The new, post-strike Hollywood is going to be a tough one. This business has now gone through a pandemic, a dual strike and an economic downturn, and the companies have sobered up. Business is getting tougher – For the working-class writer, director, producer, we’re going to see a contraction.
Producers spoke up: “There needs to be more of a focus on quality,” says Avatar producer Jon Landau. “People are hungrier now,” says producer Todd Black best known for producing The Pursuit of Happiness (2006). “Writers are, producers are, and studio executives are. I think we’re going to see over the next couple of years, hopefully, more productivity and more selectivity, and in some ways, I think it’s a good thing.” However, the industry must still deal with five crises that the strikes may have overshadowed but certainly did not resolve:
1- Streaming is not a viable business model.
The streaming battles took very lucrative entertainment giants and made their rich profits vanish faster than CNN+. Today it’s a situation made worse by Wall Street no longer valuing streaming companies as tech giants and the WGA and SAG-AFTRA strikes, with the pipeline for TV shows and film halted. There’s a reason that Netflix and Disney+ adjusted their prices to make it more expensive to avoid ads, and there’s a reason Amazon is adding advertisements to Prime Video. They want consumers to pay a substantial sum for the opportunity to opt out. Turns out, streaming is hard, but advertising remains a good business to be in.
2- Peak TV and Peak Pay have come to an end
Buyers and sellers are discussing ongoing, "propulsive," and "populist" fare as writers and producers prepare their first wave of post-strike pitching, which can be more cost-effective and broadly appealing for some outlets while others desire action thrillers and dressed-up procedures.
According to one seller, a chorus of sources agrees that big deals will likely have more bonuses tied to productivity and success. In fact, the genre of wistful, quiet dramedies, or 'sad coms,' as one comedy executive has labeled them, is no longer appealing. Also, both period dramas and star-driven limited series that used to dominate the TV dial have fallen out of favor. Adding that Miniseries often don't make financial sense, and many executives have learned this the hard way, especially when the market is flooded with them.
3-The theatrical business is still facing an epic existential crisis
‘Some people are now sitting on the sidelines,” says David Herrin, founder of movie tracking firm The Quorum. “It could be that they have become used to watching films at home or that they are fearful of being in a closed, dark space. Whatever the reasons, they are real and meaningful. The challenge for the theatrical is how do studios make up for those losses?”
Particularly relevant this year is the Oppenheimer and Barbie phenomenon – Proving that consumers are still willing to attend an event offering, but there have been changes to the rules of what constitutes an event in the post-pandemic era.
Robert Mitchell is more optimistic than others about the possibility of global box office revenue surpassing $40 billion (about $120 per person in the US) in 2024 if the rate of growth remains constant. He acknowledges that 'if' is a significant question mark, given the possibility of significant changes to the release schedule next year due to strike-related production delays.
4- The AI battle lines are just in the process of being drawn
The use of generative AI has brought together creators across Hollywood and has been a major issue in negotiations between the WGA and studios. But there is no mention in the agreement about whether studios can use writers' material as training data, which is a hotly contested point in negotiations.
In fact, Writers are currently thinking about why studios are not aligning themselves with scribes and AI firms to oppose what could be considered the theft of their material in violation of intellectual property laws. “Studios should be protecting copyrights,” says one WGA member. This person notes this is in the studios’ interest, as they will “never be able to compete with Google or OpenAI or Meta.” Darren Trattner, an entertainment lawyer who advocates for actors, directors, and writers, states that the studios could align themselves with writers due to a shared interest.
In the not-too-distant future, AI companies might turn to competing with studios by deploying generative AI tools to write and polish scripts.
5- YouTube and TikTok are where the kids are now
The majority of TikTok users are under 30, in the United States users averaged more than 80 minutes a day scrolling through videos, according to a 2022 report from Sensor Tower. YouTube users also spend more than an hour a day on the platform, where the biggest channels have more than 100 million subscribers worldwide. Also, the biggest video game releases outsold blockbuster movies.
Hollywood's leading media companies built themselves on the belief that the audience has broken free and spread to numerous locations. The challenge that no single company appears to have solved seems to be able to get into enough of those corners to regain the audience.
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