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Top Hollywood Execs Look Ahead to a Year of Disruption

With all the glam and glitz of the just-wrapped Golden Globes ceremony giving way to the coming madness of January — TCA! CES! Sundance! NATPE! — Hollywood is bracing for a momentous year ahead.

The largest media conglomerates are in the throes of a transition that has been simplistically described as the onset of “streaming wars,” a response to the disruption that has touched every corner of the industry. Conversations on the Globes red carpet this year ranged from laying odds on winners and losers in the direct-to-consumer gold rush, to the shifting sands in the film business, to hand-wringing over the possibility of a work stoppage crippling the town later this year as the Writers Guild of America, the Directors Guild of America and SAG-AFTRA head into master contract negotiations.

Of course, there’s the lingering impasse between Hollywood’s top talent agencies and the WGA, a fight that has sparked lawsuits and a mass exodus of writers from agency representation. “It makes no sense to me that they’re not talking to each other,” says NBCUniversal vice chairman Ron Meyer, a co-founder of CAA. “Every deal can be made. Both sides have reasonable arguments. I say get everybody in a room, and don’t let them leave until they resolve it.”

Comcast chairman-CEO Brian Roberts says he is encouraged by the trends he sees in Comcast’s core cable-systems business and in the prospects for NBCUniversal’s growth in streaming. The fact that consumers have so eagerly embraced the streaming revolution is good news for Comcast, he says, because all of that content consumption requires a robust broadband connection.

“The momentum of broadband and streaming is pretty exciting,” Roberts says. “With all the streaming that’s happening, people love their broadband. We really
have a lot of momentum, and I hope we carry that forward.”

The new year also brings a management shake-up to NBCUniversal, as longtime CEO Steve Burke hands the mantle of chief executive to Jeff Shell. “Having that transition be as successful as I hope for is a real priority to start the year,” says Roberts.

ViacomCBS president-CEO Bob Bakish says he’s prepared for tough decisions in the coming months about where the newly enlarged media company focuses its energy and resources. The merger consummated in December greatly eases Viacom’s dependence on domestic cable channels as its big driver of earnings.

The entertainment cable-programming business remains a strong source of cash flow for the major media conglomerates. But it’s now seen as a melting ice cube
for brands that don’t have the cachet with viewers to make the leap to an on-demand streaming world. Disney is experimenting with branding some of FX’s
highest-end adult scripted programs as “FX on Hulu” and presenting them as streaming exclusives. That decision, unveiled in November, is sure to rankle
some of Disney and FX’s longtime cable distribution partners. And ViacomCBS, AT&T, NBCUniversal and others have to contend with existing cable assets that do not have the same marquee value as FX.

“We’re an industry in transition,” remarks Bakish. “We’re moving from overwhelmingly linear consumption to on-demand consumption. So we’ll evolve our product line and how we invest. The good news is that because of the breadth of the assets of the combined company, we’re now very well positioned to do that.”

But it’s not just the old guard that has stumbled in the face of overwhelming competition for consumer attention. Facebook is working to find the sweet spot for the Facebook Watch platform. Fidji Simo, head of Facebook’s app and its video efforts, notes that Facebook Watch draws some 720 million people every month. But the social media giant has yet to field a major hit among its original programming efforts, which are limited in scope compared with those of its FAANG rivals.

“We see Facebook as a great complement to all the great activity happening in TV,” says Simo. “There’s actually a lot of space for a lot of players taking a lot of different approaches.”

“We’re an industry in transition. We’re moving from overwhelmingly linear consumption to on-demand consumption. So we’ll evolve our product line and how we invest.”
Bob Bakish, ViacomCBS president-CEO

For Facebook, the overriding criterion for its programming is whether it helps corral a fandom online to discuss — or, rather, obsess over — every detail of the show. Facebook Watch has had success with “Red Table Talk,” the frank talk show hosted by actor Jada Pinkett Smith. That encouraged the company to partner with Endeavor on the launch of a property hosted by Steve Harvey.

“We see ourselves as in the content game but also complementing a lot of the efforts that other platforms are doing,” Simo says. “The focus is on content that builds community.”

Warner Bros. chairman-CEO Ann Sarnoff, meanwhile, is about four months into her job leading the storied studio known for the robustness of its film operation. As parent companies WarnerMedia and AT&T put their focus on delivering a fire hose of content to the HBO Max streaming platform, set to bow in May, Sarnoff says Warner Bros. has to examine its options. The studio has had a string of disappointing outings at the box office with midrange-budget adult movies, including Clint Eastwood’s “Richard Jewell” and “Just Mercy.” The struggles of adult-oriented titles at the multiplexes fuel industry talk that those kinds of titles are now destined for opening weekends on Netflix, Amazon, Apple, et al.

Sarnoff sees the widening window of opportunity for content on streaming platforms — HBO Max and otherwise — as a good thing for Warner Bros. because it gives the creatives on the studio’s roster more places to sell shows. “It keeps us challenged, and it keeps the talent we’re working with more interested,” says Sarnoff. “They now have wider opportunities to make movies and TV shows.”

The needs of HBO Max will influence Warners’ long-term approach to navigating the box office and the types of movies it makes. “We’re evaluating,” she says. “We’ll have to see what HBO Max’s appetite for movies is. Maybe some [titles] will go straight to HBO Max.”

Tom Bernard, co-president and co-founder of Sony Pictures Classics, doesn’t hold back when asked his view of the health of the film business. He puts the blame squarely on “oblivious” exhibitors who have dropped the ball in the retail marketing of movies.

“The exhibitors have not realized that they now have to reach out to the audience and let them know the movie is coming out before it opens,” Bernard says. “The newspapers don’t have ads anymore. The theaters are still selling candy and popcorn. They should be monetizing their data to get to every person they can. But that’s not happening, and until that happens we are in big trouble.”

Bernard cites Canada’s Cineplex Cinemas as a shining example of an exhibitor that has embraced technology to learn more about moviegoers and to market titles more effectively to customers who are already inclined to give them repeat business. “That’s the new commercial for marketing a film,” Bernard says with indignation. “And they can make money by selling their data. But they’re oblivious,” he says of major U.S. exhibitors, although he does not name names.

As a newcomer to the film side of the industry, Sarnoff says she’s been inspired by watching the growth of video game sensation “Fortnite.” She sees potential for Warner Bros. to prosper with material that is immersive across multiple formats, which could be a key to keeping younger consumers engaged with traditional movies and TV properties. “You’re seeing a fusion of different entertainment offerings, and the lines are getting more and more blurred for the next generation,” she says. “We are in all of those businesses already, so we’re looking to be more integrated going forward to produce across the platforms in
a more fluid way.”

Perhaps the hardest part about steering content and distribution strategies at a time of upheaval is the need to make bets on projects and deals that may not come to fruition for a year or more. HBO programming president Casey Bloys sees the onset of HBO Max as insurance.

“If you’re a cable network and haven’t set a plan for the future, I don’t know where you’re going to be” in the coming years, Bloys says. “I look at [HBO Max] as a matter of our future and allowing HBO to continue to do the work we have always done.”

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