Screen Actors Guild joins writers on strike

Absolutely true and the best argument for the studios/producers. The industry is in crisis generally. The counter-argument to that on behalf of the guilds is that they are talking about a 3-year contract, and that the internal projections that the studios are showing to Wall Street are that they will get everything turned around in 2 years, that they've over expended sums on streaming. But still, if there's not box office, it's hard not to see that the industry is in crisis.

 

Movie making can be magic. Cool thread on the making of The Dark Knight

 

Damn you’re right. I thought they were taking the highest annual number over the last 5 years which is why I normalized it down 40% for the year they exercised options. I would be curious to know when and if they have exercised options in those five years, because that could bump if they have not or only a few have. But that makes the difference far less stark.

And never assume the Hollywood executives are liberal, especially on economic issues. They are very much creatures of their class, and almost exclusively come from the business side rather than the creative side, Iger excepted.

 

Some real interesting numbers in the article and the tweet thread. Purely selfishly, I do hope the strike is not too long - it impacts all, and my daughter may be impacted, though she is not a guild member

 

Stepping out broader, there were two large trends that put the industry where it is now - streaming and pandemic. Long before Covid, Wall Street told the studios the future was in streaming, not the theatres. Everyone still chases the Amazon model of long years of losses to establish market position. When the pandemic came along, a lot of studios thought that the stay at home directions would make the move to streaming happen immediately. And it did, to an extent, but streaming is just not that profitable in its current model.

Warner Brothers put all their first run movies direct to HBO Max (now Max), with no theatre window. That was a disaster. But like print media that put content free on the internet thinking it would drive advertising revenue that more than made up for lost subscription revenue, the studios have now trained viewers (myself included), that the wait will be short and you can watch at home.

And the streaming loss leader model just doesn't work, because consumers jump around and are not "loyal". It doesn't make sense to build up a subscriber base with great content and then think they will stay when the quality declines (Amazon model). The numbers just don't add up. I got a year of Peacock in November for $20. It is worth that many times over. But when that jumps up, I may not stay. Dropped Showtime but will likely up for two months when Billions returns August 11.

So now they have cannibalized box office for streaming, but streaming is not profitable.

The other issue is budgets, especially promotional. A lot of recent "failures" had decent box office numbers but gigantic budgets, so they are "losers". There is still a profitable market for movies with under $50 million budgets with a defined demographic target niche that will draw in at least $80 million at the box office. The problem is the Indiana Jones model (liked it), but they have to make $500 million to be considered a success. IMO, studios are too wed to tentpoles that cost $500 million but make over a billion. But Marvel seems tired; they spoiled studios looking for that annual bite of two guaranteed tentpoles. Star Wars tried to do too much.

Disney took on a TON of debt service for those two (and Pixar) on a vision of virtual tentpole guarantees. But nothing lasts forever, except the debt. Iger is correct that they tried to squeeze that IP too much, but they wanted to make the debt service back and establish Disney Plus as the dominant streamer. He acts like others made those mistakes, but not really. (They do have a library that I suspect every family with young kids must have, so there is that advantage)

Low budget horror is the current mint - usually under $20 million budget, almost always makes it up and sometimes hits big

Paramount and Comcast must merge with someone or fail.

It is a time of upheaval - the studios are right. But they made those mistakes. Wall Street corrupted them as it always does - thinking of daily/quarterly stock prices instead of long term development and growth infects almost all of American business. Most times industry professionals know their business better than investors.

There are more writers and actors employed in recent years than ever, as the studios were making soooo much content. But far fewer are making a living, because streaming residuals are not like network.

Enough for now.

 

I will say that union solidarity is strong in the industry. Rachel McAdams has little to nothing to gain personally from thee strike. If anything, she risks losing some available work. But she takes to the picket lines, as do many other established actors that have little to no personal stake, to show solidarity.

 

OTOH, today's biggest star, albeit one that personally benefits from slave labor, does not show solidarity

 

AMPTP finally trying to join the PR war. These are pretty much identical talking points to Iger, so they've obviously coordinated their message. It is interesting that Sarandos/Netflix was the next one to speak since Netflix is generally gossiped to be the main producer behind the hard line that was intended to create a strike.