Five big themes for Hollywood in 2024

The New Year in Hollywood always brings a few traditions: resolutions, predictions, and last-minute deals made before the end of the quarter. Naturally, media reporters think about everything that went wrong over the past 12 months and pretend they have the answers to make things better.

So, in the movie industry’s ethos of doing the same thing over and over again until it stops working, here’s our roundup of the themes that defined entertainment in 2023 and how they’ll continue over the next 52 weeks.

Paramount Global is up for sale; There is no doubt about that. This seems to be all anyone in the media industry talks about, so get ready for a year of Hollywood merger mania.

Warner Bros. Discovery is in early talks to combine its business with Paramount, bringing Batman, Superman, HBO, HGTV, Paw Patrol, Yellowstone, MTV and Top Gun under one roof. It comes after news that Skydance’s David Ellison was kicking the tires of National Amusements, the controlling shareholder of Paramount run by Shari Redstone.

Is Comcast now getting into the mix? What happens to the news business if CNN and CBS News are part of the same company? The apparent urgency to make some sort of deal does not bode well for the overall state of the media industry. Regulatory agencies will take note, and depending on how the 2024 election goes, this could be the worst time to try to pull off such a deal.

Fewer banners, but some can become profitable

Few people dispute the idea that there are too many streaming services, and not all of them can survive. Jason Kilar, Hulu’s founding CEO and former WarnerMedia president, argued in an article that streaming services must achieve a certain scale, say 200 million global subscribers, to become a sustainable business.

Disney has integrated Hulu content into Disney+ for a “one app experience.” Paramount+ has already acquired the Showtime brand and may not continue as a standalone streaming channel, since it could become part of Warner Bros. Discovery. People love “Poker Face” and I’m a fan of “Killing It,” but if there’s a compelling strategy for Peacock, it’s unclear. Mobile phone providers have already begun offering blanket offerings to competing streaming services.

Several legacy media companies have said that 2024 will be the year their streaming services become profitable. Maybe so, but it will take a while before quarterly profits make up for all the billions of dollars in cash it burned in the course of this transformation in its attempt to become Netflix.

Analyst Rich Greenfield, who encouraged traditional studios to get involved in streaming, now says companies that aren’t like Netflix should pull back on their ambitions. Mergers and acquisitions will not save them, he said in a recent blog post. “Legacy media companies simply don’t have time to wait and hope for M&A as a strategy,” he wrote.

The sequel to Hot Summer of Action

Six months of strikes turned 2023 into what for many was an almost lost year for the film and television industry and inflicted billions of dollars in damage to the local economy. And to think it’ll only be two and a half years before Hollywood gets back into it when their hard-won Writers Guild of America and SAG-AFTRA contracts are renewed.

Actually, scratch that. Because contract negotiations for the International Alliance of Theatrical Stage Employees, which covers below-the-line workers, are scheduled to begin within months, raising the possibility of another summer of labor unrest. Just thinking about it is exhausting.

The Alliance of Motion Picture and Television Producers, its member studios, and labor leaders on the other side have certainly learned something from the seemingly never-ending catastrophe. It has never been in IATSE’s nature to strike. This has never happened in the Union’s nearly 130-year history. But past behavior does not necessarily predict future behavior, especially now.

More efforts should be made to avoid long and damaging blows by having the two sides communicate more between contract negotiations and starting serious talks well before bargaining agreements expire.

The recovery of the cinema business has been postponed

If Hollywood can let go of the idea that the theatrical film industry will generate $11 billion in gross domestic revenues anytime soon, or perhaps anytime soon, it could be a mindset for a healthier industry.

With the U.S. and Canadian box office this year up about 20% from last year but still down about $2.5 billion from pre-pandemic levels, it’s clear that a shortage of wide releases is the main reason for the shortage. It’s no coincidence that there are 18% fewer major films this year than in 2019, which is very close to the gap in total ticket sales.

This, combined with the lackluster results of films like Wish, The Marvels, and Killers of the Flower Moon, dampened the enthusiasm generated by the over-performance of films like Taylor Swift: The Eras Tour, and Five Nights at Freddy’s.

Which brings us to 2024, which looks bleak due to production delays due to strikes. The loss of “Captain America: Brave New World”, “Mission: Impossible – Dead Reckoning Part II”, “Snow White”, “Spider-Man: Beyond the Spider-Verse”, “Avatar 3”, “Blade” and others could represent a total of 1.7 billion. Dollars in revenue disappeared from the year, according to analyst Eric Handler.

Is the film industry facing a demand problem? maybe. He definitely has a supply problem. Some of the more serious, adult-oriented films will remain largely streaming offerings, with Netflix continuing to sponsor directors taking on interesting projects, like Todd Haynes’ adventure film May December. Who knows how long Apple might be willing to allocate $250 million to support a Ridley Scott historical epic like “Napoleon,” given a strategic justification that remains unclear.

On the plus side, studios’ experiments with windowing (i.e., more flexibility to quickly bring theatrical releases to home viewing platforms, whether it’s a $20 rental or streaming), appears to have paid off. Universal, for example, is still taking risks, including through its Focus Features unit. Can a business be smaller but healthier? We may have to wait until 2025 for the answer.

Will Disney go on the attack again?

Walt Disney CEO Bob Iger said he has moved from a “fix” approach to a “build” approach. But what is that like?

Not to mention, the company is still on the defensive in many ways, having to fight a proxy battle from activist investor Nelson Peltz who has the backing of former Marvel president Ike Perlmutter and defunct former CFO Jay Rasulo. At least Florida Gov. Ron DeSantis’ war on vigilantism appears to have backed away from the Mouse House for now.

Additionally, there are quality control issues at Marvel Studios that need to be dealt with, as well as the animation, which needs to get its creative mojo back.

Due to the fallout from the strike, Disney’s roster appears weak. “Deadpool 3” is Marvel Studios’ only scheduled release. They now have to reconfigure the ending point of the current saga without Jonathan Majors. Iger has largely pushed back on talk of considering spinning off linear networks, including ABC, while still moving forward with turning ESPN into a full direct-to-consumer offering.

He reorganized the company by putting power back in the hands of the creative heads. In other words, the pressure is on.

The stuff we wrote

It hosted one of the oldest film festivals in Los Angeles, and then it collapsed. What happened? Outfest, which has hosted one of the industry’s most prominent LGBTQ+ film festivals, has faced a financial crisis after a series of clashes between board members and the group’s former CEO.

A wild year for cable news: Shakes, firings, and ratings challenges. Fox News and CNN saw declines from last year while MSNBC saw slight gains. Networks still face an existential threat from cable cord cuts.

“Schindler’s List” has turned 30 years old. They may be worth more now given how divided they still are. A great article by Times film critic Justin Chang: Three decades after the film’s release and Oscar success, its influence is still being felt, both aesthetically and as a strategy for tackling the unthinkable.

finally …

Everyone’s talking about the best new albums of the year. But what about the most important releases? Along with The Alternatives’ recent remaster of “Tim” (which we’ve already discussed), this is a great time to check out “The Complete Dirty South,” an expansion of the magnum opus by Drive-By Truckers, which came out roughly 20 years.