The year of the flowing bubble burst

In late November, AMC Networks announced impending layoffs and the departure of Christina Speed, its CEO after only a few months. The move in itself was not unusual amid growing economic uncertainty. Earlier that month, tech giant Meta cut more than 11,000 jobs. But a memo to AMC employees from CEO James Dolan – yes, that James Dolan – Explaining the decision struck a chord in the entertainment business. “We thought wire-cutting losses would be offset by gains in flow,” Dolan wrote. “This has not been the case. We are basically a content company and the content monetization mechanisms are a mess.”

In kind of corporate terms, Dolan summed up the state of the earth: Broadcasting may be the future, but for the time being, it doesn’t pay the bills. The subtext to Streaming Wars has always been that the tough days of free-for-all spending won’t last forever. The battle between heavyweights like Apple, Amazon and Disney — and smaller companies like AMC, which runs more niche services like AMC+, Shudder and ALLBLK — has been one of a handful of players left, not to generate a rising tide that lifts all boats. But 2022 was a year that undermined some of the core assumptions that led to the digital Hollywood revolution. It was also a year that made it clear that the days of broadcast power are firmly behind us in ways that are tangible to the average consumer, not just the reading pro. final date Comments on the lunch break.

At the beginning of the year, for example, you can broadcast Westworld on HBO Max in anticipation of the upcoming hit season Once. Now, not only Westworld canceled; It was removed from the platform completely so that its catalog could be sold to an as-yet-unidentified third party. A few months ago, millennial home cooks like myself were looking forward to airing Chef Allison Roman’s new show on CNN+. Now, the project has been delayed because its entire platform was suddenly scrapped. Back in January, you couldn’t find ads anywhere near the interface of Netflix. Now, you can trade a few minutes of your time for a cheaper subscription price, a violation of what was once one of the company’s most coherent principles.

This principle can be summed up as follows: The future of entertainment is a revenue model that trades in the traditional sources of revenue – box office, crowdfunding fees, advertising – to facilitate access (by the consumer) and exponential growth (for the company). Backed by subscriptions, debt, and investors, it looked like Netflix could actually deliver on that promise for most of the past decade. I’ve spent an enormous amount of money to create films and shows that really appealed to a global audience, and then attracted enough paying customers to justify the expense. Along the way, it completely changed the way we watch TV. Users have been trained to expect full seasons at all upon release, hour long episodes with no actual breaks, and have become accustomed to imports with subtitles as a simple fact of life.

Other entertainment companies soon followed suit. They include Disney, which launched Disney+ in late 2019, and WarnerMedia, the original parent company of HBO Max. But since the latter officially merged with Discovery Networks in April, nearly a year after the new entity was announced, it has come to symbolize the limits of the streaming subsidiary for companies and fans of their output alike. In part, that’s because CEO David Zaslav, who has faced tens of billions in corporate debt, has made himself a spokesperson for the idea that putting all his eggs in an expensive basket is totally unwise. “The grand experiment to create something at any cost is over,” he declared last month, dismissing his rivals (and predecessors’) strategy of “spending[ing] money with giving away, with a small part achieved in return.”

Some of this pivot has been relatively easy to root for, such as the increased focus on theatrical releases after the previous system put the entire 2021 slate on HBO Max and in theaters simultaneously. (This tactic bolstered the service, but it also alienated longtime collaborators like Christopher Nolan, who called Max the “worst streaming service” before moving to Universal.) But it also led to some very unpopular decisions. This summer, HBO Max began the first of what would become multiple purges: canceling shows (spies), and remove them from the platform completely (vinyl), or both (Gordita Chronicles, Love of Life, Raised by Wolves, and more). What’s even more shocking is that the service has canceled almost entirely completed movies (bat girl) and TV seasons (previously renewed minx).

These drastic measures can be attributed in part to the tax write-offs of the merger fallout. But it also marks a return to the way television used into action—restoring the old ground rules and tearing up new ones to which an entire generation of viewers has grown accustomed. It was not always the case that an entire archive of a show could be accessed on command, nor that the initial distributor would keep it forever. shows like FBoy Island And the Lord by wolves They will be rented out to earn extra money for their studio, which is exactly what Warner Bros. plans to do. Discovery to do with them now. If you want to watch it after the fact, you can purchase a box set, or hope to replay while channel surfing. Many of the earlier HBO Max series seem to be leaning towards their modern counterpart: free, ad-supported services like Pluto or Tubi.

Even the biggest entertainment cause has taken steps towards a more traditional model. Less than two weeks after the birth of Warner Bros. Discovery Netflix reported its first subscriber loss in over a decade, followed by an even bigger drop in the next quarter. The ensuing drop in its share price — still less than half of what it was at the start of this year — has had a ripple effect across the industry, with peers like Disney and Paramount Global also plummeting. In response, Netflix announced the aforementioned ad layer; More small experiments have also been thrown in like Chris Rock’s upcoming live show, another inversion of a once-sacred indoor rule.

Batch releases, such as the latest two-part release Harry and MeganAnd the It has become more popular in recent years, both on Netflix and other platforms, splitting the difference between a binge and a weekly release. while, Take out the knives sequel glass onion It will be watched closely when it comes into service this weekend; If it does well enough, the movie could make a case for more experimental balloons like the very limited one-week run around Thanksgiving that brought in an estimated $15 million from just 700 theaters. For all the complaints that Netflix was leaving money on the table by not extending that window, if there is any evidence that the week helped boost glass onionPerformance on the same platform – as Zaslav says it was the case with titles like Batman On HBO Max – this may lead to more experiments in the future.

There is a common joke that the media has picked itself up where it started. Commercials, cinemas, secondary markets: all of them, as we rediscover, have had their virtues all along. But it’s not as easy as flipping a switch to bring back the old way of doing things. Pay cable continues to decline, while the box office still lags pre-pandemic totals by a full third. Part of this decline is due to a lack of supply, but also a general reluctance to head to the multiplex for the sake of genres that have been adapted as home viewing. Even the Netflix ad layer isn’t a panacea. According to the Wall Street JournalAnd the Only 9 percent of new sign-ups in the US last month opted for ads, and just under half were current subscribers who switched from an ad-free plan. Prior to this, Digiday reported that Netflix is ​​not living up to the viewership it promised to advertisers to the point of offering refunds. The company is having a hard time undoing the expectation of uninterrupted entertainment that it helped create in the first place.

That leaves companies between a rock and a hard place — or, as Dolan says, a mess. Take Disney, for example, whose shocking CEO change last month was a direct result of losing $1 billion in streaming. (Other factors played a role in the board’s dissatisfaction with Bob Chapek, but this was the deciding factor.) But once the climax of Bob Iger’s comeback wears off, Disney will be left with the same hard realities as everyone else. Unlimited growth and pre-broadcast earnings are revealed as the fantasies they always were, while previous tracks of sustainable production crumble in our rearview mirror. It’s a bleak note to end the year, but it’s best to head into 2023 with eyes open.

#year #flowing #bubble #burst

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