Hollywood’s CEOs are suffering. Not primarily from labor disputes or industry disruption or public-relations issues, but from vincible ignorance, which seems to be endemic in C-suites of all industries. Under pressure to deliver to Wall Street, too many CEOs have lost the plot of their own movie. They are not running companies to profitably deliver a good product, such as a book or a cup of coffee or, in this case, a movie or TV show. They are running companies to deliver good profit. The quality of their product has ceased to matter.
I blame the general stagnation of our current age and its associated rent seeking on the MBA. MBAs have spent decades teaching and preaching that what the business does doesn't matter. All that matters is financial alchemy.
"Forget building a better mouse trap! Take on venture debt, buy out all the mouse trap makers in your area, make their products worse (or keep them the same and sell them under a different brand name - whatever doesn't matter anyway) and jack up the prices. What are they gonna do? Go to someone else?"
"Content business? What content business? Those old Hollywood studio executives were hacks! They still cared just a tiny bit (a vanishingly small bit) about making a 'great movie.' What phooey! Buy up licenses, sell them for as cheap as possible for a while and then flood the zone with generic content. They won't know the difference! It's all the same!"
The reality? People do care. They might like slop, but they like well produced slop. Not just any generic, store-brand slop.
No matter what the artistic merit of Friends and The Office is; hundreds of thousands to millions of people subscribed to Netflix to watch them over and over again. When those properties were gone, they slowly began to ebb away from the platform. Starting in 2019, when Netflix first lost the IP,
Their response to their decline wasn't to create better series or a better experience, but to crack down on sharing passwords. It made their subscriber numbers net positive for one or two quarters (so far), but you don't have to Fermi to predict how this will end. https://www.theverge.com/2023/6/9/23755156/netflix-subscribe...
I fundamentally agree with this. When Netflix demonstrated there was value in the IPR, the IPR holders took it back to get that value themselves. Netflix had shown it could make amazingly good content, but at higher risk and cost. It's got scared of the risk side. Too many flops? cancel after 2 episodes, never mind a season. So what if "fans" are ballistically angry and unfinished story arcs, they don't pay our KPI!
But, we also have short memory for the french metric kilometres of sheer dreck put out. I mean, "b movie" exists as a term because of it. hence D list celebrities exist because b list movies exist (kinda-sorta)
"Barton Fink" tells the story well: get amazing talent, smash the joy out of their life by applying the old school hollywood machine.
Disney has got scared too. It doesn't know if it will ruin the longterm income from Star Wars, by making more star wars. Its milked its goldmine of cartoons for 5 or more decades, and has a long term view (hence the remarkably bizarre disney thing about "putting it back in the vault" for a 5-10 year window so that a whole new cohort of consumers can be made to buy it)
What always confused me about such a large number of networks/IP owners deciding to open their own streaming service was that even if every single streaming service was full of amazing content, there never was any indication that most people would want to subscribe to all of them. There's a big market for people willing to pay $15/month to get a ton of stuff to stream, but there's a lot fewer people willing to pay $75/month for five different streaming services; it doesn't matter if each of them had 20% of the "good" content from before if no one wants to pay 5x what they're already paying. Some of the wave of services coming out after Netflix's boom made sense; Disney probably has the largest set of IP of any company in the world for a streaming service, HBO already was a premium service that had demonstrated they were able to produce content people were willing to pay for but...is anyone really shocked that CNN didn't have enough draw to maintain a profitable streaming service? I suspected that the proliferation of streaming service wouldn't last forever, and that eventually there would be a consolidation into a much smaller number of major players, but I didn't think it would take so long that the people in charge would end up grinding the entire industry to a halt because they'd take so long to finally figure out that it wasn't sustainable.
Netflix's streaming never made sense to me even when they were the only game in town. I think they benefited from a halo effect from their compelling DVD mailing service which actually had a ton of great content. But eventually people figure out that the streaming service only has a few thousand movies, which means the odds of the particular movie you want to watch being offered is very low.
I used to work in a video store, and even though we had a lot of movies available, most people only wanted a relatively small number of new releases.
I really miss when Netflix DVD had a truly vast back catalog of obscure films, but I suspect a lot of them didn't circulate all that much.
With streaming, the movies that people want always seem to be available somewhere. You might have to subscribe to a half-dozen services to get all of them, or rent them a la carte. Each of those services has some back catalog as a kind of nudge to keep watching this service rather than cancel and jump to some other service while waiting for the next big movie to come out. But they don't seem to expect any individual item to get much play.
Netflix in particular seems to mostly want to cut out the middle man and produce its own content. A lot of Netflix's most popular items are their own. I'm not sure I understand the economics of that -- they're spending major-studio-money on films ($100M+) and then using it as a "loss leader" to for their all-you-can-eat service.
They didn't mind paying for google but when something better comes along for less they clearly will take that. Netflix came along and the studios sold their content to them as an extra. Now that their cable business is gone they need Netflix to make up the revenue but everyone is locked in at $20/mo
Netflix provides on demand, advertisement break, watch on any device media. Streaming is objectively a better product than linear cable or satellite TV.
>HBO already was a premium service that had demonstrated they were able to produce content people were willing to pay for but...is anyone really shocked that CNN didn't have enough draw to maintain a profitable streaming service?
To be fair to CNN, the creation of that service was a weird saga where an outgoing CEO wanted to push it front and center as a pet project and spent an enormous amount of money on it.
But then when he was forced to leave due to a scandal just as the service launched, the incoming CEO had no love for his predecessor's pet project. So he pulled the plug immediately after all the money had already been spent.
Its a textbook example of the C-suite not actually caring about the business as a whole. Maybe the product could have been successful (although it is hard to see how people would pay for a product they don't want to consume when its free), but due to circumstances unrelated to the product, it never got a fair shot.
What surprised me is the number of companies that declined free money from Netflix and decided that the cost to actually make a streaming service was negligible. They could just 2 or 3x that money in a year or two with massive subscriber numbers, because those roughly 5 shows in 40 years of back catalog were just that good.
My own experience as a child in the UK was 1 commercial, 2 state. It became 1 pure commercial, one semi commercial (C4) and 2 state before I left. I believe the UK is now up to BBC5.
The Australian experience I emerged into was 3 commercial, 2 state/semi-state (ch 7,9 10 commercial, ABC/SBS state/semi-state)
I posit, purely from interest, that in the H-H interest sense of 'monopoly' 5 independent agencies broadcasting and either taking Ad revenue or state revenue or a combination is actually pretty bloody good: they have economies of scale, and they can commit to both make shows, and screen shows.
Now, we didn't lose any of those. So 5 in OZ is joined by Foxtel, Stan, Binge, NetFlix, Disney+, HBO+, Amazon, Paramount. You might say "well from an HH index point of view, this must be better" but the experience is no: it isn't. They can't make enough ad revenue to make content, and they compete with the IPR holders for content, and the content is now more diffuse. Its actually not as "good" as old school TV.
W
I actually miss pre-streaming TV. I miss the sense of unity which came from watching the 6 or 7 o-clock news with millions of other people. Timeshifting existed in VHS days but most people didn't time-shift and couldn't binge-watch unless one of 5 broadcasters decided to binge-programme.
What we lack, and the UK has, is time-shifted. So, keep 5 (ok now 25) basic broadcasters but allow them to run their content on 3 distinct time feeds so you can "watch" things without missing them. I think THAT was smart.
TL;DR I watch some streams, but I miss 'channels' and I don't want to have to pay for bundles, or streams, as much as other people seem to want to.
What are your thoughts and experience with ads to support the channels? I'm not sure that I could go back to watching US broadcasts in real time without a DVR to skip the ~20 minutes per hour of commercials. US public television at least puts the non-content filler between shows, not in the middle.
Beautifully written: my personal feeling is that the decline in the quality of everything around our lives are strongly correlated with the increased focus on value capturing rather than value creation.
It's a weird prisoner's dilemma, since value creators will always be bled dry by value capturers, but if value creators stop existing, value capturers have no value to capture anymore. Then they start flinging crap at the wall hoping something sticks, because in their intense drive to capture value they ignored to learn how to distinguish truly valuable content.
"Forget building a better mouse trap! Take on venture debt, buy out all the mouse trap makers in your area, make their products worse (or keep them the same and sell them under a different brand name - whatever doesn't matter anyway) and jack up the prices. What are they gonna do? Go to someone else?"
"Content business? What content business? Those old Hollywood studio executives were hacks! They still cared just a tiny bit (a vanishingly small bit) about making a 'great movie.' What phooey! Buy up licenses, sell them for as cheap as possible for a while and then flood the zone with generic content. They won't know the difference! It's all the same!"
The reality? People do care. They might like slop, but they like well produced slop. Not just any generic, store-brand slop.
No matter what the artistic merit of Friends and The Office is; hundreds of thousands to millions of people subscribed to Netflix to watch them over and over again. When those properties were gone, they slowly began to ebb away from the platform. Starting in 2019, when Netflix first lost the IP,
"Netflix suffers first major loss of US subscribers, blames price hikes," https://www.theverge.com/2019/7/17/20694711/netflix-friends-...
and continuing (with some ups) into 2023,
"Netflix loses almost a million subscribers," https://www.bbc.com/news/business-62226912
Their response to their decline wasn't to create better series or a better experience, but to crack down on sharing passwords. It made their subscriber numbers net positive for one or two quarters (so far), but you don't have to Fermi to predict how this will end. https://www.theverge.com/2023/6/9/23755156/netflix-subscribe...