Right now Hollywood is taking it on the chin, the gut, the head, and just about every other metaphorical body part that can be punched.
Thanks to the Biden Recession and its resultant inflation, people are cutting back severely on their entertainment budgets to concentrate on such luxuries as “food” and “rent.” At the same time that started to kick in, Hollywood fully embraced wokeness, resulting in movies and TV shows that alienated large segments of their existing customer base. From 2015 to 2019, Hollywood brought in more than $11 billion in domestic box office, thanks largely to once-juggernaut franchises like Marvel, Star Wars, Pixar (a studio that used to function like a franchise) and Jurassic Park, and even throwing out Flu Manchu-wrecked 2020, they have yet to return to that level of ticket income. Note that the first three of those franchises all belonged to Disney, which came down with one of the worst cases of Social Justice, from which hasn’t entirely recovered, and Disney stock has been on a mostly steadily downward trend since 2021.
On top of that, the last five years saw most major studios jump headlong into the streaming wars. The result? Everyone lost except Netflix. Everyone lost money launching their streaming services, and the huge need for new content, plus the mind virus of wokeism, meant garbage like Rings of Power, Velma and She-Hulk got green-lit. For Disney, the need for content not only radically increased costs, but also helped cheapen the previous powerhouse brands of Marvel and Star Wars with too much mediocre-to-bad content.
But the jump into streaming didn’t just increase costs, it decreased the income from existing revenue streams like broadcast and cable TV (now referred to as “linear” TV). With so much premium content moving to Internet-based services, a whole lot more people cut the cord for cable TV.
While all this was happening, Hollywood’s actors and writers unions looked at the money being shoveled into streaming and went “Hey, we want a bigger cut of that,” and went on strike, some even losing their houses (which honestly for a four month strike, seems like really poor financial planning) in the process. As a result, they won pay increases and additional “seats” in writer’s rooms right before everything started to collapse.
The results? Layoffs. “During the 2023 Hollywood strikes, the Los Angeles region’s share of national Film and TV employment fell to 27%, compared to 35% just the year before.” More: “Employment is down 9.1% (12,900 jobs) from 2013 to 2024 for the traditional entertainment industries of Film and TV, Sound, Print Media and Broadcasting.” I don’t think anyone thinks of 2013 as any kind of “golden age.” (Well, except maybe for the finale of Breaking Bad.) More: “Employment in ‘motion picture and sound recording’ has grown nationwide, but the share of workers in LA or New York went from just under half at the beginning of 2023 to just one-third earlier this year.”
This is why Deadline has a regular Hollywood Contraction section. Things are so bad that they’re even laying off executives (I know, world’s smallest violin), and many don’t expect to ever be employed in the industry again. “If you’re a middle-age white man, you’re feeling really struggling to see if you’re going to be hired again.”
Let’s list a few of Hollywood’s litany of woes, some of which we’ve covered here before.
And then, as this contraction runs its course, all of Hollywood has to worry about the looming threat of AI. AI is not good enough for Joe Schmo to make movies that rival Hollywood from his PC, but given enough computing power, we may live to see it. But in the meantime, a whole lot of technical jobs are probably going to disappear into AI expert systems. Instead of five lighting techs, there will be one lighting tech overseeing the AI automatically adjusting the networked smart lights.
It’s possible that 2019, the year when Avengers: Endgame was setting box office records, may be looked back on as the pinnacle of Hollywood’s 21st Century Golden Age…
Tags: Apple, Biden Recession, California, Disney, Hollywood, layoffs, Los Angeles, Marvel, Media Watch, Netflix, Paramount, Social Justice Warriors, Star Wars, unemployment, unions, Warner Brothers
Riddle me this, Batman.
If streaming killed the market for DVDs, why didn’t cable TV and VCRs and DVRs kill the market for home video?
I honestly don’t think the market for DVDs died. I think it was killed. Someone, somewhere, who owns a lot of consultants that talk to Hollywood, convinced all these studios that Netflix was the way of the future. First it convinced them to open their catalogs to Netflix, and then it convinced the studios to go all in on their own streaming platforms.
Think about it. How crazy is it that you can binge watch a dozen seasons of your favorite show? How insane is that business model? If anyone at the big studios had two brain cells to rub together, they wouldn’t have given their catalog to their competitor. They would have told Netflix “You can have Season one and maybe Season Two if this show is a long–runner. If someone finishes those seasons and is hungry for more, they can damn well hunt down the show on Blu–Ray.”
Same for movies. The studios could have forced Netflix into the same contracts that Cable TV was allowed, where Netflix can show certain movies on rotation. If you don’t watch that movie now, you have to wait until it is available again in a few months.
They didn’t do this, partly because Hollywood hasn’t been promoting smart people for the past thirty years, but also because someone, somewhere, decided that you will own nothing and be happy.
1. First, I don’t think streaming killed DVDs/Blu-rays. Criterion is doing quite well.
2. I do think it severely damaged the DVD market for things people might have rented but weren’t interested in buying.
3. I think it’s merely a case of executives saying “Hey, if we license it to Netflix, we add X amount to our quarterly profits.” Which is the biggest driving concern for corporate management of publicly traded companies. And there are no real costs associated to licensing something to streaming, as opposed to physical media. They probably see that as win-win.
4. And if it reduces DVD sales next quarter? Well, that’s a problem for Friday Bojack…
5. Cable etc. didn’t do much to kill the demand of physical media because the linear nature meant you couldn’t just watch it over and over again. The non-linear nature of streaming allows people to rewatch something as many times as they want.
6. Another benefit from a network executive’s point of view: DVD sale = one-time purchase, but streaming subscriptions mean recurring monthly revenue.
OTOH, Twisters has crossed the $200 million mark domestically, and $300 million worldwide, and it still climbing. My wife and I saw it last weekend (for the second time) and the theater was packed 3 weeks after opening. That tells me a good story will still attract an audience at the movies; but that people won’t come out to see formulaic dreck.
And it is kind of an old-fashioned movie if you haven’t seen it. Minimal cussing (my wife pays attention to this way more than I do), a somewhat original story, no sex scenes and plenty of action.
[…] Biden Recession + Wokeness + Streaming + Strikes = Extinction Event For Hollywood. “This is why Deadline has a regular Hollywood Contraction section. Things are so bad that […]
It’s been shocking that there hasn’t been more of a market response. I keep expecting a studio to swoop in as the antidote – making movies with complex characters, real stories, classic themes – much like Fox News built an empire in response to a dissatisfied right leaning market.
Disney would seem to have sort of turned things around with Inside Out and Deadpool/Wolverine. But you have to worry that they will take the wrong lesson from those working, as every other Marvel movie they promoted recently that come after that looks terrible and very likely to lose money.
Gee, you’d think that a strike would be the last thing for people in LA to do.
But I got such a different impression from the Los Angeles Times, which seemed to me to be almost egging on a strike. “Studios Thought They Could Handle A Strike But May Spark A revolution” Mary McNamara, July 22, 2023. “Revolution” OK?
And “Hollywood saw global TV as strike insurance. Workers of the world have other ideas.” Same writer, August 10, 2023. “Workers of the world” no less.
I feel bad for the line employees and actors: they are good, solid people. But the people that led that strike…well, kind of like the striking unions of elevator doorman that somehow missed the liklihood of electric buttons and automatic doors.
Like every other corporation, the “movie industry” became captive at the top to MBA advice. Top. Men. From. Harvard. Etc. Top. Men.
And unions still haven’t adjusted to the Computer Age, let alone to the coming AI age. The “talent” Hollywood unions (as opposed to craft unions) are just as economically illiterate and stupid as your run-of-the-mill Luddites, or Journo unions. Their negotiating goals and tactics are like the days of blood-letting in medicine, and about that far behind the curve.
And, no, ‘they’ will learn nothing from the current hit movies because they dn’t believe they have anything to learn. I mean, they fvcked up a popular children’s version of a fairy tale (Snow White)!! My 4th-grade educated late Grandma could do better than that.
When the money merry-go-rounds finally grinds to a stop, we’ll see who has the loot.
I see the time coming when Hollywood will be as relevant as beer wagons pulled by horses.
Disney has two popular movies right now, but they are still in deep trouble. Deadpool & Wolverine was fun, but what else is left in the MCU? A bunch of B-listers and the DIE variants of A-listers.
Ryan Reynolds made Deadpool & Wolverine happen, but that man isn’t sticking around, or if he does, Disney will pay through the nose. It’s not clear that the remaining creative talent can generate a good story. Star Wars seems to be tapped out and worthless.
Inside Out 2 is doing well, so Disney can still do animation, but can they make a popular original story?
I wouldn’t put money on Disney.