DIS Shareholders and Stock Info ONLY

[wabbott]

https://www.hollywoodreporter.com/b...-max-relaunch-discovery-questions-1235369449/

HBO Max Relaunch: The Open Questions Ahead of Warner Bros. Discovery’s Next Pivot

On April 12, the merged Hollywood giant will unveil its combined streaming platform — with subscription tier pricing, programming strategy and the name yet to be revealed.

By J. Clara Chan
April 8, 2023 10:41am

What’s one way to drum up anticipation for a streaming service merger? Keep the new name secret.

As Warner Bros. Discovery prepares to unveil its refreshed streaming service on April 12, outside partners are still awaiting official word on what exactly the merged HBO Max–Discovery streamer will be named as executives continue to refer to the service by its code name, “Beam,” according to people familiar with the matter. (That code name has been referenced for several months, although it’s unclear if there are several shorthand references to the services, either for in-house notes or with outside partners.)

The event, taking place at 10 am PST on the Warner Bros. lot in Burbank and streaming online, is set to showcase what the merged company’s marquee streaming service will look like as it loses the HBO Max name and gains programming from Discovery+.

Even as Beam is used internally, WBD executives are widely expected to announce that the updated streaming service will be called “Max,” which gives a nod to the original HBO Max name but loses the HBO branding. A quick search of Max.com also appears to suggest WBD’s takeover, as the domain — up until mid-February — was previously registered to the vitamin and supplement brand Max International. The URL is now registered to Markmonitor, a domain management and security firm that works with large corporations, including Warner Bros. Discovery. And, on CNN, an airing of four-part docuseries Heaven’s Gate: The Cult of Cults was touted in a promo as a “Max Original.”

Content wise, Max will differ from its predecessor in that it won’t be enticing viewers to subscribe by offering same-day films on HBO Max, as was the case with Dune, Wonder Woman 1984 and The Matrix Resurrections during what was called “Project Popcorn” in 2021. The move away from the streaming-first film mentality, championed by former WarnerMedia CEO Jason Kilar, comes as Warner Bros. Discovery continues to cut costs under its new leadership; during the fourth quarter of 2022, WBD reported $217 million in streaming losses, down from the more than $600 million recorded during the fiscal third quarter.

“There was a lot of content that just wasn’t being viewed,” WBD CEO David Zaslav said during the company’s Feb. 23 earnings call. “That’s what led us to the conclusion that direct-to-streaming movies were providing really no value to us.”


Original TV programming will continue, with projects in the works including a Harry Potter live-action series and a Sherlock Holmes TV franchise with Robert Downey Jr. attached as an executive producer, as well as the highly anticipated next seasons of House of the Dragon and The White Lotus.

But for those only interested in watching Chip and Joanna Gaines’ Magnolia Network or shows from the 90 Day Fiancé universe, fret not: Discovery+ will remain as a standalone service, even as its programs are added to the Max service, thanks to the lower-cost service’s low churn and profitability. If anything, Zaslav said during the earnings call that the addition of Discovery+ content onto Max will help convert some of those existing Discovery+ subscribers into Max subscribers. “Our strategy is no sub left behind,” he said. “We have profitable subscribers that are very happy with the product offering of Discovery+, [so] why would we shut that off?”

Ahead of April 12, lingering questions include how WBD will price out its subscription tiers, which begin at $9.99 for the ad-supported tier and $15.99 for ad free for the current iteration of HBO Max. While the $15.99 monthly price point is on par with Netflix, HBO Max’s ad-supported tier is currently, at $9.99 a month, the highest of all the ad-supported subscriptions offered by Netflix, Disney+, Hulu, Paramount+ and Peacock.

WBD most recently reported having 96.1 million streaming subscribers, with a relaunch being a key next step toward growth. “The relaunch or the launch of a combined product is absolutely critical because for the first time, we’re going to be able to put all the content together,” stated CFO Gunnar Wiedenfels at a Morgan Stanley investor event in March. “We believe that that’s going to have positive impacts on engagement, on churn, on subscriber acquisition.” The exec also stated earlier in the year on the earnings call that the relaunch of the combined service would be bolstered by an “increase in marketing spend support and premier content launches.”

Following next week’s preview of the updated streaming service, the company will hold its annual stockholder meeting in May.

 

[wabbott]

https://www.latimes.com/entertainment-arts/business/story/2023-04-10/la-et-ct-studios-upheaval

Studios face turmoil and strife amid WGA negotiations - Los Angeles Times
Stephen Battaglio, Anousha Sakoui, Wendy Lee
4/10/23

Ask a Hollywood studio executive about the state of the entertainment business these days, and many will say, “Don’t ask.”

Firms such as Netflix, Warner Bros. Discovery and Disney have laid off hundreds of employees. Companies are under pressure from Wall Street to cut costs and deliver reliable profits while they make risky investments in streaming. Meanwhile, talk of a recession percolates every day.

The uncertain economic landscape is complicating the already-fraught contract negotiations between the Writers Guild of America and film and TV studios as they try to hammer out a new deal this month.

Failure to reach a new agreement could lead to the first strike by Hollywood writers since the disruptive work stoppage that hit the industry in 2007-2008.

“It’s going to be a tough environment for them to come to a deal quickly because of the dynamics with studios having to make some cost cuts,” said David Smith, a professor of economics at Pepperdine University’s Graziadio Business School. “We’re still in this uncertain period about where digital streaming is going to end up.”

Adding to the complexities, the makeup of the trade group representing the major film and TV studios and networks — the Alliance of Motion Picture and Television Producers, or AMPTP — has changed dramatically since the last WGA strike in 2007-2008. With tech giants now in the mix, some members have competing priorities that could affect their willingness to hold the line as screenwriters demand more money from their work on streaming series, according to people familiar with the talks who were not authorized to speak publicly.

Deep-pocketed Amazon and Apple, for example, are looking to keep their relatively new film and TV operations humming to fuel their streaming businesses but are less accustomed to dealings with the entertainment unions than the more traditional members, like Warner Bros. and Disney.

Others close to the negotiations push back on the notion that the alliance is fractured. They note that despite their divergent business interests, all the major studios — with the exception of Sony — have a shared interest in growing their burgeoning streaming businesses.

“I do think there’s an interest on the part of streaming companies to continue to make gains in this industry,” Smith said. “They probably don’t want their momentum to stop with an extended work stoppage. And they’re flush with cash so they might be willing to give up a little bit more to the writers.”

The AMPTP declined to comment for this story.

For their part, the writers are seeking improvements such as a minimum number of scribes hired for TV shows, taking aim at the so-called “mini-rooms” becoming increasingly common in the streaming era. They also want an increase in residuals for streaming series, many of which do not benefit from the “back end” of traditional television, in which shows earn money from syndicated sales to TV stations and cable networks.

The WGA and AMPTP began talks on March 20 to come up with a deal before the current contract expires May 1. The WGA has asked its 11,500 members to vote to authorize a strike, a standard procedure as the union looks for leverage in the talks.

The union has dismissed talk of the studios’ economic hardship as a convenient, frequently cited excuse to justify not paying writers what they deserve.

“Every three years, writers are told why the current conditions make addressing their issues untenable,” the WGA said in a statement to The Times. “The current conditions now are that the studios remain extremely profitable, while writers are losing ground. In this negotiation, writers are demanding protections that address all the ways the studios have cut pay, squeezed more work into less time or onto fewer writers, and demanded more work for free.”

The guild argues that many of the studios’ wounds are self-inflicted. The rapid rise of Netflix sent companies such as Comcast, Paramount, Disney and others scrambling to catch up with heavy investments in streaming. Recently, that shift has come under the unforgiving glare of Wall Street analysts after Netflix’s once-torrid subscriber growth sputtered.

The writers say that’s not their problem.

“It’s not for writers to pay for the poor decision-making of companies who decide to pursue expensive mergers or take on large amounts of debt,” said the WGA’s chief negotiator, Ellen Stutzman. “Those are short-term things that will change and we have to negotiate a contract that will live on for decades.”

A WGA analysis said entertainment operating profits for AMPTP members rose from $5 billion in 2000 to $28 billion in 2021, which is down from $30 billion in 2019. Studio revenue has risen from $155 billion in 2013 to more than $220 billion in 2022. And spending on original content for streaming is expected to reach $19 billion this year — nearly four times the spending level in 2019.

The union’s fighting words are one reason why the studios are preparing for the worst. Producers say privately that the market for scripted programming has already softened because networks don’t want to tie up money in projects that could be hobbled by a lengthy strike.

Studios are terminating projects that have been in active development or are about to commence production, said Elsa Ramo, managing partner of entertainment law firm Ramo Law PC.

In the run-up to the 2007-2008 strike, studios and producers stockpiled scripts so they’d have something to run. Companies are once again hedging against a potential work stoppage by producing additional episodes this year and banking them for later.

But buyers may be less panicked this time around because of changes in how consumers watch in the streaming era.
While big home-grown hits such “Stranger Things” on Netflix and Amazon’s “The Marvelous Mrs. Maisel” get streaming customers into the tent, once inside they discover a massive catalog of older shows providing thousands of hours of programming. It’s how decades-old, long-running series such as “Friends,” “The Office” and “Seinfeld” became hot again.

Consumers may not feel the impact of a strike until the traditional television season begins in the fall and they don’t find new episodes of their favorite shows.

Amazon and Apple are reportedly set to each spend $1 billion annually to produce movies for theatrical release. (It was the deep pockets of tech players that drove Rupert Murdoch to sell his TV and movie production assets to Disney in 2019.)

The ripple effects of a strike would be significant. Without writers, thousands of other employees involved in other aspects of TV and movie production will have to sit and wait for the two sides to come to an agreement.

But there are other economic reasons why the studios would be willing to sustain a strike. If a job action lasts several months, studios can cancel high-priced contracts with writers citing circumstances beyond their control, as many of them have so-called force majeure clauses.

“No one will say it,” said one producer and former network executive, who spoke on condition of anonymity. “But I think they’re secretly happy if there is a strike because it allows them to get out of some of their overall deals.”

 

[wabbott]

https://www.vanityfair.com/hollywood/2023/04/hollywood-writers-strike-2023-explained

A Writers’ Strike Might Grind Hollywood to a Halt: What You Need to Know
Why film and TV scribes are preparing to stop work—and how a potential strike could change everything.
By Natalie Jarvey
April 11, 2023

Streaming didn’t just revolutionize the way we watch television: it completely upended how the people who make our favorite programming get paid. Writers, in particular, have felt the squeeze brought about by streaming’s shorter seasons, longer production times, and shrinking residual checks. “Writers are finding their work devalued in every part of the business,” the unions that represent some 11,000 Hollywood scribes wrote in a March report, which revealed that the weekly median pay for a TV writer-producer has declined 4% over the last decade.

Now, the Writers Guild of America—still basking in the glow of a 2021 victory against the high-powered Hollywood talent agencies—is gearing up for a fight. The WGA’s three-year contract with the Alliance of Motion Picture and Television Producers—the trade association that represents Hollywood studios, including Disney, Netflix, and Warner Bros. Discovery—is set to expire on May 1. If the two sides can’t agree on new terms, Hollywood could see its first writers’ strike in 15 years.

“What we’re asking isn’t absurd,” says Brittani Nichols, a writer and producer for ABC sitcom Abbott Elementary. “It’s just to be treated fairly and to be able to make a career out of being a television writer, because that is being stripped away from us right now.”

Talks began in late March. In what was perhaps the first indication that they weren’t going well, the WGA sent a letter to its members last Monday calling for a strike authorization vote. “The studios need to respond to the crisis writers face,” the Los Angeles–based WGA West said in a statement released via Twitter. “WGA members must demonstrate our willingness to fight for the contract writers need and deserve by supporting a strike authorization vote.”
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Writers can’t strike until their existing contract expires, but calling for a vote—which will begin Tuesday—is the equivalent of assembling the troops. If writers come down decisively in favor of a strike, it could give the WGA additional leverage in its ongoing negotiations with the studios.

Among those who immediately closed ranks was Everything Everywhere All at Once codirector Daniel Kwan. “It’s about writers getting their fair share,” the newly minted multiple Oscar winner tweeted as he called for his colleagues to vote yes for strike authorization. “It’s about maintaining a healthy middle/working class of writers in our industry. It’s about showing our collective strength as new tech threatens to take away our leverage.”

There’s still time for the writers and studios to work out their differences—just like they did in 2017—but if talks stall, there’s a good chance that writers will put down their pens and head to the picket line. Below, Vanity Fair breaks down what you need to know about the potential work stoppage.

What Do Writers Want?

More money. But, of course, it’s more nuanced than that. TV writers (and to some extent movie screenwriters too) feel like they’ve been sidelined while streamers and studios have enjoyed the spoils of the streaming wars. Last year, Hollywood released nearly 600 original scripted shows—the most ever, or at least the most since John Landgraf, the FX chairman and ”Peak TV” soothsayer, began keeping track. But writers, who are typically paid per episode, have seen their earnings decimated by shorter season orders (typically just 6–12, episodes compared to the 22–24 episode orders of yore). Longer production times—consider the 20-month gap between the second and third seasons of Stranger Things—also mean they have to stretch their pay further. Outside of a handful of bold-named writer-producers—like Shonda Rhimes, Greg Berlanti, and Ryan Murphy—stories abound about writers who are barely scraping by.

In early March, WGA members approved a list of general objectives—called a Pattern of Demands—that includes standard negotiating points like higher minimum compensation and increased contributions to healthcare and retirement funds. They are also looking to address some streaming-specific frustrations, including standardizing pay for a screenwriter regardless of whether a film is released theatrically or on a streaming service.
One particularly onerous streaming-era invention that appears in the Pattern of Demands is the “mini-room”—a writers’ room with only a handful of scribes that’s convened for a few weeks to develop story ideas before production officially begins. Mini-rooms can be cheaper for the studio but, as Vanity Fair noted when they first began cropping up some five-plus years ago, have turned a formerly lucrative career path into essentially a gig-economy job.

What Can We Learn From Past Negotiations?

The WGA is a formidable opponent with real momentum on its side. In 2019, it took on Hollywood’s powerful talent agencies and won. Writers were also prepared to strike in 2017 until they landed an eleventh hour deal that won them a 15% increase in pay-TV residuals and job protection for new parents.

Hollywood hasn’t faced the reality of a writers’ strike since 2007, when around 12,000 scribes headed to the picket lines in a work stoppage that lasted 100 days. At issue was how writers were being compensated when someone went to download an episode of, say, CSI from iTunes for $1.99.

Streaming was in its infancy then, but creatives were concerned that the studios would cut them out of the profits just as they had tried to do when home video sales first took off. “We absolutely didn’t get everything we wanted, but getting the jurisdiction in new media completely changed the way writers, actors, directors and the entire industry are employed,” Patric Verrone, president of WGA West during the 2007 strike, told The Hollywood Reporter several years ago. “If we hadn’t done that, Netflix wouldn’t be what it is today, which is the company that employs something like a third of our members now.”

Today’s negotiations feel just as existential. Streaming is now the dominant means of distributing entertainment to consumers, and as writers face the very real possibility that peak TV is coming to an end, they’re looking for ways to make these jobs sustainable. But the WGA is also bargaining without its controversial, yet effective lead negotiator for the first time since 2006. David Young, who served as executive director for WGA West during the 2007 strike and the more recent fight with the agencies, announced in February that he was taking a medical leave. Young protégé Ellen Stutzman has taken over as chief negotiator for the current round of talks with the AMPTP.

Will Writers Really Strike?

Vanity Fair has talked to dozens of TV-industry workers over the last few weeks, and everyone has a different opinion. Though many writers say they don’t want to strike, they’re prepared to. The rest of Hollywood, meanwhile, is acting as though a strike is likely. A source says a flurry of mini-rooms began to meet toward the end of last year as studios look to stockpile scripts. Meanwhile, dealmakers are rushing to make sure contracts are signed.

“We’re all planning as if the strike is going to occur,” says Elsa Ramo, who works with independent film and TV producers, financiers, and creatives as managing partner of Hollywood law firm Ramo Law. “Our perspective is, how do we continue to get things made if and when the strike happens?”

Complicating matters is the precarious position the studios and streamers find themselves in as they negotiate with the writers. Nearly every major entertainment conglomerate is currently cutting back on spending, laying off staff as they attempt to turn their expensive streaming gambits into profitable businesses. For the last few years, Wall Street turned a blind eye to the billions that companies like Disney, Warner Bros. Discovery, and NBCUniversal sunk into Netflix competitors—but now the bill has come due. That might make it harder for the writers to win allies.

What Happens Next?

Before the writers can strike, they must vote to authorize a work stoppage. WGA has called for a strike authorization vote to be conducted from April 11 to April 17. A majority vote in favor of a strike would allow union leaders to execute one should they not have a new contract in place by the time the existing contract expires on May 1.

If negotiations stall and a strike does take place, expect writers to put down their pens within a matter of days. In 2007, writers headed to picket lines outside the major LA studios on the Monday after their contract expired. But that doesn’t mean all productions would immediately grind to a halt. Movies with completed screenplays would likely continue to film, and some shows would probably remain in production until they run out of scripts. A strike would continue until both parties agree on a new contract. The longest WGA strike on record lasted 153 days in 1988.
The situation could worsen if the Directors Guild of America, which is set to begin negotiations with studios in May, follows the WGA with its own strike when its contract expires at the end of June.

What Would a Strike Mean for My Favorite Show?

Any strike would cripple Hollywood for a time, though how acute the pain would be depends on how long the work stoppage lasts. Many movies and streaming TV shows are in production well before they make their way to screens big and small, meaning viewers likely wouldn’t notice a clog in Hollywood’s content pipeline. But late night shows might have to go dark for a time, and broadcast shows might have to delay their return to airwaves. One casualty of the 2007 writers strike was the 65th Golden Globes, which hosted a press conference instead of its usual glitzy broadcast.

Some writers are worried that studios could use the strike as an opportunity to terminate the pricey overall deals they signed with creatives at the height of the streaming wars. Those deals—in which a studio essentially pays a writer or producer a salary to make programming it can sell to a network or streamer—can be restrictive, but also guarantee a steady income. The studios set a precedent in 2007 when they used the strike as cover to end more than three dozen overall deals. Now these deals are even more prevalent, though not all of them are as fruitful as the studios would like.

Hollywood’s more enterprising workers might also find opportunity. Streamers with robust international operations will also be able to lean on programming from overseas. Out-of-work writers might find more time to work on spec scripts and novels—and perhaps the faltering podcast industry will get a much-needed boost from a surge in audio dramas.

In truth, the ripple effects of a strike might not be felt for years. The last one, after all, led to an unscripted television boom, including a celebrity-centric revival of flagging Donald Trump–hosted reality competition The Apprentice. We all know how that ended.

 

[New Mouse]

They are really trying to kill off movie theaters!

 

[wabbott]

They are really trying to kill off movie theaters!

IIRC, when TV came along, the same thing was said. No doubt it changed things, but the Big Screen survived. Probably will survive this, too. Movies on the big screen is still one of the best deals there is for a cheap date for couples, lol.

"I am big! It's the pictures that got small."

 

[john7994]

IIRC, when TV came along, the same thing was said. No doubt it changed things, but the Big Screen survived. Probably will survive this, too. Movies on the big screen is still one of the best deals there is for a cheap date for couples, lol.

"I am big! It's the pictures that got small."

"No one ever leaves a star. That's what makes one a star."

 

[Disney Bobby]

I mean, you are 80. Move on and let the next generation have a chance.

He did. What it got us is Michael Douglas (net worth $350 million) plugging socialism in a subpar Ant Man movie. Because, you know, there is nothing quite as compelling as a someone who is worth 1/3rd of a billion dollars telling us how we should aspire to be like ants.

 

[wabbott]

https://www.hollywoodreporter.com/b...f-disney-entertainment-television-1235372645/

Dana Walden Taps Jen Reberger as HR Chief for Disney Entertainment Television
The executive succeeds Sonia Coleman, who was elevated to oversee HR for all of Disney last month.
April 12, 2023 2:00pm - By Alex Weprin

Disney Entertainment co-chairman Dana Walden is turning to a trusted hand to lead human resources functions for the Disney Entertainment Television group.

Walden has tapped Jen Reberger to serve as senior VP of HR for the division, which includes Disney’s TV studios, the ABC broadcast network, and cable channels like FX, Disney Channel and Nat Geo. Reberger succeeds Sonia Coleman, who last month was elevated to lead all HR functions for The Walt Disney Co.

“In her role, Jen will be responsible for all HR business support; diversity, equity and inclusion efforts; employee development and engagement; recruitment and compensation; talent acquisition; learning and talent development; and employee relations for our full portfolio of brands and groups,” Walden wrote in a memo to staff Wednesday afternoon. “As Sonia transitions into her new position, our goal was to find someone who could quickly step into her old role, working with all of us, and I have no doubt that Jen is that person. She is accustomed to our business and how we function, and many of you already have a relationship with her. I’m confident that Jen will continue to build on the foundation laid during her previous tenure here and be instrumental in helping pave an exciting path forward.”

Reberger joins Disney from Medtronic, where she was an HR VP. Before that she spent 15 years at Disney in a number of HR roles. Her first day back at the company is May 1.

Walden’s note is below.

Team,
Sonia Coleman and I are very happy to share that we have a familiar face returning to our organization. Jen Reberger is joining my leadership team as senior vice president of Human Resources for Disney Entertainment Television and will be based out of our Burbank offices. Her first day will be May 1.

Jen is an extremely gifted executive who spent 15 years at Disney prior to taking a short break. She is assuming the role previously held by Sonia, who, as you know, was named senior executive vice president and chief human resources officer for TWDC last month. In her role, Jen will be responsible for all HR business support; diversity, equity and inclusion efforts; employee development and engagement; recruitment and compensation; talent acquisition; learning and talent development; and employee relations for our full portfolio of brands and groups.

As Sonia transitions into her new position, our goal was to find someone who could quickly step into her old role, working with all of us, and I have no doubt that Jen is that person. She is accustomed to our business and how we function, and many of you already have a relationship with her. I’m confident that Jen will continue to build on the foundation laid during her previous tenure here and be instrumental in helping pave an exciting path forward.

Jen rejoins us from Medtronic, where she served as vice president of Human Resources of Global Functions, overseeing HR strategy for its corporate divisions. At Disney, she rose through the ranks, serving in human resources and DE&I leadership roles across multiple businesses, spanning consumer products, digital games, television and streaming content.

Jen’s experience, knowledge and passion for fostering a culture of excellence and collaboration will be invaluable to our organization. Please join me in welcoming her back to the company. I am so glad to have Jen on our team.

Warmest regards,
Dana

 

[wabbott]

https://deadline.com/2023/04/warner...ers-for-new-max-streaming-service-1235323018/

Warner Bros Discovery Unveils 3 Price Tiers For New Max Streaming Service
By Jill Goldsmith, Dade Hayes
April 12, 2023 11:02am PDT

Warner Bros. Discovery unveiled three tiers for its new Max service today. The pricing keeps Max in line with HBO Max, and at the top end of the entertainment streaming spectrum. A price hike several months ago by HBO Max made it the most expensive service among major streamers, and the new set of plans will keep it just ahead of Netflix’s most popular U.S. plan, which now costst $15.49 a month.

The top-end plan also gives Max 4K functionality and up to four concurrent log-ins, both increasingly popular options for discerning streaming consumers.

The plans are:

Max Ad Light for $9.99 a month or $99.99 a year. Two concurrent streams.
Max Ad Free for $15.99 a month, or $149.99 a year. Two concurrent streams.
Max Ultimate Ad Free for $19.99 a month, or $199.99 a year. Four concurrent streams.

Existing HBO Max subscribers will have access to Max at the same price, and will still have access to their current plan features for at least six months following Max launch. HBO Max subscriber profiles, setting, watch history, “continue watching,’ and ‘my list’ functions will also migrate so viewers can pick up streaming where they left off.

Max. which WBD is calling Max “the one to watch,” launches May 23. It will house HBO originals, Warner Bros. films, Max Originals, the DC universe, the Wizarding World of Harry Potter, kids content, and Discovery content across food, home, reality, lifestyle and documentaries from HGTV, Food Network, Discovery Channel, TLC and ID. It will feature an average of more than 40 new titles and seasons every month.

“This new brand signals an important change from two narrower products HBO Max and Discovery+, to our broader content offering and consumer proposition. While each product offered something for some people, Max will have broad array of quality choices for everybody,” said JB Perette, CEO of WBD’s Global Streaming &. Games.

Perette also ticked off a list of changes to drive Max engagement, including a simpler user interface, a new content navigation menu, and a curation of top brands and genre hubs. Other enhancements for advertisers will help monetize the content. For most users, the HBO Max app will automatically update to the new Max app. Some may need to be prompted to download Max app.

Casey Bloys, CEO of HBO Max and Max content, called Max a wide-ranging mosaic of content that will be unmatched in the breadth, reach and excellence of its offering.”

As the company previously announced, Discovery+ will continue to operate as a standalone service and “will be unaffected by all these changes.” Perrette called Discovery+ a “profitable service” with a sizeable user base. It costs $4.99 with ads, and $6.99 ad light.

 

[wabbott]

https://www.investors.com/news/dis-...disney-vs-its-brand-new-rival-max/?src=A00220

DIS Stock Chases Netflix Higher As Analyst Sees This Edge For Disney+ Vs. Its Brand-New Rival Max
APARNA NARAYANAN
01:22 PM ET 04/13/2023

Disney (DIS) beats Warner Bros. Discovery (WBD) with its clearly differentiated video streaming services, a Wall Street analyst said Thursday. Disney stock helped drive the Dow's advance on Thursday. Meanwhile, Netflix (NFLX) ran near the top of the S&P 500 and Nasdaq 100.

Needham analyst Laura Martin attended Warner Bros.' Max unveiling event Wednesday and concluded that its execution is lacking.

Warner Bros.' two streaming services — Discovery+ and the brand-new Max — are not properly differentiated, the analyst said. Max also includes Discovery+ content.

In contrast, Disney has three streaming services — Disney+, Hulu and ESPN+ — but each has a clear target audience, Martin said. Netflix is concentrated into a single streaming service.

Warner Bros. unveiled Max, its enhanced streaming service, Wednesday. Max will launch in the U.S. on May 23.

Shares of Disney rallied 2.4% to 100.24 on the stock market today, helping to power the Dow Jones' advance after another report showed cooling inflation. DIS stock fell 2.5% Wednesday amid the Max unveiling event, falling further below the 50- and 200-day moving averages.

Disney stock is fighting to retake technical support, lagging well below a 118.28 buy point in a cup base that's part of a larger consolidation.

Netflix rallied 4% Thursday, fast approaching a 349.90 entry in a cup-with-handle base.

WBD stock also rallied Thursday, paring its early 1.5% gain to 14.27. Shares are consolidating with a 16.35 buy point, the MarketSmith chart shows. Warner Bros. Discovery debuted last year.

Martin also took issue with other parts of Warner Bros.' Max streaming video strategy — including the decision to delete "HBO" from the name.

"'Max' means nothing (i.e., requires more marketing spending) while 'HBO' spent hundreds of millions of dollars over decades to create a brand that meant best-in-class TV," Martin said.

Overall, the analyst deemed Disney and Amazon (AMZN) Prime Video the winners, beating both Warner Bros. and Netflix.

This is due to the better OTT (over-the-top) strategy, and deeper pockets, of the former two, Martin said.

 

[wabbott]

https://time.com/6269006/bob-iger-interview-time100/

Bob Iger on Ron DeSantis, Gambling, and Making Job Cuts at Disney
By Belinda Luscombe
4/13/23

Disney’s old and then new again CEO Bob Iger was early for his 2023 TIME100 cover shoot on a soundstage at the studio lot, as he pretty much is for all his appointments every day. And he managed the photo session as carefully as he manages Disney’s many intellectual properties—from Thor to Mickey—making sure he understood what photographer Paola Kudacki wanted while also ensuring it aligned with his own aims of not looking awkward.

That was perhaps more impressive since Iger, 72, is already in the awkward position of stepping back in to head the company after his handpicked successor, Bob Chapek, lasted fewer than three years. Chapek’s dismissal came on the heels of a meeting in which he could not find the appropriately sober-but-optimistic tone to reveal to shareholders that Disney had lost billions more than expected on its new streaming service. It also came on the heels of a political feud in Florida and internal uproar over redistribution of power within the studio.
Biden's Visit to Northern Ireland Highlights the Complicated Legacy of the Good Friday Agreement
Posted 1 Day Ago

One the day of the shoot, Iger was fresh off a recent round of victories. The Disney stock price was up 9% since he took back the CEO reins, after falling 44% in the 12 months prior. He’d effected a round of cuts whose victims included Ike Perlmutter, the executive who sold him Marvel, one of his most valuable purchases, but who had recently become a thorn in his side. And Disney was making headlines for out-maneuvering Florida Governor Ron DeSantis, who had been trying to limit the media giant’s power in his state by appointing new officials to a local council that Disney formerly ran, only to find the council had previously divested itself of any power. All of that and it wasn’t even 9 a.m.

Iger sat down for an interview about how he is managing this very different phase of Disney’s journey, where he gets advice, and if he feels influential.

How surprised are you to find yourself back at the helm of Disney? ​

Very, very surprised. It’s not something I anticipated doing. But I’m certainly happy to be here.

What do you see as your prime responsibility at the company now?​

I was brought back for a reason. The company had gone through a very difficult period, exacerbated by a global pandemic. And more than anything, the company needed stability, needed to establish a set of priorities and focus on them. The only way you end up getting to success is by deciding what the opportunities are, and then organizing your people and your company to go after them.

A lot of media companies are going through similar turbulent, resource reallocation processes as Disney is right now. Do you feel like that you’re being watched to see how you handle them? ​

Yes, I do. There’s no such thing as not being watched in this job. And while I’m aware of that, it doesn’t have much of an impact on how I lead or behave.

Is there anybody to whom you’re looking who’s done a similar thing?​

The person that I think most of, that I was fortunate enough to have observed very closely, is Steve Jobs. He was brought back to a company that he had founded—very different circumstances. But speaking with him when I did, and reflecting on what his experiences were—I’ve taken a lot from that. One is when you are brought back, and you agree to come back, you have to do so with unbelievable enthusiasm, and not an ounce of hesitation. And then you have to know very quickly what it is you’re expected to accomplish and what it is you can accomplish. And then go at it with incredible resolve, incredible zeal, and incredible energy.

When you were asked, was yes your immediate answer?​

It was not something I was contemplating. I had been out for about a year, 11 months. The Chairman of the Board of Disney set up a call with me. When I told [my wife Willow Bay] about the call, she immediately questioned what it would be about. I think she actually said, ‘They’re probably not going to ask you back.’ And I said, ‘Well, what if they do?’ And she immediately responded, ‘Yes.’ I have such respect for her instinct, that when the call came and I was asked by the chairman of our board to come back, I responded, yes without any hesitation. There are certain things that I felt I needed to stipulate. But it was a quick decision.

How much of the way that you’re navigating these challenges now is instinctual to you and how much of it is experience? ​

It’s definitely both. I was the CEO of the company for 15 years and the executive chairman for two. I was also [COO] for five years. I’m also well aware that today’s environment is different. Even in the year that I was out, things have shifted. You have to be capable of adapting quickly, which is something you learn leading over time.

One of the tasks in front of you is to save $5.5 billion in Disney’s annual budget. Is there any part of that process that can be creative? ​

The $5.5 billion was a number that we came up with that we thought was not only achievable, but that was necessary to the bottom line success of the company. While reducing costs is not one’s favorite thing to do, it is a necessary thing to do often, particularly as conditions change. And in many respects, it does force a discipline and a focus, and maybe a sense of urgency, and I think that can result in, I wouldn’t say necessarily creativity as much as a resourcefulness and focus on what’s possible, and what’s necessary.

Your reorganization of the company puts a lot of control back in the hands of creators, which has been your signature management style. What makes you think that creative people are good at figuring out such things as distribution channels and ad sales? ​

There’s nothing I’m more sure about than the decision that we made and the need to tie accountability—and to some extent, a degree of control—over the business side of our business with the creative side of our business. If you are the manager of creativity, then it is absolutely necessary that you have complete accountability for the results of the creativity that you’re managing, not just in terms of revenue generation, but in terms of how much you spend on what you create, how much you spend to bring it to market—not just distribution costs, but marketing costs. One of the things that is most important for those managing creativity is a very, very defined, and very, very tangible feedback loop.

You made some news recently by firing several executives, including the guy who sold you Marvel, Ike Perlmutter. Do you handle those personally?​

There are times I handle it personally and there are times that I don’t. I’d rather not get into details about this one. This was a necessary step in the direction of us creating a more efficient company. There was redundancy specific to the way Marvel was being managed.

So the campaign that Perlmutter championed to get [activist shareholder] Nelson Peltz on the board didn’t play into the decision at all? ​

This decision would have been made regardless of that.

One of the biggest decisions you’re facing is the fate of Hulu, whether Disney will buy it out. There’s a deadline approaching. What are the considerations that you’re thinking about as you make that decision? ​

We own about two thirds of Hulu, and Comcast owns the other piece, and they actually have the right to put their piece to us, in other words, force us to buy them out. If they decide to do that, then we have no choice but to buy them out.

One of the ways that Disney is trying to maximize its resources is to increase the longevity of its franchises. How do you not kill the goose that lays the golden egg? ​

The answer is really to continue to fuel it with great creativity, particularly storytelling, to not underinvest, actually, in those. And to respect the past, but also be completely capable of and willing to be relevant by some degree of modernization; understanding that the world has changed and while certain stories stand the test of time, others don’t. You have to be incredibly adept at being able to read the read the room, so to speak, or the world, in order to maintain brand relevance, character relevance, franchise relevance.

In a period of wanting to shrink expenditures, you’re still talking about ambitious spending on creativity? ​

If you look at the reductions that we’re making, they’re designed to invest the right amount of money in great creativity. The more efficient you are at running a company, the more you can spend on what is the most necessary. In this case, it’s quality and creativity.

What are the influences on how you curate Disney’s output? ​

We want to continue to make programs that don’t necessarily fit into one of our core brands, but we probably should make less of them. I think actually curation is a good thing, because it probably forces more discipline on us in terms of quality. The more you make, typically, you dilute quality. And we’re looking to do the opposite.

So, fewer, bigger things? ​

Not necessarily bigger. Fewer, better.

Disney and TIME are both 100 year old companies. You’ve worked for Disney for a long time. Do you see staying with one company for a whole career as an option for people in the future, or is business changing? ​

I’m now pausing for a moment to realize that I’ve worked at this company for half of its existence, which is pretty crazy. I was extremely fortunate that I started working at a company and in a business that experienced phenomenal growth and expansion over the course of the five decades that I worked in it. I didn’t have to leave a company or even an industry to get more opportunities. So I think it’s not about whether whether a person commits to staying for a long period of time or not, it’s whether the company they work for and the business that they’re in, provide them with the kind of opportunities they expected for their own for themselves for their lives.

Can you change a company and keep the values?​

I actually think that if you study great companies over time and you try to figure out why some companies stand the test of time and others do not, you would quickly conclude that most companies fade away because they’ve abandoned the core values that created the company in the first place. That, in the interest of staying relevant, they distance themselves from the essence of what they were. There is a way to completely adhere to those same values but to present them to the world to your customers, and to your employees in much more relevant ways.

Speaking of values, I’m interested that ESPN invested $250 million in DraftKings, the sports betting outfit, while Disney decided to take Marvel characters off poker machines. Is gambling something that Disney is interested in investing in?​

Not really. ESPN is interested in figuring out a way to enable its consumers, who are watching sports on television or mobile devices or whatever, to participate in some form of sports betting without having to leave the experience completely. It’s basically trying to increase engagement.

You don’t seem that thrilled about it. ​

I was probably on the more conservative side about this for a long time. But I’ve changed because I think the acceptance of sports betting has grown significantly. And my desire is to see that the company continues to serve its consumers well, without us really, I think, distancing ourselves from values, because we’re not actually causing the bets to be made. We’re just enabling people to link to companies that do that. I don’t think it’s an issue.

What did you do with your first paycheck?​

You have to understand that I started in 1974. My salary was I think, $150 a week, and I got a check every two weeks. I got what would have been a $300 check. My rent in New York City was $300 a month. So one of my checks always paid my rent. I had to live on the other. I have no idea what I did with it, except that I spent it because I had to spend every single cent that I made in order to live.

If you could influence went to one person to do one thing, what would that be?​

I would try to influence myself to relax a little bit more.

I cannot let this interview finish without asking you about the situation in Florida. Did you checkmate Ron DeSantis?​

Disney World opened just over 50 years ago. It was the vision and the dream of Walt Disney, probably the most ambitious thing he ever did—turning swampland in Central Florida into a business that employs over 75,000 people, that is visited by tens of millions of people every year, that is a major tourist destination in the United States, and for the state of Florida, that creates huge value for our company and its employees, and for the state of Florida itself. Our sole goal in Florida is to continue creating that value for all those constituencies. All we want is a relationship with the state that enables us to continue to do that. We have the wherewithal and we have the desire to continue to invest there to grow that business so that we can hire more people so that we can increase our attendance, and so that we can basically increase more value for the Walt Disney Company and for the state of Florida. It’s that simple.

Usually, you’re very much a let’s-sit-down-and-get-past-our differences guy, and much less a let’s-go-to-the-mattresses guy. Is there no trying to meet with the governor?​

I do not view this as a going-to-mattresses situation for us. If the governor of Florida wants to meet with me to discuss all of this, of course, I would be glad to do that. You know, I’m one that typically has respected our elected officials and the responsibility that they have, and there would be no reason why I wouldn’t do that.

One of your tasks now is to find a new Disney CEO. How will the search be different?​

Well, it’s not only one of my tasks; it’s the primary priority of the board. They’re meeting on a regular basis, defining what qualities we’re looking for and what people we might want to consider. Given the events of the last couple of years, it’s not only a priority, but will get more time, more attention, more focus than it did before. We’ve always viewed it as an important decision. But given the fact that I’m not here forever and and we had some difficulties these last couple of years, it’s getting more attention than than it has in the past.

Correction, April 13

The original version of this story misstated one of Bob Iger’s roles during his tenure at Disney. He was COO for 5 years, not CFO.

 

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https://finance.yahoo.com/video/warner-bros-discovery-traditional-networks-204344771.html

Warner Bros. Discovery’s traditional networks ‘seeing degree of pressure’ due to streaming: Analyst
Thu, April 13, 2023 at 3:43 PM CDT

Goldman Sachs Managing Director Brett Feldman joins Yahoo Finance Live to discuss the streaming industry, including the role sports play in services' success and what's next for Disney and Warner Bros. Discovery.

Video Transcript​

DAVE BRIGGS: All right, the NBA playoffs are set to tip off this weekend after a regular season that broke some records. The league announcing this week it set new records for total and average attendance at games this season while selling out a record 791 games. The NBA hoping to carry that momentum into strong viewership numbers on ESPN and TNT this spring.

Joining us now for what the NBA's success could mean for Warner Brothers Discovery and the overall outlook for the company amid the launch of new streaming platform Max is Brett Feldman, Goldman Sachs managing director. Good to see you, my friend. So curious with this new deal coming up, and obviously, Warner Brothers Discovery looks like a front runner with Disney. But how does the entrance of Amazon and Apple into the sports streaming world raise the price, or at least complicate the matter, for two companies that are in relative cutback mode?

BRETT FELDMAN: Well, thanks for having me here. It's great to be on the show. It's really a question about competition. You had the word up there, streaming wars. Investors have been talking about streaming being a war for a long time. And really what the war is about is engagement. You're trying to get your consumers to sign up for your service and to stay with your service because when you have a cable or a satellite package, you pay for it as if it's a utility even if you're not technically in a contract. But you can toggle in and out of your streaming product any time you want.

And I really think that yesterday's event, the Warner Brothers press event to announce a new Max product, was really them trying to show the market that they think they're building a streaming product that's going to create that level of engagement so that they can get to profitability over time.

RACHELLE AKUFFO: And so in terms of timelines then, when you look at what we're seeing with NBA attendance, how soon will that start translating, I guess, more so when we see the bottom lines for some of these streaming companies?

BRETT FELDMAN: The question is obviously cost. If you look at what's going on with sports rights, the NFL contract that was signed not that long ago is the most recent example of it. These sports rights have been doubling or tripling in value as they go through a renewal cycle. That's exactly why the value of these teams have been going up so much, which you were talking about during the prior segment. Meanwhile, viewers are moving out of the paid TV ecosystem where they've been so much locked into their subscriptions and into an environment where they can toggle in and out, as we just talked about.

So really what companies like Warner or any other traditional media company that has been a partner of the leagues has to do is figure out how to contain that cost because the overall value of the rights are going to keep going up. So they have to ask themselves, does it make sense to pay the full freight to maintain the package of games that I've had all along, or is there some way I can work with the leagues and maybe additional partners to get a contract where it's a manageable cost for me, it brings just enough entertainment, sports entertainment to my viewers, and I can grow and I can make some money?

DAVE BRIGGS: Now it was interesting David Zaslav talking in this presentation about the sports assets they have, which are impressive-- March Madness, we mentioned the NBA, the NHL as well. But they will not be folded into Max, and neither will news, CNN. Why not? And at some point, do you think those are all under that streaming umbrella?

BRETT FELDMAN: Well, really, we don't know. They kind of teased a little bit at the press event, saying that they do expect that they are going to have live news and sports as part of their streaming offering. But to your point, they didn't explicitly say that it was going to be part of Max. They also said we're going to come back and let you know what we're doing in a couple of months.

I think what most investors assumed is that that means they think in a couple of months, they will have resolved their negotiations with the NBA, thereby knowing exactly what they can fold into their streaming service. And whether they're going to bring a separate service to market that is based on live news and sports or maybe whether it's some enhancement to the Max product, we just don't know yet.

RACHELLE AKUFFO: And obviously, a lot of companies have been pulling back on their ad spend. What sort of opportunity does this open up?

BRETT FELDMAN: Well, it's both sides of the coin if you're looking at a Warner Brothers Discovery. So in the case of Warner Brothers Discovery and many other traditional media companies like Paramount and Disney, what that means is that their traditional networks businesses are seeing a degree of pressure on advertising. That's not just because of the economy, but it's also because you are seeing more advertising inventory being made available to them on streaming platforms. In some cases, it's from the exact same companies, meaning Warner is offering advertisements on HBO or Max, as they're now calling it. Disney is now offering advertising slots on Disney+.

And so I think the hope is that if some of the advertising spend that the advertisers are hoping to take away from those traditional channels moves into the streaming platforms, it's going to move on to their platforms. The problem is they're not the only ones out there with advertising. Netflix is out there with advertising. Obviously, there are some mainstays like YouTube and very popular platforms like Roku. So it may not necessarily be that advertising in aggregate is going down. The question is, where is it going?

DAVE BRIGGS: I'd also question about where Disney is going. You are bullish on the company. Stock's up 13% this year. We've heard a lot about Bob Iger's plans to reorganize the company, about some cuts and about siloing off ESPN. But in terms of the catalyst for growth, what is it as you see Disney right now?

BRETT FELDMAN: They got to figure out how to make money in streaming, and they'll tell you that is absolutely the number one priority for Bob Iger and his management team, as he goes through what is supposed to be a two-year stint in the CEO role. They had record losses in their streaming segment in their fiscal fourth quarter, which was two quarters ago. They lost $1 and 1/2 billion on streaming in that quarter alone. They were able to show some progress towards mitigating those losses as they moved into the early part of this fiscal year. And their anticipation is that they're going to break even or make some money at some point next year. But they still have to show investors how they're going to do that.

And inevitably, what that means is that they're going to have to pay close attention to costs. They're also going to have to make sure that they are pricing their product effectively. One of the home runs that we've seen out of Disney very recently was a price increase on Disney+ that they flowed through the service late last year. It was nearly a 40% price increase. It's sort of unprecedented, the extent to which they took up price. And yet, according to the disclosures by management, it had almost no effect on their subscriber trends, meaning that what they've learned is that consumers continue to value their content, just as much in a streaming world as they have in the old world of movies and television.

RACHELLE AKUFFO: Certainly seeing that spread throughout the ecosystem. Very interesting insight there, Brett Feldman. Thank you so much for joining us this afternoon.

BRETT FELDMAN: Great to be here.

 

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https://deadline.com/2023/04/hollywood-strike-streaming-residuals-wga-producers-1235325130/

Are Streaming Residuals Being Slashed? As WGA’s Own Data Shows, It’s Complicated
By David Robb
Labor Editor

April 14, 2023 6:41pm PDT

The issue of residuals is a major focal point for the Writers Guild of America’s negotiations with the Alliance of Motion Picture and Television Producers as the two sides held their latest round of talks on a new contract Friday.

However, it’s clearly a complicated topic — made even more complex when one looks under the hood of the WGA’s own financials.

Last week, the WGA’s Negotiating Committee, in its latest appeal to members to approve a strike authorization, said, “Over the past decade, while our employers have increased their profits by tens of billions, they have embraced business practices that have slashed our compensation and residuals and undermined our working conditions.”

But the WGA West’s latest annual report, released in June, notes that for the fiscal year ended March 31, 2022, total residuals collected by the guild in 2021 hit an “all-time high.” The guild’s annual reports also show that total residuals increased by 48.2% from 2011 to 2021 – from $333 million to $493.6 million.

Charles Slocum, assistant executive director at the WGA West, told Deadline this week that “total residuals are higher because many more projects are being made, and a lot more are in reuse.” The “slashing” of residuals, he said, “is on a per-program basis.”

And the culprit is streaming, where half of all series writers now work.

“In streaming, the companies have not agreed to pay residuals at the same level as broadcast, or the same reward-for-success as they have traditionally paid in broadcast,” he said. “If you write for a streamer, you get two residuals payments – one for domestic streaming and one for foreign streaming. It’s a set amount of money. If it’s a big hit, you do not get paid more residuals in streaming, whereas in the broadcast model, you do because of its success. That’s the sense that residuals were slashed – they have not agreed to a success factor when a program is made for streaming.”

That’s one of the things the guild is seeking in its ongoing negotiations with the AMPTP – a residuals “premium,” as Slocum put it, for successful steaming shows, and a premium for streaming showrunners that reflects their years of experience.

“We’re seeking to raise scale. We’re trying to get more senior writers higher rates,” he said, noting that more showrunners are working at the guild’s minimums than ever before. “You can’t have a showrunner working for the same rate as a story editor. If they are going to pay more experienced writers at minimum, then there has to be a higher minimum for those writers.”

Slocum added: “With more writers working at scale, there needs to be scale for experience. You could look at it as having to account for what was over-scale compensation in the guild’s scale rates, since so many writers are now working at scale.”

The guild has said that “with the rising dominance of streaming – where half of series writers now work – short orders, the separation of writing and production, and the lack of a season calendar have depressed writer pay. At every job title, more writers work at MBA minimum now than a decade ago. In the 2013-14 season, 33% of all TV series writers were paid minimum; now half are working at minimum. Increasing numbers of seasoned writers, including showrunners, are now paid no over-scale premium for their years of experience. Median weekly writer-producer pay has declined 4% over the last decade. Adjusting for inflation, the decline is 23%.”

According to the guild’s latest annual report, “New media, the largest residual category overall, accounted for almost half of the total residuals collected at 45.2%. This is an increase over last year where new media accounted for 36.7% of the total residuals collected.”

The guild’s annual reports also show that total television residuals increased by 59.25% from 2011 to 2021 – from $203.09 million to $323.43 million – while total theatrical film residuals increased by 31% over that same time span, from $129.9 million in 2011 to $170.2 million in 2021.

And while there has certainly been a downward trend in some moribund residuals markets – such as home video, domestic syndication and primetime network – those losses were more than made up for by whopping gains in others. New media reuse of theatrical films, which is now the largest residuals market for movies, increased by 432.7% from 2016 to 2021.

And on the television side, residuals from the reuse in new media of traditional media shows increased by 162.4% from 2016 to 2021, making it by far the largest TV residuals market, accounting for $108.8 million in 2021. And new media reuse of high-budget streaming shows increased a staggering 5855.6% over that same period, accounting for $26.8 million in 2021 and making it the third-largest TV residuals market.

The studios, however, see the guild’s narrative entirely differently. A producer source told Deadline that streaming platforms such as Netflix, Hulu and Disney+ have been “a boon to writers, who are making residuals on series that would otherwise have not continued to earn them income, and they are benefiting from greater opportunity for writing assignments with more producers greenlighting more projects than ever before.”

Noting that English scripted TV volume in streaming increased by more than 35% from the prior broadcast year, the source said that since September 2017, volume of English TV released by streamers has increased by more than 250%.”
“In the not-so-distant past,” the source said, “a series would need to reach five seasons – or the magic 100-episode threshold – to be syndicated off-network, and the residuals earned by writers would not be paid until Year 5. With the emergence of [subscription video-on-demand] platforms, series get a second window after their first season and residuals paid.

“A serialized series would also have limited off-network opportunities and, in most cases, no opportunity at all. With the emergence of SVOD platforms, serialized series thrive and earn residuals that were before nonexistent.

“Canceled, or so-called ‘busted’ series, would fade from existence and that would close the books for writers. With the emergence of SVOD platforms, these series that ran only one, two or three seasons have the opportunity to run on an SVOD series and earn these writers residuals.

“SVOD has also brought an enormous amount of opportunity for work that simply would not be there were it not for these platforms and their huge investments in the original production. The made-for-SVOD product does, in fact, earn significant residuals for WGA members.”

The WGA’s Negotiating Committee, meanwhile, also says that that writers’ compensation has been “slashed” during the past decade, but that depends on which set of data it’s referring to – scale or over-scale. Scale payments – which the guild bargains for – have not been slashed over the past decade, according to the WGA West’s annual reports. But the number of writers receiving over-scale pay has been on the decline, though over-scale pay is not subject to collective bargaining but, rather, is negotiated by writers’ agents or lawyers.

According to the guild’s latest annual report, overall reportable (scale) compensation and employment both were down in 2021. “More than 5,900 writers reported employment in all work areas in 2021, a 6.1% decline from 2020,” the report found. “Total writer earnings reported for dues purposes declined 7.7% to $1.55 billion.” And for “dues purposes” the guild is referring to reportable income, which does not include over-scale pay.

The annual report acknowledges, however, that the 1pandemic played a significant role in those recent declines. “The impact of the Covid-19 pandemic continued into 2021,” the report notes, “with writers’ reported earnings and employment reflecting disruption to the entertainment industry. In all fields, writers reported declines in both employment and earnings.”

Even so, the guild’s annual reports found that WGA West members’ total earnings as reported for dues purposes increased by over 53% from 2011 to 2021, rising from $1.008 billion in 2011 to $1.547 billion in 2021 – a year-to-year increase of $539 million.

WGA West members’ reported television and digital platform earnings, meanwhile, hit $1.128 billion in 2021, which was up over 81% from $620.7 million in television earnings in 2011 – a year-to-year increase of $506.9 million.

WGA West members’ reported film earnings, however, have remained relatively flat, rising from $375.1 million in 2011, to $408.8 million in 2021 – a 9% increase that falls far below the rate of inflation. And during the pandemic, their screen earnings fell by 6.6% in 2020 compared with 2019, and by 13.3% in 2021 compared with 2020.

And yet, despite this overall upward trend in total covered earnings over the past decade, data collected by the guild shows that over-scale payments to writers are on the decline. Slocum said that with so many writers now working at scale, there needs to be a pay “premium” for experienced writers, as well.

Negotiations between the WGA and the AMPTP are expected to kick into high gear after the guild’s members finish voting Monday to approve a strike authorization. The guild’s current contract expires May 1.

 

[wabbott]

https://deadline.com/2023/04/box-office-super-mario-bros-renfield-popes-exorcist-1235325394/

‘Super Mario Bros’ Now At $87M: Best Second Weekend Ever For Animated Movie & Illumination – Saturday PM Box Office
By Anthony D'Alessandro
Editorial Director/Box Office Editor
April 15, 2023 10:29pm PDT

SATURDAY PM: There was a thought for a moment by distribution sources that Super Mario Bros Movie would be front-loaded — during its opening weekend, and in its second weekend. Boy, was that theory wrong. The Illumination/Universal/Nintendo feature take of the hit 1980s videogame is posting the best second weekend ever for an animated movie at the domestic box office with $87M, repping a great -41% hold off of a huge Easter weekend.

That figure defeats the previous second weekend record for an animated movie held by Disney’s Frozen II ($85.9M). More high scores for the Aaron Horvath and Michael Jelenic directed movie: Super Mario Bros. jumped 75% between its second Friday of $22.6M and Saturday of $39.5M. Total running cume by EOD Sunday is $347.8M. While we’ve heard that Warner Bros.’ Evil Dead Rise, another horror film next weekend, is expected to do $15M-$20M+ after its pivot from HBO Max to theatrical (which would be a fantastic result), it’s clear that Super Mario Bros is going to continue to be the big King Koopa of the box office.

Despite the five wide releases this weekend, everyone just wanted to see Super Mario Bros either for the first time, or again as the competition did single digits (check out the chart below).

Among the weekend’s most prolific wide entries, Sony/Screen Gems’ Russell Crowe movie The Pope’s Exorcist looks to notch No. 2 with $8.5M while Universal’s Nicolas Cage vampire movie Renfield will settle in third place with $7.7M. Although the supply of movies is good for exhibition, the reality is that we’re not in a market where Super Mario Bros has raised the water level for all boats, rather the Nintendo movie reps 62% of the weekend’s entire est. $140M box office. Both Pope and Renfield had a mixed reaction on social per RelishMix ahead of the weekend. Let’s face it, they’re niche horror movies, and the going factor for Evil Dead Rise next weekend is that it’s from the beloved Sam Raimi franchise. Remember, Fede Alvarez’s remake of Evil Dead was embraced by horror fans, opening to $25.7M back in 2013 (and finaling at $54.2M and just over $97M off a $17M production cost).

In regards to the response to Pope, RelishMix says moviegoers were questioning “the accuracy of the film, while others are excited about Russell Crow’s presence in the film. Others consider the movie to be a spin-off of the classic 1973 horror film The Exorcist, starring Linda Blair. Moreover, some viewers find the horror concept to be overdone, deeming the film as ‘another exorcist.'”

Total annual box office for 2023 for Jan. 1-April 16 is clocking $2.5 billion, +44% over the same period last year.

Here’s how the top 10 looks; still a close call for No. 3:
1) Super Mario Bros Movie (Ill/Uni) 4,371 (+28) theaters, Fri $22.6M Sat $39.5M Sun $24.9M 3-day $87M (-41%), Total $347.8M/Wk 2
2.) Pope’s Exorcist (Sony)3,178 Fri $3.465M Sat $3.1M Sun $1.9M 3-day $8.5M/Wk 1
3.) Renfield (Uni) 3,375 theaters Fri $3.1M Sat $2.75M Sun $1.85M 3-day $7.7M/Wk 1
4.) John Wick: Chapter 4 (LG) 3,033 (-574) theaters, Fri $2.1M, Sat $3.5M Sun $2.08M 3-day $7.67 (-47%), Total $159.8M/Wk 4
5.) Air (Amazon) 3,507 theaters,Fri $2.15M Sat $3.3M Sun $2.15M 3-day $7.6M, Total $33.1M/Wk 2
6.) Dungeons & Dragons (Par/eOne) 3,324 (-532) theaters, Fri $1.94M, Sat $3.3M Sun $2.1M 3-day $7.4M (-47%), Total $74.1M/Wk 3
7.) Suzume (Sony)2,170 theaters Fri $2.15M Sat $1.6M Sun $1.1M 3-day $4.8M/Wk 1
8.) Mamma Mafia (BST)2,002 theaters Fri $860K Sat $900K Sun $540K 3-day $2.3M/ Wk 1
9.) Scream VI (Par) 1,288 theaters (-998), Fri $430K Sat $640K Sun $350K 3-day $1.42M (-59%), Total $106.7M/Wk 6
10.) Nefarious (Soli Deo Gloria) 933 theaters Fri $495K Sat $475K Sun $290K 3-day $1.26M/Wk 1

 

[wabbott]

https://deadline.com/2023/04/biggest-box-office-bombs-2022-lowest-grossing-movies-1235325138/

The Biggest Box Office Bombs Of 2022: Deadline’s Most Valuable Blockbuster Tournament
By Anthony D'Alessandro
Editorial Director/Box Office Editor
April 14, 2023 3:40pm

Deadline’s Most Valuable Blockbuster tournament took a hiatus during the pandemic as movie theaters closed for the majority of 2020-2021 and theatrical day-and-date titles on both the big screen and studios’ respective streaming platforms became more prevalent. Coming back from that brink, the studios have largely returned to their theatrical release models and the downstream monies they can bring. Not to mention their power in launching IPs around the world with big global marketing campaigns. When it comes to evaluating the financial performance of top movies, it isn’t about what a film grosses at the box office. The true tale is told when production budgets, P&A, talent participations and other costs collide with box office grosses, and ancillary revenues from VOD to DVD and TV. To get close to that mysterious end of the equation, Deadline is repeating our Most Valuable Blockbuster tournament for 2022, using data culled by seasoned and trusted sources.

While everyone waits with bated breath on the final two most profitable films in Deadline’s Most Valuable Blockbuster Tournament, let’s reflect on the most notable bombs of 2022. Realize that, at the end of the day, it’s better to take a loss in a theatrical window downstream model versus collapsing windows with Premium VOD or streaming — or even worse, sending a movie straight to streaming. If you’re going to do that, best to make your movies cheap.

On these five films, studios took the road best taken.

Strange World
Walt Disney Animation
Total Loss: -$152.4M​

It’s not enough to say that original animation is a challenge at the box office when it comes to Strange World‘s failure. The movie centered on a family of explorers, the Clades, as they attempt to navigate an uncharted, treacherous land alongside a motley crew that includes a mischievous blob, a three-legged dog and a slew of ravenous creatures. Some might say Disney’s embrace of a gay character in the film turned off red-state audiences, while critics found the fantasy pic to be clunky and incomprehensible, and the animation retro and stale. Disney nonetheless supported the movie with a full theatrical release and dated it during their traditional five-day Thanksgiving launchpad, where it saw a record-low start for a Disney Animation title during that frame with $18.8M. Disney knew the goods were soured and had Strange World on Disney+ a month later, by December 23. Disney has done better in their first go-rounds with original IP in Wreck-It Ralph and Zootopia. However, one thing is clear: post-pandemic, it is getting whipped at the box office by Illumination with Minions: Rise of Gru and The Super Mario Bros Movie.

THE BOX SCORE

Amsterdam
New Regency/Disney
Total Loss: -$108.4M​

This New Regency-financed film had to shift its planned production from Boston to Los Angeles due to Covid. Despite California tax credits of $2.5 million and the period nature of the film, the budget shot up from $50M to $80M. The pic also featured a massive all-star cast including Margot Robbie, Christian Bale, John David Washington, Taylor Swift, Chris Rock, Anya-Taylor Joy and Rami Malek to name a few. Bale got paid under his normal rate of $5M, while other stars showed up to play with filmmaker David O. Russell, opting for lower paychecks (read: Oscar winner Malek received a six-figure payday). That said, way too much spend for an early World War I era-set absurdist ensemble comedy that had zero draw. While the intent was to make another American Hustle here, Amsterdam did not have that title’s 1970s hipness, camp, and mobster hijinks. New Regency is the big loser here financially as it merely has a distribution deal with Disney. Still, the financier is known for getting behind auteurs’ visions that do have a history of paying off blockbuster- and awards-wise, including the $533M global-grossing The Revenant which won three Oscars.

THE BOX SCORE​

Lightyear
Pixar/Walt Disney
Total Loss: -$106M​

One would think an extension of the Toy Story franchise, a spinoff about Buzz Lightyear, would be a sure-fire win, but devoted fans weren’t thrilled that Tim Allen wasn’t doing the voice-over (Chris Evans took over), not to mention their issues with the movie taking liberties with Toy Story canon. The $50.5 million domestic start wasn’t going to get Lightyear to the moon at the summer box office. Also potentially impacting grosses: former moviegoers getting too comfortable with seeing Pixar movies at home on Disney+ after Soul and Turning Red were sent straight to the service. Per CEO Bob Iger, Disney is returning to the regular Toy Story franchise with a fifthquel. With an A- CinemaScore, Lightyear had the lowest grade to date for a Toy Story movie. Critical reception fell from the typical 90%+ on Rotten Tomatoes to 74% on Lightyear.

THE BOX SCORE​

Devotion
Black Label Media/Sony
Total Loss: -$89.2M​

This Korean War fighter pilot story about Jesse LeRoy Brown, the first Black man to be trained by the U.S. Navy as an aviator and also the first Black pilot to see combat, was a passion project for all those involved including financier-producer Molly Smith’s Black Label Media; Top Gun: Maverick actor Glenn Powell, who read Adam Makos’ book when it first came out in 2015, and brought it to Smith; and filmmaker J.D. Dillard, whose own father was an African American naval pilot. No expense was spared and the production racked up a $90 million cost after Georgia and Canada tax credits. DNEG handled VFX, and there was a fleet of vintage aircraft. STX sold foreign which here amounts to $40M. Sony handled for a distribution fee on a rent-a-system basis, with $40M P&A backstopped by Black Label Media. Despite a world premiere at the Toronto Film Festival and very good reviews on Rotten Tomatoes at 80% certified fresh and an A- CinemaScore, no one came to this movie, which was released at Thanksgiving in the wake of Black Panther: Wakanda Forever soaking up business. Although the pic starred Powell after the $1.49 billion-grossing global success of Top Gun: Maverick and Majors pre-Creed III and Ant-Man and the Wasp: Quantumania, it wasn’t enough to pull in the masses. Domestic streaming and home entertainment didn’t go through Sony’s rivers, which only counted U.S. and Canada here; instead it was sold off to Paramount Home Entertainment and Paramount+.

THE BOX SCORE​

Babylon
Paramount
Total Loss: -$87.4M

If moviegoers last holiday season were going to drive in the snow to the movies, it was to see Avatar: The Way of Water, not this 3 hour-9 minute, R-rated raunchy tale about early Hollywood stars. This period piece, made for a lofty $80 million production cost around Santa Clarita, CA during Covid (some would argue still way too much for a film of this type) by Oscar-winning La La Land director Damien Chazelle, was greenlight by Wyck Godfrey, former Paramount president and producer of Chazelle’s First Man. Although he left the studio, the movie was championed by the current administration, screened a month before its opening, and notched five Golden Globe nominations (with a win for Justin Hurwitz’s nonstop jazz score) and three Oscar noms. How raunchy was this movie? Enough to possibly make people leave during the first 30 minutes, which included a hooker urinating on a Fatty Arbuckle-type in addition to an elephant going No. 2. Moviegoers gave it a C+, and critics weren’t wowed at 56% on Rotten Tomatoes. Armed with the star power of Brad Pitt and Margot Robbie, Paramount thought it had a Once Upon a Time in Hollywood in Babylon, but the latter was far too rambling. Not to mention, history speaks for itself when it comes to the lack of appeal for Hollywood insider movies at the box office: remember three-time Oscar-nominated Chaplin, starring Robert Downey Jr., which did only $9.5M domestic in 1992, and Robert Altman’s two-time Cannes-winning title The Player at $21.7M stateside.

THE BOX SCORE

 

[Obi-J Kenobi]

https://deadline.com/2023/04/box-office-super-mario-bros-renfield-popes-exorcist-1235325394/

‘Super Mario Bros’ Now At $87M: Best Second Weekend Ever For Animated Movie & Illumination – Saturday PM Box Office
By Anthony D'Alessandro
Editorial Director/Box Office Editor
April 15, 2023 10:29pm PDT

SATURDAY PM: There was a thought for a moment by distribution sources that Super Mario Bros Movie would be front-loaded — during its opening weekend, and in its second weekend. Boy, was that theory wrong. The Illumination/Universal/Nintendo feature take of the hit 1980s videogame is posting the best second weekend ever for an animated movie at the domestic box office with $87M, repping a great -41% hold off of a huge Easter weekend.

That figure defeats the previous second weekend record for an animated movie held by Disney’s Frozen II ($85.9M). More high scores for the Aaron Horvath and Michael Jelenic directed movie: Super Mario Bros. jumped 75% between its second Friday of $22.6M and Saturday of $39.5M. Total running cume by EOD Sunday is $347.8M. While we’ve heard that Warner Bros.’ Evil Dead Rise, another horror film next weekend, is expected to do $15M-$20M+ after its pivot from HBO Max to theatrical (which would be a fantastic result), it’s clear that Super Mario Bros is going to continue to be the big King Koopa of the box office.

Despite the five wide releases this weekend, everyone just wanted to see Super Mario Bros either for the first time, or again as the competition did single digits (check out the chart below).

Among the weekend’s most prolific wide entries, Sony/Screen Gems’ Russell Crowe movie The Pope’s Exorcist looks to notch No. 2 with $8.5M while Universal’s Nicolas Cage vampire movie Renfield will settle in third place with $7.7M. Although the supply of movies is good for exhibition, the reality is that we’re not in a market where Super Mario Bros has raised the water level for all boats, rather the Nintendo movie reps 62% of the weekend’s entire est. $140M box office. Both Pope and Renfield had a mixed reaction on social per RelishMix ahead of the weekend. Let’s face it, they’re niche horror movies, and the going factor for Evil Dead Rise next weekend is that it’s from the beloved Sam Raimi franchise. Remember, Fede Alvarez’s remake of Evil Dead was embraced by horror fans, opening to $25.7M back in 2013 (and finaling at $54.2M and just over $97M off a $17M production cost).

In regards to the response to Pope, RelishMix says moviegoers were questioning “the accuracy of the film, while others are excited about Russell Crow’s presence in the film. Others consider the movie to be a spin-off of the classic 1973 horror film The Exorcist, starring Linda Blair. Moreover, some viewers find the horror concept to be overdone, deeming the film as ‘another exorcist.'”

Total annual box office for 2023 for Jan. 1-April 16 is clocking $2.5 billion, +44% over the same period last year.

Here’s how the top 10 looks; still a close call for No. 3:
1) Super Mario Bros Movie (Ill/Uni) 4,371 (+28) theaters, Fri $22.6M Sat $39.5M Sun $24.9M 3-day $87M (-41%), Total $347.8M/Wk 2
2.) Pope’s Exorcist (Sony)3,178 Fri $3.465M Sat $3.1M Sun $1.9M 3-day $8.5M/Wk 1
3.) Renfield (Uni) 3,375 theaters Fri $3.1M Sat $2.75M Sun $1.85M 3-day $7.7M/Wk 1
4.) John Wick: Chapter 4 (LG) 3,033 (-574) theaters, Fri $2.1M, Sat $3.5M Sun $2.08M 3-day $7.67 (-47%), Total $159.8M/Wk 4
5.) Air (Amazon) 3,507 theaters,Fri $2.15M Sat $3.3M Sun $2.15M 3-day $7.6M, Total $33.1M/Wk 2
6.) Dungeons & Dragons (Par/eOne) 3,324 (-532) theaters, Fri $1.94M, Sat $3.3M Sun $2.1M 3-day $7.4M (-47%), Total $74.1M/Wk 3
7.) Suzume (Sony)2,170 theaters Fri $2.15M Sat $1.6M Sun $1.1M 3-day $4.8M/Wk 1
8.) Mamma Mafia (BST)2,002 theaters Fri $860K Sat $900K Sun $540K 3-day $2.3M/ Wk 1
9.) Scream VI (Par) 1,288 theaters (-998), Fri $430K Sat $640K Sun $350K 3-day $1.42M (-59%), Total $106.7M/Wk 6
10.) Nefarious (Soli Deo Gloria) 933 theaters Fri $495K Sat $475K Sun $290K 3-day $1.26M/Wk 1

This has been updated and SMBM is now at $92.5M for its 2nd weekend. What a glorious result for Universal.

Congrats to all at Illumination and Nintendo. People can say this project was easy money and a no-brainer or fool proof, but its tough putting together a successful movie. Kudos!

Hopefully, TWDC will be able to build off the success that SMBM is having with families, but again putting successful movies together is tough.

 

[wabbott]

This has been updated and SMBM is now at $92.5M for its 2nd weekend. What a glorious result for Universal.

Congrats to all at Illumination and Nintendo. People can say this project was easy money and a no-brainer or fool proof, but its tough putting together a successful movie. Kudos!

Hopefully, TWDC will be able to build off the success that SMBM is having with families, but again putting successful movies together is tough.

I concur. Walt spent more time reading movie scripts than any other single thing, IIRC.

 

[wabbott]

An interesting read.

https://seekingalpha.com/article/45...he-management-culture-overdue-for-real-change

Disney: Exhuming The Management Culture Overdue For Real Change​

Apr. 17, 2023 3:18 PM ETThe Walt Disney Company (DIS)WBD1 Comment
https://seekingalpha.com/author/how...evel_url:article|section:author|button:avatar
Howard Jay Klein
Investing Groups Leader

Summary​

• Once-great The Walt Disney Company has systematically reduced its prospects by its continuing belief in an infinitely expandable pie that is gone.
• We can't judge Disney stock by past or current metrics alone before we take a hard look at a moribund management culture.
• Since the Eisner era, The Walt Disney Company has had its share of triumphs and failures--can it row through the turbulent waters of today?
• Looking for more investing ideas like this one? Get them exclusively at The House Edge. Learn More »

“What’s past is prologue….” William Shakespeare, Act 1 The Tempest.

The ongoing debate between true believers and skeptics about the recovery and chances for a dramatic The Walt Disney Company (NYSE:DIS) upside continues to provide far too much heat and far too little light for the majority of its investors. On the one hand, we have a bull case built off the powerful fundamentals of the Disney business—its scale, its creative juices, the sheer breadth of its global business. On the other, we have the wary who believe the basic business model on which this once great company was built has been damaged beyond repair. Nobody expects Disney to go out of business at any time now. Nor does the bull scenario seem to meet the acid test of the new world of how entertainment will be delivered to global audiences.

The stock today is at best a HOLD if you own; if not, a pass.

Data by YCharts


Like most analysts, I sat down and looked at a data set of the company’s performance going to way back in the day. I began with 1984, the start of the Eisner/Katzenberg era, down to this day, let’s call it early post-covid 2023. What appeared to me to be the only conclusion was this: a decision now to be in the stock based on this long track record can’t entirely be made on poring over the numbers, the metrics and forward projections.

I often (perhaps too often) quote the famous line about show business uttered by the great screenwriter William Goldman. When asked how entertainment executives make decisions based on their knowledge, he said, “Nobody knows anything.”

Goldman was, of course, among the few truth seekers of the entertainment business who was singularly skeptical of anyone who was reputed to have the “golden gut.” That is the industry’s description of executives celebrated and lauded for their presumed ability to find the peals among the thousands of oysters presented to them. And Goldman’s quote belies that descriptive, implying that all entertainment is a crap shoot.



google


Above: The breakdown shows that above all segments, the Parks are still the most durable of contributors to EBITDA over time.

To get a firmer grasp on where Disney shares appear to be headed, one must, I concluded, dig deeper, not only through its historic metrics, but more critically, its operating history in the hands of the people who ran it. Is the Disney that was, the Disney that is? Yes, was my conclusion—right or wrong, you take your pick. And more critically, is the Disney that is, a product of what was, the Disney that will be?

My conclusion—right or wrong, is no. And for that reason I conclude—again right or wrong—that as yet, in the light of this history, I see no prospect for exponential recovery of Disney stock. Looking down the road at a probable recession looming, to me, for the foreseeable six months, my thought is that at ~$100 the stock is overvalued. The key: company history speaks to me. It has this message: the ghosts of Disney past, haunt its present and probably, its future. It will need a far more gut-wrenching swerve than is thus far evident, to bring it back to a fat-dividend-paying, high-ROI performance justifying the current price target consensus among analysts of $125.62.

Let’s dig: 1984-2023 What and who happened?​

google


Above: There is no more graphic way to show Disney's insatiable appetite for endless expansion of its IP well beyond the present capacity to absorb it than this visualization of the Disney businesses and units.

By any measure, the milestone events in the company began with the death of Walt Disney in 1966. Rummaging through the relics of the post-Walt era finds proof that in the 18 years after his demise, the company floundered. Its live action and animated movie product grew stale, trite and rarely profitable, with exceptions every now and then for a real hit. So, family heir Roy E. Disney (son of co-founder Roy Disney Sr.), his lawyer, Stanley Gold and mostly the voting power of its biggest shareholders the Bass brothers, brought pressure on the good old boy directors at the time, to approve a change in top management—then led by Walt’s son-in-law, Ron Miller. The owner of what was conceived as a hit pedigree from Paramount and ABC programming, Michael Eisner, was recruited and brought along with his side car associate of many years as well as close friend, Jeffrey Katzenberg.

Without question, the pair resuscitated Disney from its death spiral with a simple formula that was the Eisner mantra: "Don’t worry about hitting homers. Hit singles and doubles and you will score runs." Don’t overspend, exit all the dinosaurs on the board and in senior management. Shake the place up, face facts, and act expediently. It worked--for a while--but the Lion Kings are always few and far between as much as they can skyrocket earnings in a given year. More important, the management culture stagnated with time.

To be sure, tons of tell all Disney books, articles and biographies including Eisner’s own, have uncovered the good, the bad and the ugly of Disney’s Eisner era and subsequent history these last 40 years.

For something of a fly on the wall recollection, I turned to an old friend who was a Disney employee during part of the Eisner era. He worked at various jobs at Disney for seven years. He is best described as a member of the upper middle management. He is a man who subsequently built a great career in the industry after he left Disney on his own accord.

He’s a man best described as having the smarts of a skilled CIA field agent "Much of what Michael did was great. But there was constant scuttlebutt about executive comings, goings; angers and knifings were the style at high levels, we believed" my friend recalls. One man's opinion, but much corroborated by lots of Disney gossip accumulated over the years.

Here’s his take.

Once Eisner was able to systematically exit the old board and replace them with his acolytes, he ran the company through the lens of his own skills and failings. Disney was forever disorganized with reporting lines blurred, with backbiting among its top people raised to a high art. In succession, Eisner exited Katzenberg (who later sued for his bonuses), and an endless line of c-suite executives presumably brought into ease his burdens after his near heart attack in 1994 and soon after the tragic death of Frank Welles, who was really the glue that held the parts together.

Our observer (paraphrased from several phone conversations): This may sound a bit nutty, but for all his great qualities, Eisner never found a number two after the death of Frank Welles he really believed in. In fact, I had the crazy sense that he unconsciously hired top people for their potential to fail, not succeed. In that way, he assured himself of no competitor to hold the reins. It began with Jeffrey, then the disaster of Mike Ovitz (big gun from privately held CAA), Jamie Tarses, Schneider, Bloomberg, Murphy, and many others. There was a lot of Hamlet in Eisner, maybe even a bit of Macbeth thrown in.

He was an impulsive man. He could meet someone on a street corner, engage in a nice conversation, and decide on the spot to hire the person, impose him on the existing department and trigger hate and chaos. Over time, what you saw was one betrayal after another, old friendships destroyed. The success of the company during his reign definitely sprang from his willingness to bet on some of the creative geniuses around him in animation. But the gut truth of Disney is this: theme parks were always the reliable work horse that produced the most important profit center---sometimes all the earnings. Movies, with the exception of several animated home runs like The Lion King, were a roulette wheel where most of the bets made were losers. Disney did have live-action low-budget hits, but the studio over time generally underperformed regardless of the revolving door of management “geniuses” who pushed through them.

Eisner’s agreement to acquire ABC-TV was a wise one at the time. It was runner up to his original appetite for CBS, in which Lawrence Tisch held firm on a bloated price— and which he ultimately got from Sumner Redstone.

Eisner retired in 2005 when the CEO job fell to Bob Iger, then COO. He was the only number two, after the death of Frank Wells, to survive. Iger served to 2021. Unlike Eisner, he wasn’t a generator of initiatives, ideas, and infusion of fresh thinking, but a dealmaker, who expanded the company through acquisitions of IP. His hand-picked replacement, Bob Chapek, lasted only a year before he was summarily ousted. It was clearly an echo of the Eisner era. Iger, apparently wallowing in second thoughts as Chapek tried to pivot, was re-drafted to save the company. This triggered applause among shareholders and the industry.

Chapek blundered on the Florida "woke issue" tussle with its Governor. That’s a discussion for another forum. But one who understands the history of the Disney culture, cannot but conjecture whether Iger was merely repeating the old Eisner ego-tripping of building up, then destroying his number twos.

There are structural flaws in Disney leadership over time that is partially the genetic make-up of the entertainment business. But here we find the same old, same old. Iger creates an heir apparent, puts him into action as a successor, then observes - if not participates - in his shaky start only to re-emerge as a savior. This is standard Disney culture. Iger began almost immediately to move executives around the chessboard as did Eisner, making sure those changes insulated his own command free of challenge.

The board in the Eisner era was transformed from one old boys club to another new boys (and girl) club. They proved toothless. Today’s DEI Disney board is just as terrible in that instead of a new girls/ boys agenda, it is a woke array of golden resume holders picked first for their contribution to the illusion of diversity and then for some elusive ability to keep a CEO focused on reality. We shall see. Thus far, I’m unimpressed.

What has dogged Disney from the Eisner era until this day are a few underlying, unavailing truths investors need to take into account when deciding whether to buy, sell or hold.

It’s far too facile to simply judge Disney on the so-called “magic” of its IP and the potential for more to come. There is no Disney magic in a market where magic has become discounted, as it were, by glut—as I have noted in prior articles. What there is the global positioning of the company and its scale that sets the road to recovery of its excellent IP. However, those analysts who believe in the “forever power” of that IP need to take a second look. If you try a discounted cash flow version of valuing Disney IP—not the stock—over the next five years can you definitely say it is worth what it was five years ago? Or more realistically, can you discount its value assuming that audiences are so changed in composition that their worth will be diminished by the marketplace and technology

AI is so scary - I am told that one can sit at a computer with an AI app and order this “Produce me a script that shows funny animals in a zoo Disney style, escaping into the night and staging a Broadway show with ten potential hits.” I am told this could be done in roughly 15 seconds or less.

Disney shares are down 23.43% for the year. In October of 2020, in the teeth of the worst of covid, the stock was hanging in a $181.8. The most recent PT among analysts is $125.82. While I don’t see this as unrealistic given a head start by the recovery in theme parks, I also see far too many bearish signs that, try as he may, there are few tough tools Iger may have at his command, beyond cost cutting and content slashing that could bring DIS stock around. Both those tools were often reached for by Eisner. His mantra always was that of a cost cutter, an excess hater (though billions were wasted in his tenure), and a chess board mover of executives. His repeated attempts to consolidate businesses mostly failed.

What Disney needs most is a hard look at its scale, across all its businesses. Since the Eisner era, the ongoing culture was that there were always more worlds to conquer. That the demand for the great Disney IP was insatiable. They believed in a pie that had no limits to its circumference. The endless repurposing of IP through every conceivable kind of distribution channel is a flawed idea going forward. Disney will continue to release periodic winners. But as in the past, none of them will bring unto itself a solution to the dramatic recovery of its stock until it restructures its management culture to a more rational view of what lies ahead.

At writing, Disney’s ROE is 3.4%, clearly reflecting the covid damage among other causes. Confidence in the company remains strong among many big investors. As of this writing, the short interest is $1.81b and ratio at O.99%. So, it would suggest that the true believers remain convinced that led by Iger, some way, some time, Disney will recapture the magic and show the blowout earnings it once achieved when led by a blockbuster movie or a price rise at the parks.

It may happen, but our view, its wishing upon a star.

We see a downside drift ahead for The Walt Disney Company stock until Mr. Market gets a tighter grasp on the sector’s future then anything afoot by management today. If you own DIS stock, hold, a 20% move up or down could easily happen. If you don't, pass.

 

[wabbott]

https://blackbullmarkets.com/en/djn...ings-there-are-lots-of-questions-barrons-com/

DJ News
April 16, 2023

Netflix Is About to Kick Off Tech Earnings. There Are Lots of Questions. -- Barrons.com

By Eric J. Savitz

The outlook for Netflix's first-quarter earnings report, due after the close of trading on Tuesday, is a little muddled.
The company is still the clear leader in the streaming video market. But it is struggling to show meaningful growth given a weak economy, increasingly aggressive competition, and an apparently saturated U.S. market for streaming.
For the quarter, Netflix (ticker: NFLX) has projected revenue of $8.2 billion, up 4% from a year earlier. That compares to 2% growth in the December quarter, and 16% in the year-earlier period. Netflix is projecting profits of $2.82 a share, up from $1.33 a year ago.

The consensus view on Wall Street, as measured by FactSet, is that revenue will come in at $8.2 billion for a profit of $2.86 a share. Analysts expect the subscriber base grew by 2.26 million, boosting the total to 233 million.

Wall Street expects the company to pick up the pace in the June quarter: Consensus calls for revenue of $8.5 billion, up 8% from a year earlier, with profits of $3.07 a share and 3.7 million net subscriber additions.

This will be the first time Netflix will report results without having provided a specific forecast for subscriber growth, other than to say the net total should be positive. In another first, the earnings call this time around will be without founder Reed Hastings, who recently shifted into the role of executive chairman. Ted Sarandos and Greg Peters are now co-CEOs.

Netflix has a two-pronged strategy to boost growth. The company has unveiled a low-end ad-supported subscriber tier, and investors will be looking for Netflix to provide some content on how it has been received so far. Netflix has also promised to crack down on password sharing, but so far hasn't really taken any concrete steps in most markets.

On both fronts, it is too early to judge the long-term success. Meanwhile, there will be questions on the conference call about a recent move to cut prices in about 100 smaller markets in an apparent effort to boost subscriber demand. In the U.S. and Canada market, the company has lost roughly one million subscribers over the last four quarters combined, with the total settling in at a little under 75 million.

Wells Fargo analyst Steven Cahall contends that first-quarter results will be "less about quarterly results and more about the coming U.S. paid sharing implementation." He thinks extra member pricing will be higher than some investors expect, at about $8 a month. Cahall also contends the company is likely to comment bullishly about the outlook for incremental revenue growth from a crackdown. He keeps his Overweight rating and $400 target, and thinks EPS estimates could shoot higher if the company speaks bullishly on the outlook for a password sharing crackdown.

Citi analyst Jason Bazinet, who has a Buy rating and $400 target price on Netflix shares, cautions that the March quarter results could be "confusing," given the early stage of the ad strategy, the slower-than-expected rollout of new password sharing restrictions, and the price cuts in many minor markets. "We would encourage investors not to overreact" to the results and to "keep their eye on the prize." Bazinet's view is that the password crackdown won't boost revenue -- but that the ad tier can boost the subscriber base by 65 million, with average revenue above the traditional subscription model.

Piper analyst Thomas Champion, who has a Neutral rating and $325 target price on the stock, thinks "the setup looks mixed" for the first-quarter results. He thinks net subscriber adds will miss Wall Street estimates, and he says that the programming slate was weaker than in the fourth quarter. Writes Champion: "We continue to view Netflix as a story in transition."

Morgan Stanley analyst Thomas Swinburne, who has an Equal Weight rating and $350 target price on Netflix shares, says he sees both the paid sharing and ad-tier opportunities as "significant," but he thinks they are both already embedded in the company's share price. He also notes that the slower-than-expected rollout of a password crackdown could actually boost net subscriber adds in the March and June quarters.

Netflix shares are up about 17% this year.

Write to Eric J. Savitz at eric.savitz@barrons.com

 

[wabbott]

https://www.hollywoodreporter.com/b...zation-results-producers-weigh-in-1235376785/

Writers Authorize Strike: Nearly 98 Percent Support Work Stoppage

The Writers Guild of America says that it set a new record for support and participation with the referendum, with about 79 percent of eligible members voting.

By Katie Kilkenny
April 17, 2023 10:00am

Hollywood’s writers have spoken: They are prepared to strike if necessary.

In a record-setting vote that concluded on Monday, 97.85 percent of eligible members of the Writers Guild West and East voted to authorize a strike, while 2.15 percent voted against. A total of 9,218 writers participated in the vote, or nearly 79 percent of members eligible to take part. According to the guild, this level of participation and support is unprecedented for a strike authorization vote for the union.

These results do not ensure a work stoppage will happen, but instead give the union the option to strike if labor leaders decide one is necessary in ongoing negotiations with studios and streamers over a new contract.
“Our membership has spoken. You have expressed your collective strength, solidarity, and the demand for meaningful change in overwhelming numbers,” the WGA negotiating committee said in a message to members on Monday. “Armed with this demonstration of unity and resolve, we will continue to work at the negotiating table to achieve a fair contract for all writers.”

Union leaders will almost certainly use the wide margin by which members supported the strike authorization as leverage in ongoing talks with the Alliance of Motion Picture and Television Producers (AMPTP), which represents the film and TV production arms of companies like Disney, Netflix and Amazon.

Meanwhile, earlier on Monday, as the Writers Guild of America prepared to release the results of the vote, the AMPTP said in a statement that member support for a potential work stoppage was “inevitable.”

“A strike authorization vote has always been part of the WGA’s plan, announced before the parties even exchanged proposals. Its inevitable ratification should come as no surprise to anyone,” the Alliance of Motion Picture and Television Producers (AMPTP) said in the Monday statement, prior to the results going public.

The AMPTP added that, while its goal is to reach a “fair and reasonable agreement,” a deal “is only possible if the Guild is committed to turning its focus to serious bargaining by engaging in full discussions of the issues with the Companies and searching for reasonable compromises.”

WGA members have been voting on whether to authorize a strike since April 11, with polls closing on Monday at noon. Guild leaders and prominent members including Everything Everywhere All at Once co-director Daniel Kwan, One Day at a Time producer Mike Royce and Tell Me Lies showrunner Meaghan Oppenheimer heavily encouraged members to vote “yes” after the referendum was announced in early April.

The WGA and AMPTP have been negotiating a three-year contract covering around 11,500 film and television writers at the latter’s Sherman Oaks headquarters since March 20. Information about the progress of discussions has been scant, as the parties have agreed not to speak publicly about the substance of those talks. However, in early April the WGA alleged that “the studios need to respond to the crisis writers face” in negotiations, while in Monday’s statement the AMPTP suggested that the union has not been fully committed to reaching a deal prior to its strike authorization vote.

The union is targeting, first and foremost, compensation for writers in this round of talks. Some of its strategies for raising overall pay for members include setting higher wage floors across the board, standardizing fees for streaming and theatrical films, expanding span protection (which shields writers being compensated per episode from working for long periods on short-order series), regulating mini rooms, and instituting a mandatory two “steps” (points of payment) for feature writers. The WGA is additionally pushing for minimum television writing staff sizes and a minimum number of weeks of employment, THR reported in February.

Artificial intelligence is also in the union’s crosshairs in this round of talks. Amid the rise of ChatGPT and other chatbots that produce written material, the guild has clarified that it will be advocating to prohibit AI-produced or AI-rewritten content from being covered under the contract. Banning companies from assigning writers adaptations of writing originally generated by the technology is also a priority.

Meanwhile, several prominent studios and streamers continue to be in cost-cutting mode. As Disney conducts thousands of layoffs this spring and Showtime has recently slimmed down as it prepares to merge with the streamer Paramount+, it seems unlikely that the coalition of companies that make up the AMPTP will be willing to significantly boost writer-related costs. Moreover, companies remain highly aware that unions like the Directors Guild of America and SAG-AFTRA, which negotiate this year after the writers, are closely watching what the writers receive in 2023 as a potential precedent.

Writers last took a strike authorization vote in 2017, during a tough round of negotiations where the critical issue on the table was, again, compensation. In that year, 96.3 percent of voting members supported the strike, but the guild and studios ultimately reached a deal at the last minute that averted the shutdown. Ten years prior, however, writers went out on strike for 100 days after 90 percent of eligible members supported a strike authorization.

The WGA and studios are now in a race against the clock as the end of the guild’s contract, on May 1, looms. After that date, the WGA could call a strike at any point.