THB #169: Deflated

It’s been quite the week.

From my seat, it has felt like loss after loss after loss.

New Academy CEO snuck in under the wire by the exiting Board of Governors, nice guy, smart guy, no change guy… no institutional history with anything but museums…

Peter Rice, a well-loved executive who has a long history playing to all fields… out, for no clear reason except the ire of the flailing new CEO at Disney…

Jurassic World Dominion… not very good… not what is being sold…

Emmy Season goes into full hysteria… with a clear reality that very few of the very many new shows have any chance to break through, when push comes to shove…

Lightyear good, but not great…

Still hungover from Heard, Depp, and Emmerich…

Media filled with a lot of guessing, guessing, guessing…

People want to explain the future of ZasLand… but we don’t even know what the company will look like in 6 months. Some of what they have is sure to remain, but we still don’t know what the fullest embrace of the many segments of this company will look like all together… or if Mr. Z will just sit on his cards for a while (probably not)…

All the major media player stocks are down, most significantly so…

Light will show up at the end of this tunnel. But right now, I’m not seeing it. And I get sick of being David Downer at times like this. I need hope.

Perhaps the theme of all of this is, “everything is fine… just keep rolling along.”

My fears for The Academy is not that the new CEO is bad… just that he shows no sign of being a visionary that will raise the organization out of the doldrums that it is in, no matter how much upbeat publicity they shove down the throats of the willing media.

My fear for Disney is not that losing Peter Rice will materially damage the company immediately, with a strong Dana Walden in place. Nor am I worried about Rice, who will come out of this on his feet with a wry smile. It is that Disney will continue down the misguided path it has been on lately.

Even Jurassic World Dominion and Lightyear will open, satisfy some audiences, and success… but not up to the levels of the opportunity both represent.

I spent much of the day yesterday arguing the chicken vs egg of streaming, data vs content, and one of the things I think dataheads who seem to think “legacy” media is a dinosaur, dying and worth mocking, even though “data-driven” streaming is now regressing to the advertising model that has rule television for 50 years.

What I think is one of the reasons that legacy is not respected is that new territory is always overvalued and the fundamental business models, that generate stable amounts of revenue, are undervalued.

The Academy is not going to fall into a hole in the ground next week. It has enormous built-in equity that won’t instantly evaporate. But my standard for The Academy is not that nothing horrible happens this week. The last 2 years of Oscar have been the lowest TV rated in history. The Academy screwed up the Will Smith meltdown in a dozen ways, but the only result was the suspension of an actor who had already resigned. The Academy Museum has been under fire from at least half the membership from before it opened with it’s outrageous half billion dollar price tag. The organization makes no real distinction between a theatrical movie and a TV movie. 2020 was a clear failure for U.S. based industry workers of color. And with the stock market where it is, it’s not clear whether the massive cash annuity that was built during the COVID years is still anywhere near the $900 million it once represented.

But nevermind… let’s just bring on a nice guy who will keep the fires burning… if we change, it will be towards everything that has marginalized the organization.

Disney?

Greatest family brand in the industry by some margin. Parks representing about 40% of revenues and unlikely to fall off again, unless there is another pandemic. The company’s legacy elements are still generating a lot of money, even if they are not the skyrocketing numbers of the past. And D+ has been a winner, albeit at a low ARPU.

But the vision that Bob Chapek offered up in November 2020 for the digital future of Disney does not appear to be where they are currently going. They originated the idea of a content guru, picking where content will premiere. It made sense. But the execution of this process has been dubious at best. Chapek’s desire to have more control over every segment of the organization has chafed talented executives and created deep animosity. And it doesn’t seem clear now if Chapek even knows where he really wants the company to go now that Wall St has shut down the Netflix Fantasy of an easy 800m+ worldwide non-china addressable households and the notion that spending $15b+ in original content to drive every streamer is a good idea.

Does battening down the hatches and firing people disagree with you show strength or weakness?

When Netflix hit the Wall St wall, too many people acted like this meant they were on the downslope with their 220 million worldwide subs somehow heading for the exits. Madness. The measure is not the moment of panic… there remains a stable business still sitting there in the rubble. Netflix is Legacy now. Not a tech company. Welcome back to Kansas, you Technicolor lunatics.

With all this meh, I am in desperate need of some company, some person, some piece of content making a great, big, daring, smart statement about the planet.

We are not in The Future of Entertainment yet. We’re on the road. We’ve already taken a few pee breaks. There is a long way to go. And this week feels like the worst kind of treading water.

I am a true believer. A romantic, really. But this week, I feel like one of the faithful in the Sinai, free of the Pharaoh after repeated miracles, watching all those idiots dancing around the golden calf, drinking and fornicating, knowing full well that we are a long way from Jerusalem, waiting for Moses to come down from the mountain with news.

There is no Show Biz Moses. If we get a commandment, there will be 1 or 1 1/2 rules, not all 10 at once. And I like drinking and fornicating too. Those heathen look so happy. But here I wait, beyond distraction, not even sure of my own clarity, but keeping the faith.

At least we still have Mel Brooks…

Until tomorrow…