THB #604: Showbiz News Desert
It struck me as I was driving home from one of so many screenings this last few weeks that it feels like forever since I wrote an in-depth number-crunching piece. That’s so unlike me.
The thing is, math feels irrelevant right now.
Math is not as exciting as a strike or a medical plague.
Math demands that people be serious and make an uncomfortable level of effort to fully understand the text and the subtext.
We are at a moment when the travails of Paramount… the questions about Warner Bros Discovery… the eventual replacement for Bob Iger at Disney… the disposition of Hulu… the endless & hysterical assumptions that Comcast will expand by acquisition… all pretty well played out and at this point, really boring.
The well for gossip is kinda empty.
Yeah, Belloni can always dial up some “really important” battle within the agency world. Agents and execs are still whispering in his ear, expecting him to get the names spelled right while understanding almost nothing more than an inch deep.
Everything is on fire… but except for a bunch of “woe is we” pieces - and I have a great deal of sympathy for people who are newly out of work and have few alternatives - we have gotten used to living with the smoke, like people adjust to the humidity in Miami.
But the other thing… not everything is actually on fire. The broadcast networks are still broadcasting. The major streamers are all still streaming. Theatrical box office still has massive and moderate hits, only in need of more mid-sized movies to bring up back to “the good ol’ days” and then, beyond.
There is still a wide array of junk being made. Less in Los Angeles than before… but still, lots of it in Los Angeles. And there is still a deep bench of ‘movies they don’t make anymore” getting made… some of them even in movie theaters.
If you were reading this newsletter over the last 3 years, you know that I have been writing about the inevitable deflation of the entertainment content bubble the entire time. 30% was my much-repeated figure. And that is probably about what it will pencil out to be when all this comes to an end. Thing is, while Netflix has been pretty much in the same spending range in the last 6 years, everyone else more than doubled what they were spending on content. So a 30% reduction still leaves a bigger amount of content than was being produced before all the bad ideas about how to manage the first stage of the transition into streaming (a delivery system that was unavoidable).
This doesn’t mean “everything is okay.” I’m not an ostrich.
But what it means at this moment is that the machinery is grinding along in the only way that it can… slowly and constantly. Paramount is in relative stasis as it is in the process of being acquired in the next 6 months. But they are still releasing CBS shows and Streaming shows and Theatrical movies and greenlighting more. WBD has highs and lows, but they are pretty much on the schedule they set out for their bottom line when they launched a few years ago. Disney is investing even as they cut jobs and unique production teams, trying to figure out all things at once. (2 of their biggest movies of the year likely to be films that were originally meant for Streaming, Inside Out 2 and Moana 2). And Comcast has pretty much continued playing the same hand it has in recent years, trimming here and there, pushing the edges on the NBC side, cutting some cable nets… but not seeming anxious to expand with a $10 billion+ spend to acquire another studio.
Belloni, sloppy jester to the industry powers of the moment, has done 10 full-sized stories in the last 3 months. Here is the list:
Joker 2, CAA, the Colin Kaepernick doc, Netflix changing its dealmaking, Netflix’s Sarandos talking too much, CAA, a truly inane and self-serving for the source death-of-development story, “Zaz” firesale that isn’t happening, Paramount’s Go-Shop period, and CAA vs WME.
The only one that is still remotely relevant (or interesting) is Netflix working towards changing how it spends money… slowly creating it own idea of back end so they can spend less on the front end.
But it’s not really his fault… because the standards have played out. He managed to get in a Paramount piece and a Zaslav piece… 2 Netflix pieces… and 3 CAA pieces. But it’s filler all the way. No meat... or nothing more tasty than Spam. Because a town that is not exactly thick with real news on a daily basis - thank GOD we have 4 trades owned by one greedy billionaire - is currently a news desert.
And really, this is a good thing.
The people who are working don’t want to rub it in the face of the people who are not. The real estate moguls who were leaping towards millions of feet more in sound stage space all over Los Angeles and reconfiguring their plans… more retail or apartments are coming. People who squeeze others for revenue are finding new angles.
I can tell you that for this newsletter, the paid annual subscribers that I have lost in the last few months… all but one of them has been from the credit card bouncing… which means, to me, that they have likely lost or changed jobs. (I am not doing deep dives into subscriber histories… but losing annual subscribers has been pretty rare since I started. So I have been curious. Feel free to come back!!!)
When I write long math-y pieces about the industry, it is usually because I am testing some hypothesis I have come up with.
But in the last period, things have been pretty flat. What hypotheses are there to prove or disprove?
I still look at the box office and offer some serious perspective on what the numbers mean, how they actually compare, and what is coming. But how many times can I explain the same things? The marketing cycle for the late November movies is already in 33% swing.
As for the many writers who now make a living on Streaming ratings… well… not my thing. It was once my thing. I cared a lot. But much of this stuff is a little delusional. The field is so varied and unsettled that there are few stats that really, really matter. Success is better than failure. Yes!!!
But I am a perspective guy… and how does one really value Abbott Elementary or Matlock vs Netflix’s Menendez series or the new Ali Wong comedy concert (which is quite good, even if her show vagina is on the edge of becoming the overshared equivalent of Louis CK’s penis.)?
They are not the same. Netflix has a lot of ad watchers… but not all. ABC is all ad-based, at least until it hits Hulu, where some have ads and some don’t.
Again, I don’t blame the analysts. The situation doesn’t allow for anything more serious. But at the same time, when one of the public writers about it is some dude who is afraid to let anyone know who he really is and why anyone should take him seriously (and even if he is really a guy) for years now is a sign of how pathetic things can be. Smart guys, like Joe Adalian, keep trying to rein in the numbers…but I have mostly given up.
And even the theatrical box office… analysts are SO flying blind. It used to be pretty clear what the cost of a movie might be - this thing where there is an official number is a load of excrement - but more significantly, the cost of marketing and the value of “ancillary” markets. Media was always crap about figuring out profitability, over-simplifying almost always. But there were some broad outlines that held up fairly well. Someone want to tell me what the PVOD on Dune II or Despicable Me 4 or IF was? Or the VOD? Or the cost to MAX or Peacock or Paramount+ to stream the movie in Pay One? Or physical media? Etc, etc, etc. Can anyone track the international market for theatrical movies which can be as muscular as it was pre-COVID or virtually disappear, including but not limited to China? If they can, they aren’t doing it publicly.
Will Universal lose money on The Fall Guy? Probably not. But it’s close and none of us out here really know. Alien Romulus will be profitable, for sure… maybe in theatrical alone before any other revenue streams. How is a movie like The Beekeeper, which overperformed expectations, but allegedly cost $40 million, a marginal call on profitability? (And why, dare I ask, does MGM+ exist?)
And aside from the predetermined formulas for Pay One and often Pay Two and beyond (numbers to which we in the media have no access) what does a successful theatrical tun mean to the Streaming run? We kinda know. Theatrical movies seem a step more valuable. But how do you put that on a list of cash income?
I am loathe to excuse a soft media covering the industry by forgiving it for obsessing on wins and losses these days… but maybe this is part of the reason. If there is nothing real to write about or analyze, all you have are the home runs or strike outs in front of you.
Do we need 327 Joker 2 stories? Or 111 Megalopolis stories?
Next week, Netflix kicks off the quarterlies that are interesting… and we’ll see how interesting they are. They haven’t been a real surprise for a while. And I suspect they will not be again. The company is at a truly insane $730 a share today… $312 billion market cap. It hasn’t been under $550 a share since before February. So there will be some movement inside that range… and who knows… maybe $750 will be hit.
I can’t rationalize this. I also can’t deny it. It’s worth 46% more than the whole of Disney. So you would need 1.5 Disney’s in-whole to value the company as highly as Netflix, though Disney has almost 3x the total revenues. Yeah. Okay.
May we live in interesting times.
May they be interesting enough to inspire some deep dives again soon.
Until tomorrow…