The strikes were just one battle. Hollywood is still fighting a war for survival

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Hollywood writers and actors are returning to work after one of the longest strikes ever in the entertainment industry. The big question now is: What does this work look like?

Unions are celebrating hard-earned bumps on wages and protection from the encroachments of artificial intelligence.

In the meantime, studio executives may want to keep the champagne on ice.

Hollywood is going through an era of rebuilding, a painful and awkward transition fueled by tectonic changes in technology and consumer behavior. Although the strikes were devastating, they were just a blip compared to the many other existential dilemmas weighing on media companies.

Goodbye to traditional TV

For many years, media giants like Disney, Paramount, and Warner Bros. Discovery, CNN’s parent company, could rely on their so-called linear TV assets for a steady stream of money. (The industry refers to traditional cable and satellite television as “linear” because the content flows on a one-way street from studio to network to your living room on a schedule that you, the viewer, cannot control.)

This is all coming to an end. Cable TV subscriptions have been declining rapidly for a decade, and no one believes the trend will reverse. TV still makes money, of course, but much less than before.

“Linear TV and satellite are going down a cliff and are going to be pushed away,” according to Bob Iger, who made that statement more than a year ago, before he began his revenge as Disney CEO. “I can’t tell you when, but it disappears.”

What will replace the TV? Broadcast of course.

how? We’re not really sure yet.

Banners, banners everywhere

Sometime in the late 2010s, you may have found yourself subscribed to a surprising number of TV apps. You’ve got your favorite shows – Netflix, Hulu – and a variety of eps and junk – Disney+, Apple TV+, Amazon Prime, Peacock, Paramount, and various iterations of HBO (RIP, HBO Go, HBO Now, HBO Max – we’re only Max now, for the record.) Max and CNN share a parent company with Warner Bros. Discovery.

This is the result of Netflix coming to everyone’s lunch, stunning Wall Street with global subscription growth that has propelled the company to the front of the streaming pack. Suddenly, everyone had to have a live streaming platform. Streaming is the future! All you have to do is whisper the abbreviation “OTT” — “over the top,” also known as using the Internet to bypass cable providers — and watch the new capital roll in.

The problem is that none of these apps, with the exception of Netflix, have yet figured out how to maintain a significant profit from those services.

Warner Bros. said: Discovery last month said Max would be “slightly profitable” in the first half of 2023. Most others are burning through cash.

On Disney’s earnings call this week, Iger said he was “confident” that its streaming services would achieve profitability by the end of 2024.

We were bored.

Even if the entertainment giants weren’t so confused by the economics of streaming, they would still face a problem on a more fundamental technical level.

For better or worse, TV and movie audiences don’t always buy what studios are selling — perhaps spoiled by the massive buffet of content that’s been greenlit in the pivotal streaming craze. There was a time when you could simply put Harrison Ford in a hat in the desert and make a nice profit. But Disney learned the hard way this summer that’s no longer the case.

Audiences have more screens competing for attention, and there are only so many hours in the day we can devote to them. Not only are Netflix and Disney competing against each other, but they’re also competing against YouTube, TikTok, and endless podcasts.

Earlier this year, market researcher Insider Intelligence estimated that American adults who use TikTok will spend roughly 56 minutes a day on the app in 2023. That’s roughly an hour in which we’re not watching TV or the ads that many platforms rely on. For revenue.

The box office has been a mixed bag as well. “Barbenheimer” movies and Taylor Swift concerts have been huge wins. But there have also been notable failures in the world of expensive sequels like “Indiana Jones and the Dial of Destiny” and the more recent “Ant Man.”

It is clear that audiences are not abandoning films, but are becoming more selective. This could prompt studios to cut back on their production, leaving actors and writers with fewer jobs while they get franchises.

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