2024-02-14 18:06:14
Everything seems to be the same in Hollywood. Last year’s strike of screenwriters and actors is over, the stars are back on the red carpet. At the beginning of the year, the film Oppenheimer and the series Struggle for Power won the Golden Globes, followed by the Oscars next month. But another crisis is in the air: Hollywood is shrinking.
According to 17 managers, film agents and bankers who were contacted by the Reuters agency, the era called “peak TV” or “quality TV” is coming to an end. The English terms denoted production- and thematically bold television projects with elaborate scripts and film aesthetics, which were filmed throughout the last decade thanks to the boom in video stores.
Now, insiders in senior positions say that due to the economic situation, fewer series and films will begin to be produced, and their budgets will also come under greater scrutiny. Both video stores and cinemas will have to work even harder to be profitable. “Hollywood is going to shrink in a big way,” predicts a veteran TV producer who asked not to be named. “Regarding the quality of the content and the money invested in it, there will be a significant investigation,” he estimates.
The pandemic is over, but people have not returned to cinemas in the same number as before. | Photo: Profimedia.cz
For example, the analyst company MoffettNathanson talks about the beginning of the “third phase of the streaming wars”, as he calls the situation when services such as Netflix, Disney+, HBO Max or Skyshowtime are competing for the attention of subscribers in the video store market. However, the platforms that Hollywood promised a bright future for are still often struggling to turn a profit after years of existence, and investors are pushing them to much more control over spending after years of reckless spending.
This is also why investments in the production of video library content this year will probably fall below the level of 2022. For example, the investment bank TD Cowen points out that most platforms today already charge users a higher subscription price and, on the contrary, offer less content, which raises questions about the long-term sustainability of the business model.
Canceled series
While a record 633 feature TV series premiered in the US and Canada in 2022, last year there were only 481 due to the strike, and this year the number will drop again. Experts expect that in the future it will stabilize around three hundred.
For example, the market leader Netflix already released a third of the programs played year-on-year last year, according to the analysis firm Ampere Analysis. The company did not want to comment on the data, but investors are apparently satisfied. Netflix turned profitable, adding 13 million new subscribers in the last quarter of 2023 for a record total of 260.8 million paying customers.
According to voices from the industry, the managers of similar companies are now carefully considering which series to give the green light. When they approve them, then with a smaller budget than before. And if projects don’t do well, video libraries are quick to get rid of them.
For example, last year Disney+ canceled the series Born in America with actress Michelle Yeoh and Ke Huy Quan, stars of the Oscar-winning film Everything, Everywhere, All at once. HBO ended the series Idol from the world of show business and Lakers: The rise of a dynasty from the sports environment, Hulu TV will not film the continuation of the historical saga Big with actress Elle Fanning, and Netflix will not show the finished sci-fi thriller The Mothership with Halle Berry in the main role.
In addition, for example, the studio Warner Bros. canceled the superhero Batgirl with a budget of 90 million dollars, the animated family Scoob! Holiday Haunt for less than half of that amount and, most recently, a ready-made story based on Looney Tunes cartoons.
According to Reuters, the market has entered a stage where series will have fewer series and each will count fewer episodes than before.
After unprecedented criticism, HBO has decided not to continue the miniseries from the world of show business Idol, in which the singer The Weeknd starred with the actress Lily-Rose Depp. | Photo: Eddy Chen
Superhero fatigue
The screenwriters’ and actors’ strike, which has already ended, is yet to be reflected in the results of the cinema market. While last year around a hundred films went to the widest distribution in the USA and Canada, this year there will only be around ninety and the North American market is estimated to take in around eight billion dollars. This will be 10 percent less than last year and even 30 percent less than in the last pre-pandemic year of 2019, when it reached a record of almost $11.4 billion.
Cinemas have long since reopened since the coronavirus pandemic, but they are not able to attract enough viewers back. They got used to watching movies and series at home during the lockdown imposed by hygiene measures, so they spent more on video stores and went out less. Not everyone can afford an increasingly expensive visit to the cinema.
According to CNBC TV, analysts from Wall Street expect the cinema market to surpass the 10 billion mark again in 2026 at the earliest, which will be richer in big-budget titles.
Already in December 2025, multiplexes will start screening the third part of the sci-fi saga Avatar, to which will be added the film Avengers: The Kang Dynasty from the superhero saga from Marvel, a film about the bounty hunter Mandalorian from the world of Star Wars and at the very end of 2026 another full-length Star Wars.
A film about the bounty hunter Mandalorian and his little green companion Grogu, called Baby Yoda, will be released by the Walt Disney Company in 2026. | Photo: The Walt Disney Company
It must be a spectacle
The numbers are one thing, but there’s also the overall mood change. Executives talk about long-term “superhero fatigue,” a situation where major studios have been producing comic book movies for so many years that audiences have had enough of them.
Last year, several films like Marvels, Shazam! Wrath of the Gods or The Flash flopped commercially.
Insiders now expect studios to pick up one or two really ambitious projects, like last year’s Oppenheimer and Barbie, rather than continue to rely on quantity and comic book substance. Both films had an impact in pop culture and an extraordinary commercial response. Barbie became the most successful title of the year with worldwide sales of 1.4 billion dollars, although Oppenheimer was only in third place behind the animated Super Mario Bros. with 957 million dollars. in the film, but unlike him, he is collecting awards and is currently an Oscar favorite.
“It has to be a spectacle,” an unnamed manager of the studio behind one of the biggest big-budget titles of recent years summed up current thinking in the industry for Reuters. “It has to be a film that people will need to see in the cinema. We can’t give the green light to a giant project and then tell everyone to watch it at home, so they won’t miss out on that much,” illustrates the manager.
After all, users watch everything possible on streaming services, but primarily not the biggest, loudest and most expensive action movies. For them, cinema remains the main outlet. And for them, this production is the most important – of the 100 films shown in the USA and Canada the year before last, only 19 action spectacles procured 56 percent of the total sales.
The question is whether there will be enough of such works every year to keep cinemas going, concludes Reuters.
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