What’s ahead for Hollywood?
With the pace of change accelerated by the pandemic, the future remains unclear for the industry.
A new Times feature tracks the rapid changes in today’s entertainment.
Today The Times launched the Wide Shot, a weekly newsletter about the business of entertainment. This excerpt from our inaugural edition explores the future of Hollywood:
Where do we even start? The entertainment business would love to put the problems of 2020 behind it, with box office down 80%, theaters on the brink of insolvency and productions still touch- and- go.
But the chaos isn’t over yet. In the short term, many studios have paused production amid ballooning COVID- 19 cases and an ICU capacity crunch in Southern California. As my colleague Anousha Sakoui reported late last week, a lot of folks want to keep working through the surge. The Grammys were postponed from January until March just weeks before they were scheduled to go on, in an indication of how fragile the return to work will be until vaccination is widespread.
Meanwhile, the timeline for long- term changes we’ve expected for a half- decade or more — premium early rentals, direct- to- streaming movies — was compressed into a few wild months. There’s still something jarring about firing up “Soul” or “Sound of Metal” on a laptop when you know the filmmakers intended them for the big screen.
The effects of the pandemic are proof that, as in the natural world, evolution in business isn’t always gradual; it can be sudden, violent and catastrophic, like a comet strike of the type that sent Gerard Butler scrambling for the bunkers in “Greenland.” And there’s little doubt 2021 will be an equally transformative year as studios, media companies and tech giants figure out what the postpandemic entertainment industry will look like.
Here are five burning questions for 2021:
What happens to theaters?
A handful of day- anddate releases and Oscarbait titles notwithstanding, traditional moviegoing is mostly on hold until vaccination reaches critical mass. Any comeback will take time.
“It’s not a f lick of the switch, it’s a ramp- up,” National Assn. of Theatre Owners CEO John Fithian told me last week.
I wonder how many theaters will be able to turn the lights on at all six months from now. The $ 15- billion Save Our Stages program gave a lifeline to small and midsize theaters and music venues. But AMC and other large chains — which represent the bulk of the nation’s screen count — are not eligible for it.
So what does the theatrical world look like after COVID- 19? Some executives predict the remaining theaters will increasingly bet on luxurious amenities and a film lineup dominated by four- quadrant blockbusters. That will surely be more expensive for consumers.
Much will depend on whether WarnerMedia’s direct- to- HBO Max plan is a temporary adaptation or a sign of what’s to come. Warner Bros. has signaled that it believes multiplexes will remain important, recently announcing theatrical movies for 2023, including the “Mad Max: Fury Road” prequel “Furiosa,” with no mention of HBO Max. Still, few believe that AT& T brass and Warner Media CEO Jason Kilar see their plan as simply a shortterm response.
Will small fry sur vive the streaming wars?
In the battle for streaming audiences, there are the brawling kaiju, and there’s everybody else. A little more than a year after its launch, Disney+ has emerged as a clear front- runner among the newer streamers, with its success emboldening a major revamp of the company’s structure and a dramatic increase in programming plans. Netflix, in its effort to maintain its position as library content migrates from its app, will look for more homegrown hits à la “The Queen’s Gambit” and Shonda Rhimes’ “Bridgerton.”
Apple and Amazon have an advantage in that they don’t really need Hollywood; they can afford to lose money on streaming for as long as they choose. HBO Max, a high- stakes bet by AT& T, is trying to recover from its messy launch by gambling with a year’s worth of Warner Bros. movies and stunt reboots such as the justannounced Samantha- less “Sex and the City” series.
That leaves the smaller players to make inroads where they can. Paramount+ ( rebranded from CBS All Access), Peacock and Discovery+ will have to figure out where they fit into a crowded market when people’s entertainment budgets are already stretched by subscriptions.
None of those three seem to be make- or- break priorities for their parent companies, which could increase the risk that they become also- rans.
Who will buy a studio?
With Metro- GoldwynMayer Studios being shopped to potential buyers a decade after its bankruptcy, M& A talk has returned to the entertainment industry. The question is, who’s buying? It’s an opportunity for the usual suspects, including international media and tech firms such as Apple and Amazon. The sellers are keeping their options open for a possible acquisition by a deep- pocketed company or private equity firm.
The conventional wisdom holds that one acquisition leads to others. If MGM or another studio sells to a tech player, the conversation will turn to what deals come next, though a bigger catalyst would be something like a combination of WarnerMedia and NBC Universal, which Wall Street analysts at Moffett Nathanson have f loated.
Lionsgate is a constant potential target for a tech giant or a media company looking to bulk up. Sony Corp. has long seemed resistant to the idea of selling its Culver City studio, but that could change as Silicon Valley companies circle the industry in search of something that can give them an edge in the content space. Of course, a company the size of Google, Apple or Amazon might decide that an asset like MGM, Lionsgate or even Sony isn’t big enough to put it over the edge competitively. What if one of them decides to go after something bigger?
Will Washington hobble Big Tech?
The tech world, meanwhile, has its own issues to deal with in Washington, where antitrust sentiment against Silicon Valley has been brewing. With Trump’s banishment from mainstream social media platforms and Parler’s exile from app stores, the antitech criticism has lately been most visible on the right.
But concern over the internet companies’ inf luence is bipartisan. Facebook, which also has toyed with the content business, could take additional political heat over its role in fomenting the kind of collective delusion that inspired the mob invasion of the U. S. Capitol last week.
The government has already launched a case against Google over its dominance of search, and Apple and Amazon have come under scrutiny for how they wield the power of their platforms.
Big Tech’s forays into entertainment probably aren’t a main focus of regulators. However, intensified scrutiny could make it less likely that one of the socalled FAANG companies ( Facebook, Amazon, Apple, Netflix and Google) makes the kind of splashy media company purchase that becomes a natural bull’seye for lawmakers and regulators.
Will the push for diversity deliver results?
Following the police killing of George Floyd in Minneapolis, media companies were all over the airwaves and social media proclaiming their support for racial justice. The corporate hashtags were met with the expected eye rolls.
Where was the true action? Internally, there were inclusion workshops and Zoom seminars, all acknowledging the work that needs to be done to diversify the overwhelmingly white C- suites at the studios and networks. While audience demand for greater onscreen representation has resulted in more inclusive storytelling ( look at the hit that was Sony’s “The Happiest Season” on Hulu), progress in terms of people of color getting decisionmaking power remains slow.
Some are doing the necessary work, including Michael B. Jordan and Ava DuVernay. As my colleague Yvonne Villarreal wrote, DuVernay and former Warner Bros. TV head Peter Roth have teamed for a plan to diversify production crews, which seems like a step toward real change. MGM promised to relaunch a whole film label, Orion Pictures, with a new mission to elevate diverse stories and storytellers.
As for the broader industry, we’ve heard promises too many times to enumerate them all here. We’ll be watching to see if the familiar patterns return.
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