer of Disney, Robert A. Iger, announced on Thursday that the firm is considering the possibility of selling its “noncore” channels, which include ABC and FX. He referred to the declining popularity of traditional television as “a reality we have to come to grips with.”
To put it another way, the game is over.
There is also the option of streaming. Wall Street was mesmerised for a period of time by the subscriber-siphoning potential of services such as Disney+, Max, Hulu, Paramount+, and Peacock. As a result, the major Hollywood studios invested significant amounts of money into the development of online viewing platforms. Netflix was well on its way to becoming global. Amazon had arrived in Hollywood with the intention of making headway, much as Apple with its extremely big pockets had done. There was only one path to take for the more established entertainment companies if they wanted to maintain their competitive edge, not to mention their relevance.
“You now have, really in control, tech companies who haven’t a care or clue, so to speak, about the entertainment business — it’s not a pejorative, it’s just the reality,” Barry Diller, the media veteran, said by phone this past week in reference to Amazon and Apple. Diller was referring to the entertainment industry.
“For each of these companies,”
he continued, “entertainment is not their primary line of business; rather, it is a secondary line of business.” And yet, because of their size and influence, the judgements that are made regarding the future are heavily influenced by their very unimportant interests.
Wall Street’s interest shifted when Netflix announced that it had lost subscribers for the first time in a decade, and this occurred a little more than a year ago. Put subscriptions out of your mind. At this point in time, we are concerned about profitability, at least insofar as the old-line firms are concerned, as the old-line companies’ traditional operations (box office and channels) are experiencing difficulties.
The parent firms of streaming services such as Disney+, Paramount+, and Max (previously HBO Max) have cut expenses by billions of dollars and eliminated more than 10,000 jobs in order to turn these services into profitable businesses. In addition, studio executives stopped placing orders for new television programmes in an effort to bring down costs over the past year.
WarnerBros. The streaming segment of Discovery’s business
which is led by Max, is expected to turn a profit in 2023, according to the company. According to Rich Greenfield, founder of the LightShed Partners research group, Disney has pledged that it would be profitable by September of 2024, while Paramount has not set a date and has just stated that this year will mark the height of the company’s losses.
The firms have no intention of giving in to the demands of the unions, as doing so would put an additional strain on the profitability of streaming services.
