DIS Shareholders and Stock Info ONLY

[BrianL]

Update: 12.3 mil until Sunday, so the Christmas total might push it over 15. Since it was also mentioned here, Aquaman made 28 mil, would guess that it’s tracking for under 40 for the 4 day.

View attachment 820495

And people wonder why they make so many sequels.

 

[wabbott]

That's all my 4 year old watches.

found the rest of the WSJ article and posted it.

 

[wabbott]

https://www.sec.gov/Archives/edgar/data/1744489/000174448923000274/fy2024_q1xxclcoextensionxe.htm


Mr. Horacio E. Gutierrez
Senior Executive Vice President,
General Counsel and Chief Compliance Officer
The Walt Disney Company
500 South Buena Vista Street
Burbank, California 91521

RE: Amendment to that certain Employment Agreement, dated as of December 21, 2021, by and between Disney Corporate Services Co., LLC and Horacio E. Gutierrez, as amended (the “Employment Agreement”); and to that certain Indemnification Agreement, dated as of December 21, 2021, by and between The Walt Disney Company and Horacio E. Gutierrez, as amended (the “Indemnification Agreement”)


3.The first two sentences of Paragraph 3(a) of the Employment Agreement are hereby deleted in their entirety and replaced with the following: Effective on January 1, 2024, Executive shall receive an annual base salary of $1,500,000. Subsequent salary amounts shall be determined by the Company in its sole discretion; provided, however, that none of such subsequent annualized salaries shall be less than $1,500,000.

4.The second sentence of Paragraph 3(c) of the Employment Agreement is hereby deleted in its entirety and replaced with the following: Commencing with Company’s 2024 fiscal year, Executive shall receive an annual award with a target accounting award value (which value shall be as determined in accordance with the policies and practices generally applicable to the most senior executives of Company) of six hundred percent (600%) of Executive’s Base Salary as expected to be in effect at the end of such fiscal year; it being understood that the form of the award shall be determined by the Compensation Committee and such form shall be subject to the terms of the applicable plan or plans of the Company.

 

[fatmanatee]

Prime Video adding ads by default soon, ad-free for $3 more.

 

[Elijah Abrams]

Update: 12.3 mil until Sunday, so the Christmas total might push it over 15. Since it was also mentioned here, Aquaman made 28 mil, would guess that it’s tracking for under 40 for the 4 day.

View attachment 820495

Migration will still leg out over the holidays.

 

[Elijah Abrams]

https://www.wsj.com/business/media/...etflix-thats-a-problem-for-streamers-86b132f8

Your Kid Prefers YouTube to Netflix. That’s a Problem for Streamers.
Major streaming services test releasing children’s content on YouTube and cut back on fare for kids
By Jessica Toonkel
Dec. 25, 2023 5:30 am ET

The first episode of ‘CoComelon Lane’ was released on YouTube a week before the series came to Netflix.

When Loren Levy’s son Simon was little, he loved watching “Thomas & Friends,” the British cartoon about a talking train. That changed when Simon turned 8 and began watching videos on YouTube.

“Now, all he wants to do is watch gamers and basketball clips and highlights on YouTube,” said the South Orange, N.J.-based human-resources consultant. She can’t persuade him to watch anything else.

The Levy family learned what has become clear across the media industry: When it comes to children’s entertainment preferences, YouTube trumps all.

Netflix’s share of U.S. streaming viewership by 2- to 11-year-olds fell to 21% in September from 25% two years earlier, according to Nielsen. Meanwhile, YouTube’s share jumped to 33% from 29.4% over the same period.

That reality is changing major streaming services’ approach to children’s entertainment, from what shows and movies they make to where they release them. Many are pulling back on investments in children’s content, and some streamers have started content for young viewers on such platforms as Google-owned YouTube and Roblox.

Entertainment companies recognize that youths are increasingly drawn to short-form content, not longer shows on streaming services, said Michael Hirsh, co-founder of WOW Unlimited Media, a Canadian animator.

“These viewers are watching on their iPads or on other platforms that have moved to shorter and shorter segments, and it’s a real issue for the streamers,” said Hirsh.

When Toronto-based Spin Master released its animated children’s film about a school where students learn to ride unicorns, it made its debut on Roblox in September and was released on Netflix about two months later. The studio also released half of “Unicorn Academy” on YouTube in October, and Netflix released the second half of the movie on its own YouTube channel at the same time.

It’s really about following the consumer,” said Jeremy Tucker, global chief marketing officer at Spin Master, the studio behind major children’s franchises including “PAW Patrol.”

To get the rights to one of the biggest preschool animated hits, “CoComelon,” the streamer agreed with the show’s creator, Moonbug, to let the show remain on YouTube, where it started and continues to air. While the streamer has long had children’s channels on YouTube, such as Netflix After School, it has been resistant to putting full episodes of children’s originals on the platform for fear of cannibalizing its audience, according to people familiar with the situation.

That has started to shift recently. Last month, Moonbug, with Netflix’s blessing, released the first episode of a CoComelon spinoff series, called “CoComelon Lane,” on YouTube a week before the series came to the streamer.

Sony, with Netflix’s permission, in recent weeks launched a YouTube channel of episodes and clips from its “The Creature Cases” preschool series on Netflix to help draw a bigger audience, according to a person familiar with the situation.

As recently as a few years ago, entertainment companies such as Netflix and Warner Bros. Discovery, then WarnerMedia, ramped up their animated divisions. They saw cartoons—and youth programming in general—as essential to keeping subscribers as families want to keep services with shows their children watch.

Research showed that families with children canceled their service at a lower rate than households without them, said Tom Ascheim, a veteran Disney children’s programming executive hired by Warner in 2020 to oversee a new division creating shows for children and young adults.

“Every piece of data showed that households with children watch more and were less likely to churn,” said Ascheim, who recently co-founded Pith & Pixie Dust, a consulting firm that works with companies on attracting younger audiences.

Warner executives found that if young children watched franchises like Batman, the longtime value of that household as a subscriber was three times as large as one that hadn’t watched them, said a person familiar with the situation. Children’s shows were also thought to attract global audiences because the story lines are often universal and animation is easy to dub in foreign languages.

Under Ascheim, Warner’s new kids and young adult division planned a host of new shows for its linear networks and for Max.

Then austerity set in. After Warner merged with Discovery in April 2022, it made cuts to its animated and children’s division as part of an effort to reduce costs and pay down debt.

Ascheim’s position was eliminated, and many of the cartoons planned for what is now Max were shelved or licensed to competitors. The company pulled episodes of “Sesame Street” from Max to save money and has said that while it will continue to offer some children’s programming, Max’s focus is more on adults and families.

Netflix has also slimmed down its slate of animated children’s originals, opting instead to rely more on third parties such as Skydance Animation, with which it just signed a multiyear deal to do animated films. Now, Netflix is focusing its youth programming resources on bigger swings, such as the animated film “Leo,” starring Adam Sandler, its biggest animated debut ever in terms of views.

The eight largest U.S. streamers, including Netflix, Warner’s Max and Amazon Prime Video, added 53 originals catering to children and families in the first half of the year, down from 135 for the first half of 2022, according to Ampere. That represents a decrease of 61%, compared with a 31% decrease in overall originals across these streamers for the same period.

Among the challenges streamers have confronted in making children’s content is kids’ tendency to seek out characters they know. It is hard to make new ideas break through.

“It is really difficult to build new franchises, especially in this fragmented streaming market,” said Jeff Grossman, head of programming for Paramount+, which features such franchises as Nickelodeon’s “SpongeBob SquarePants, “Teenage Mutant Ninja Turtles” and “PAW Patrol.” Children’s programming is consistently the most-watched content on Paramount+.

That is particularly true when these companies are going up against Disney, whose Disney+ streaming service is still core to families with young children, including such big hits as “Bluey,” major animated films and Mickey Mouse.

It takes time to create animated fare, which means entertainment companies have to approve multiple seasons if they want to keep their audience before they get too old to watch the show anymore.

That is what happened with Caleb Mogil, who at 3 years old couldn’t stop watching “Charlie’s Colorforms City,” an animated series on Netflix. In the show, Charlie, a boy made out of the Colorforms stickers, takes viewers on adventures with shapes and colors.

Caleb loved the first season, but the second season wasn’t released for 2½ years, said his father, Ben Mogil, who is managing director of Qualia Legacy Advisors and has worked with animation studios.

By that time, Caleb had already moved on to the animated version of the British comedy “Mr. Bean,” on Amazon Prime Video.

Write to Jessica Toonkel at jessica.toonkel@wsj.com

We need YouTube as the content hub for all the media companies instead of their own streaming services, especially for kids' content. It could be a place for a revival of the original Thomas & Friends series and all the classic Sesame Street episodes, including new ones.

 

[wabbott]

We need YouTube as the content hub for all the media companies instead of their own streaming services, especially for kids' content. It could be a place for a revival of the original Thomas & Friends series and all the classic Sesame Street episodes, including new ones.

We visiting DD and SiL in Tulsa now, and they cut the cord a while back. They settled on YouTube premium as their go-to streamer. Asked had we cut the cord, and I told her if I could get someone to my house to shepherd me through the process, I would do it.

 

[Elijah Abrams]

We visiting DD and SiL in Tulsa now, and they cut the cord a while back. They settled on YouTube premium as their go-to streamer. Asked had we cut the cord, and I told her if I could get someone to my house to shepherd me through the process, I would do it.

What does DD and SiL stand for?

 

[greeneyedchick]

Dear daughter and sister-in-law

 

[wabbott]

Dear daughter and sister-in-law

In this case, son-in-law.

 

[wabbott]

https://deadline.com/2023/12/streaming-advertising-2024-netflix-disney-amazon-1235679805/

Advertisers Will Tune In To Streaming In 2024 As More Services Court Brand Dollars
By Dade Hayes - Business Editor @dadehayes
December 28, 2023 10:57am PST

Las Vegas trade show CES always kicks off the new year in gadget-happy style, showcasing the innovations that will (sometimes) define the future.

Alongside all of the autonomous vehicles and 8K drone cameras at this year’s January confab, something less tangible but just as significant will take up space: streaming advertising. Disney, which launched an ad-supported tier of Disney+ a year ago and now fully owns veteran ad purveyor Hulu, will have a sizable presence, as will players like Roku, Paramount Global, NBCUniversal and Amazon. Netflix, which entered the ad game just before Disney, will have its first-ever booth on the CES show floor.

Why so many words from streaming sponsors all of a sudden? That age-old show business concept: heat.

“One reason why the streaming landscape has exploded the way it has is that streaming allows producers to take more of a chance,” said Mike Fisher, Executive Director, Investment Innovation at media agency giant GroupM, in an interview with Deadline. The more big swings by talent, he reasons, the greater the viewer engagement, ergo more opportunities for brand messages. Digital platforms like TikTok may be surging, but there’s nothing quite like the living room. “In studies 25 years ago and in studies today, the TV is still the trusted medium for viewers to be served advertising,” Fisher said.

Along with Netflix and Amazon, Amazon’s Prime Video will begin showing ads on scripted films and TV shows in early 2024. Apple TV+ remains the only major subscription streaming outlet without an ad tier, though rumors have persisted for the past couple of years it could join the chase. And then there is a burgeoning realm of free outlets and FAST purveyors, among them Pluto, Tubi and Xumo, all of which are owned by major media companies.

Brian Wieser, a former Wall Street analysts and ad exec who is now principal at research firm Madison and Wall, sees a few negatives to go with the positives and momentum in streaming. One concern is its smaller capacity. Instead of 18 minutes an hour, a common ad load on linear broadcast and cable networks, streaming is in the 4- to 5-minute range. Cord-cutting, too, is siphoning millions of customers away from pay-TV every year. While some are moving to internet-delivered bundles like YouTube TV, many are just focusing on a handful of streaming outlets. “The consequences of those changes could be meaningful for advertising,” Wieser wrote in a report forecasting 2024 trends. “Shifts to streaming makes it almost certain to me that the tonnage of advertising those consumers are exposed to will go down significantly as a result.”

National TV advertising will grow by low-single-digit percentages in the coming years, Wieser believes. Next year will get a shot in the arm from the Olympics and the election, reaching $70.9 billion, before falling back to $61.9 billion in 2025. In his analysis and those of other ad-industry trackers, gains in streaming are by and large being offset by declines in the traditional business.

Sports remains a beacon of hope, ramping up its streaming profile while also keeping the lights on for linear TV. Amazon, the No. 3 digital ad seller behind Google and Facebook, has been gradually closing the gap, in part because of Prime Video’s gains. The service kicked off exclusive streams of Thursday Night Football in 2022 and has used the NFL games to scale up its overall capacity. In a recent note to clients, Wedbush analyst Scott Devitt estimated that connected-TV advertising is growing at a nearly 15% annual clip. Given the company’s global footprint, the ad rollout next year could bring in $6.5 billion in new revenue per year, he predicts.

As others join Prime Video in the live sports race, the task of executing a streaming ad experience is far from a straightforward affair. Unlike on-demand streaming, which is handled one by one for viewers pulling up programs to watch, sports has to be experienced live.

David Dworin, Chief Product Officer of Comcast-owned ad tech firm FreeWheel, says “the risk is huge” in sports because the tools of automation and programmatic buying generally cannot be deployed. Speaking at the recent TV Now conference hosted by Paramount Global, Dworin said any missteps or tech glitches can mean advertisers “miss the window with millions of viewers.”

Programmatic advertising gained prominence as an online phenomenon as the internet evolved. It has been making an occasionally awkward transition to video. It essentially looks to match buyers and sellers in a real-time fashion without the need for a sales transaction brokered by human workers. While the radar is sometimes errant, these computer-guided tools use the array of data points a viewer is putting out in order to serve them relevant ads. If they love to cook, are shopping for a car and have planned a ski vacation, they should see ads according to those activities and preferences.

Appearing onstage with Dworin at TV Now, Jill Steinhauser, Senior Vice President, Ad Sales Planning and Operations at Warner Bros Discovery, said her company still relies on human staff, though it is looking to explore new technology. Buyers looking to get time on marquee Max shows like Succession or The Last of Us largely do so the old-fashioned way. “It’s just too premium of content to risk with where we are today with programmatic transactions,” she said. Across all of Max beyond the vaunted HBO zone (which was off-limits to brands when the service formerly called HBO Max launched advertising in 2021), she said programmatic “plays a really healthy role in terms of monetization.”

Measurement, the dull-sounding term for the third-party tracking of viewership of programs and ads, is crucial piece of the streaming marketplace, but it hasn’t yet fallen snugly into place. Nielsen, which remains the dominant provider, has struggled to evolve its decades-old methods and infrastructure for the streaming era. Nevertheless, speaking from the buy side, Fisher said GroupM is “optimistic” that true currency in streaming — agreed-upon data that will enable billions of dollars to change hands — is close at hand.

Last fall, the upfront marketplace (where crucial bets are made by advertisers months ahead of when programming appears on screens) “was not ready to move from the hundreds of millions to the billions to be transacted,” Fisher said. Areas like “back-end tools, billing workflows … that’s the work we’ve got ahead of us,” not just for measurement companies but for everyone with skin in the game.

In the living room, there are also improvements to be made of the viewer experience. Repetition of ads, which is supposed to be reined in by something known as “frequency capping,” also gets a lot of mention by streaming skeptics, probably because of the lighter overall ad load. Freewheel’s Dworin said he says the sense of viewer backlash is overstated. “Consumers remember ad repetition worse than it is,” he said. “They think they saw it twice in a row and what they meant was, ‘Every pod started with it’ or ‘I saw it twice tonight,’ which is really hard to manage for.” (And any NFL fan who has been hit by wave after wave of appearances by Jake from State Farm or musical Burger King spots can attest that repetition is not a consideration for streaming alone.)

Those in the streaming ad trenches are dealing with massive complexity compared with the linear ecosystem. Shared networks are used by a mosaic of programmers, distributors and vendors. Bit by bit, though, and to a striking degree compared to a few years back when gloom-and-doom forecasts suggested the rise of Netflix meant the eventual death of video advertising, viewers are getting comfortable with the tradeoff of paying less and getting ads. “The fact that you’ve been being served ads and you don’t see that as intrusive,” Fisher said, “that’s a huge win for us.”

Marketers, too, know that they need to fish where the fish are.

Stefan Van Engen, VP of Content Programming and Partnerships at Xumo, recalled at TV Now when the company (now owned by Comcast) was once a startup working on the frontier of streaming ads. Van Engen and his colleagues, after creating a white-label technology for smart-TV firm LG, used to walk around with a TV set and show ad buyers how ads looked in streaming. “There was always confusion,” he said. People would ask, “‘Is this a digital buy? Is it a video buy? Is it a traditional buy?’ And I think, thankfully, those days are gone. This is a video buy across the board and it’s a premium buy.”

 

[wabbott]

https://www.hollywoodreporter.com/b...ramount-merger-wall-street-doubts-1235773951/

Warner Bros. Discovery-Paramount Merger? Wall Street Has Major Doubts About a Deal
Analysts say they have "a hard time seeing" a transaction happen, compare it to catching "a falling knife" or even a "financial death sentence."
by Georg Szalai
December 28, 2023 4:45amPSTtions

Wall Street’s Hollywood observers got a pre-holiday surprise this year when news broke that Warner Bros. Discovery CEO David Zaslav has explored a potential deal for Paramount Global in a meeting with its CEO Bob Bakish and chair Shari Redstone, who controls the firm through family holding company National Amusements.

Shares of Warner Bros. Discovery (WBD) dropped as investors tried to unpack the news and analysts expressed their doubts about the potential deal, using such phrases as “we have a hard time seeing” a deal and equating it to catching “a falling knife” or even a “financial death sentence.”

While not quite describing the revelation of the deal talks as a nightmare before Christmas, Wells Fargo analyst Steven Cahall straight-out told investors in a report: “We prefer WBD stand-alone.” After all, “pro-forma WBD/Paramount would be a beast of a mostly linear company,” he explained. That merged company would control cable outlets ranging from HBO, TNT and TBS to Comedy Central, Nickelodeon, BET and MTV.

Cahall explored some deal scenarios in his report entitled “WBD + PARA = ?.” Scenario 1 would see WBD buying Paramount, which the analyst called a “bad idea.” His estimates include combined revenue of $72 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) of $13 billion, “of which about 50 percent/90 percent would be linear.” The expert doesn’t like the idea of WBD taking on incremental debt for a takeover, noting: “WBD’s debt has been a problem since the merger, and this would only magnify melting ice cube sensitivities.”


Scenario 2, an all-stock merger, would be “more neutral” for the stock, Cahall argued. “This has the benefit of not requiring incremental debt, but Paramount’s controlling shareholders don’t cash out,” he explained. “The drawback is lack of M&A premium to the new stock.”

Deal scenario 3 would see WBD acquiring National Amusements (NAI) before a Paramount merger. “WBD could look to control Paramount through the A shares for about $2 billion,” Cahall wrote. “This gives management options, such as divestitures, prior to an all-stock merger of WBD/Paramount B (stock).” His conclusion: “We see this as the lowest risk (i.e., best) option for WBD (smaller outlay). This also gives NAI immediate cash so may be most probable.”

Cahall wrapped up with broader deal thoughts. “Paramount is in play given the preponderance of press reports,” he suggested. “We think WBD is better off as a seller than buyer given the strength and uniqueness of Warner Bros. and HBO, but management may have different ideas (or there may not be suitors). Any deals will likely require significant regulatory approvals of one to two years, and Paramount A versus B [shares] deals could engender shareholder lawsuits. Perhaps the biggest conclusion is that media’s challenges inevitably lead to rationalization.

TD Cowen analyst Doug Creutz sounded another bearish note on a possible WBD megadeal for Paramount. “We Have a Hard Time Seeing a Paramount Merger Happening,” he summarized in the title of his report. One of its summary’s other key takeaway was: “We don’t think M&A is the solution.”

He noted “two obstacles” to a deal agreement: “regulatory and consideration.” On the regulatory side, “we have a very hard time believing the current FTC/DOJ, which has been very aggressive in combating industry consolidation, would give this deal a pass,” Creutz argued, while others have noted that the transaction wouldn’t bring together two broadcast networks. “It would involve merging two of the five remaining major movie studios, two major television studios, and would create a very high concentration of linear network ownership (which last we checked is still a very large and EBITDA-positive business even given cord-cutting), including a significant consolidation of major sports rights.”

Even if President Joe Biden loses the 2024 election “and a GOP winner (likely to be Trump given current polling) were to bring in new regulators, however, we still think the regulatory hurdles would be high.” Why? “Trump’s head of DOJ Makan Delrahim made an unsuccessful effort to block the AT&T-Time Warner merger, and we think WBD-Paramount would be more problematic from a consolidation standpoint,” Creutz argued. “We also note that WBD’s news network CNN has been a verbal target of Trump in the past, and we would guess that he probably still holds a grudge.”

The expert sees consideration, or how to pay for it, as the second hurdle for a combination. “We think WBD is at least two years away from being able to use cash/debt to finance a major acquisition, so a Paramount deal would almost certainly have to be a stock deal,” he argued. “Shari Redstone would have to give up control of Paramount and become a minority equity holder in a merged entity; presumably she would want some sort of significant premium given the equity consideration, which we think WBD would and should be reluctant to pay (particularly given the beating WBD shares have taken since the Discovery-Warner merger was announced).”

Creutz’s takeaway from the deal talks report was negative. “Ultimately, we think such a deal would be a mistake for WBD,” he wrote. “Scale isn’t the solution to their problems, which are all about industry structure (if scale was a magic bullet, Disney’s stock wouldn’t be down more than 50 percent from its all-time high).”

The analyst also argued that “Paramount would bring a lot of content ballast to the table, but much less in terms of premium, long-tail franchises, and WBD already has plenty of breadth of content.”

Creutz’s alternative deal pitch: “What might make more sense would be an agreement to bundle Max and Paramount+ together as a single product, while remaining separate companies.” Explained the analyst: “This would be a step towards reconstituting an over-the-top version of the old linear bundle (wholesaled to distributors like Amazon and Apple, as well as the multichannel video programming distributors), an outcome that we think could ultimately make media investible again.”

Meanwhile, MoffettNathanson analysts Robert Fishman and Michael Nathanson put the Paramount-WBD talks into the challenging broader media and entertainment environment. “These desperate times for media companies are leading them to explore desperate measures,” they argued.

After going through a whole list of arguments in favor of a deal, including bringing together news powerhouses CNN and CBS News, sports operations, as well as streamers Max and Paramount+, the experts also outlined the case against a merger. Among their points: “WBD would likely be paying a hefty premium for a quickly declining linear TV business, allowing it to again double down on its own pressured business,” Paramount’s debt load and the argument that “even together, the two would struggle to build a scaled streaming service that would allow the combined company to remain viable as linear cash flows fade away.” And they argued: “The IP WBD would gain would also be surprisingly limited as much of the company’s ‘crown jewels’ are owned or have significant profit participations with third parties, such as Skydance Media,” a reference to Top Gun: Maverick.

Fishman and Nathanson diagnosed an “increasing sense of desperation around media,” concluding: “As pressure mounts from growing secular linear TV advertising headwinds, cord-cutting acceleration and a weaker macro backdrop putting more burden on sustainable cash flows, and leverage moving in the wrong direction for Paramount, we still question why any company would try to catch a falling knife?”

So the analysts see this as the wrong time for a Paramount deal, suggesting that a possible advertising recession could ensure “an even cheaper price” for any suitor. And given Paramount’s upcoming affiliate fee renewal talks with Charter Communications, “we hear April time frame … wouldn’t any buyer before underwriting any valuation need to see the negative impact on both its linear TV business and whether Paramount+ is forced to be included in a deal without wholesale payment” like Charter agreed with Disney for ESPN+ in their recent carriage deal, they asked.

The MoffettNathanson team’s alternative deal pitch includes a different sector biggie: Comcast, led by chairman and CEO Brian Roberts. “It has long been speculated that Brian Roberts has interest in getting bigger in media by leveraging ownership of NBCUniversal to better compete with Disney,” the analysts highlighted. “At the end of the day, Comcast may be the one strategic buyer with the capital structure and assets required to benefit either WBD or Paramount in a long-term viable way.”

Suggested Fishman and Nathanson: “An NBCU spin could help WBD de-lever depending on deal structure. The key issue is whether this is a path the company really wants to explore, especially over the coming months ahead of likely even more disruption in the ecosystem.”

The always-outspoken Richard Greenfield, analyst at LightShed Partners, also didn’t mince words, highlighting that “hope is not a strategy” in a Dec. 19 note before the news of the WBD-Paramount exploratory talks emerged.

“Many investors believe consolidation is the answer to legacy media’s streaming woes. We disagree,” he emphasized. “Legacy media companies are simply too late and not equipped talent-wise or strategy-wise to build scaled global streaming services on top of the growing headwinds facing their linear TV assets.” 

Continued Greenfield: “Investors point to a combination of Warner Bros. Discovery and NBCUniversal or Warner Bros. and Paramount as potential solutions. Yet, layering on even more linear TV assets to any of these legacy media companies feels like a financial death sentence.”

The expert also called regulatory approval “challenging” right now. “We doubt anyone is going to attempt a major transaction in 2024 in the midst of a presidential election and with the current administration hostile toward consolidation,” he explained. “If legacy media M&A is even possible in the next administration, your are looking at announcing a deal in 2025 that would not close until 2026.”

Concluded Greenfield: “Legacy media companies simply do not have time to wait and hope for M&A as a strategy. They must take action to alter their streaming strategies immediately or their stocks will continue to suffer.”

 

[RivShore]

compare it to catching "a falling knife" or even a "financial death sentence."

Just how every unwitting WBD shareholder (AT&T's "gift") wants to see the stock described

 

[wabbott]

Just how every unwitting WBD shareholder (AT&T's "gift") wants to see the stock described

Best we can hope for is if CMCSA buys it.

 

[wabbott]

Domestic Box Office Expected To Drop By $1 Billion In 2024 Amid Fewer Films & Waning Moviegoer Sentiment. But 30 Tentpoles Provide Hope.

December 28, 2023 - 12:42pm PST
Anthony D'Alessandro - Editorial Director/Box Office Editor

There will be blood at the box office in 2024.

And not the type that comes with two studio tentpoles going at each other. Nah, as Barbenheimer showed this past year, that’s actually great for business.

We’re talking the red-ink kind, and it will be felt on both sides, studios and cinemas, with the latter sector experiencing a potential collapse come spring among midsized circuits due to the erratic pipeline of product.

While this year counted 124 wide theatrical releases (opening in 1,000-plus theaters), the dual WGA and SAG-AFTRA strikes forced a bulk of tentpole delays that are leaving 2024 with only 107 wide titles. Craters abound on the release schedule, with six weekends currently sans wide entries: January 26, March 15, May 31, October 11, December 6 and December 27. The domestic box office this year, after being +21% over 2022 with a near $9 billion, is expected to shed at least $1 billion in 2024 to $8 billion, -11%.

After exhibition and the major studios were wounded during Covid due to cinema closures between March 2020-March 2021 and features stuck in post-production during fall 2022, this year saw a return to some form of normalcy due to a conveyor belt of tentpole releases every weekend starting back in mid-February with Disney/Marvel Studios’ Ant-Man and the Wasp: Quantumania ($106.1M opening, $214.5M domestic) and through post-Labor Day with New Line’s The Nun II. The supply of wide releases was so great in 2023 that there’s only one weekend without ’em: this upcoming New Year’s weekend.

An indication of the new year’s success at the box office is always determined by the spillover of the previous year’s pinnacle Christmas release; in recent years that was 2021’s Spider-Man: No Way Home delivering $232M to the 2022 domestic B.O, and 2022’s Avatar: The Way of Water fueling this year with $283M. There’s no FOMO movie on the marquee this holiday season that will continue to rain cash next year, thanks to the the lackluster $38M+ four-day Christmas launch of Warner Bros/DC’s Aquaman and the Lost Kingdom, coupled with a slew of titles posting high-single-digit grosses during the post-holiday midweek. Wonka‘s $8.9M was the second-lowest gross for a No. 1 movie on December 26 in the millennium after 2020’s Wonder Woman 1984 ($5.8M) — and that’s when a majority of the nation’s cinemas were shuttered due to Covid.

“We should be nervous about the first half of 2024,” sweats one studio exec who wanted to speak confidentially to Deadline.

“There’s no way that a labor stoppage as prolonged as chaotic as this wasn’t going to have consequences,” the suit explains. “Fire comes through and burns a forest and a town, and then the fire is over. But the consequences of the fire aren’t over: There’s mudslides, and there’s damaged infrastructure.”

“The fire is over: Now we’ve gotta rebuild the town,” they add.

The weakest part of the 2024 theatrical schedule is arguably in its first four months. Through the end of April 2024 there are 30 wide releases (north of 1,000 screens) on the calendar, compared with 44 for the January-April 2023 span.

The first four months of 2023 grossed $2.65 billion built on the backs of five movies: Super Mario Bros Movie, Ant-Man and the Wasp: Quantumania, John Wick Chapter 4, Creed III and Scream VI. Touching that figure would be a miracle, especially with nothing on the calendar looking like the half-billion plus success of Super Mario Bros.

When it comes to Q1 2024, the stress is on Warner Bros/Legendary’s Dune: Part Two to truly deliver and fire up the year when it arrives March 1; some rival distributors believe the sequel could be a billion-dollar-grossing movie. Dune 2 is one of six titles that could clear $100M+ in the quarter, in addition to Bob Marley: One Love (on February 14), DreamWorks Animation’s Kung Fu Panda 4 and Angel Studios’ Cabrini on March 8, Ghostbusters: Frozen Empire on March 29, and Legendary and Warner Bros’ Godzilla x Kong: The New Empire on April 12.

There are another 31 wide titles set for summer 2024 (down from this year’s May-Labor Day season of 38 wide entries) and another 25 booked for the fall and holiday corridor (down from 2023’s post-Labor Day frame of 44). While there are some who pine at Dune: Part Two breaking the year’s sluggish dam and the box office, some cynics believe the uneven distribution pattern of tentpoles won’t find its footing until Marvel Studios/Disney’s Deadpool 3 opens July 26.

In total, exhibition sources are projecting 30 movies that could do more than a century-sized worth of business or more at the domestic box office (see that list of films below). But don’t get excited: Last year at this time we forecasted that 33 movies would click past $100M, and that number fell short by 10: Three of them moved to 2024 (Dune 2, Kraven the Hunter and Ghostbusters), while the other seven missed the mark (Haunted Mansion, Shazam: Fury of the Gods, Blue Beetle, Trolls Band Together, Wish and The Nun II). With Wonka crossing $100M today, there’s technically 22 movies that crossed the century mark stateside in 2023, not counting carryovers Avatar: The Way of Water and Puss in Boots: The Last Wish.

However, the broken rhythm of big product next year poses further questions about when the theatrical marketplace might return to a place of strength. The consequences are profound trying to rebuild the audiences’ interest in theatrical in getting the business healthy again.

“The issue is: What’s happening with the audience,” says another major studio boss concerned about the collapse in superhero movies this year, exemplified by Aquaman and the Lost Kingdom and early November’s The Marvels. “These are far bigger issues for me: The failures of this year and beyond, coupled with the lack of originality and the need for newness that actually works. The risk is that we’re boring the audience with the same old sh*t.”

Myriad stats from the National Research Group’s recent study on 2024 support studio bosses’ anxieties. NRG’s polling shows that 69% of moviegoers want more original movies. Meanwhile, 41% agree that movie franchises “are getting better,” down from 56% in February 2022. There’s also declining sentiment that franchises are a “safer choice to spend money on” and are “must-see in theaters.”

That said, if the audience is to expand for original movies, studios need to put their money where their mouth is, and that resides in a studio commitment of marketing dollars and zeitgeist promotion, coupled by long theatrical windows. Consider the three top-grossing movies in 2023 that weren’t based on pre-existing IP, franchises or brands (i.e., Pixar): The auteur Christopher Nolan-fueled Oppenheimer at $326M, the red-state-led Sound of Freedom ($184.1M) and Blumhouse’s dancing bot, girl-promoted M3GAN ($95.1M).

Amazon MGM’s Saltburn ($11.1M after its November opening; already on Prime Video) and Searchlight’s Poor Things (current gross $7.2M in the middle of week 3) are original, edgy, director-driven movies with a vision, style and a voice. But what gets them to the next stratosphere at the box office? Oftentimes, while studios cry “we need original,” they only spend to the specifics of a movie’s budgetary economics and the limitations of a movie’s audience. It takes gut and faith to break the mold, not necessarily a calculator and a P&L statement.

Despite the box office boom this year and the Barbenheimer weekend that grossed $310.9M overall, NRG found that Americans aren’t attending movies as frequently as they did pre-pandemic, off by close to a third from pre-pandemic levels. Hence, the box office is down in spite of ticket price increases. The challenge the industry faces is getting quality, theatrical product out there on a continuous basis to consistently engage the habit of moviegoing.

Another takeaway from the NRG study: Compared with other out-of-home activities (i.e., amusement parks, sporting events, restaurants), moviegoing ranks lowest on providing “a lot of value” for consumers’ money spent. That said, “cheaper tickets” and “cheaper concessions” are points that prospective customers cite most often as a way to get them back to theaters, a sentiment up significantly over the past two years, likely driven by inflation concerns.

Post-Covid, moviegoing continues to be challenged by the comfort of the home-viewing experience, which has improved over the past five years as high-quality tech has dropped in price, internet speeds have improved, and streaming services and shortened windows proliferate. Per NRG, around two-thirds of Americans prefer watching movies at home (64% at home vs. 36% in theater) versus 2018, when the preference of cinema viewing outpaced that of the home (57% theater vs. 43% home).

Many continue to assess how Barbenheimer became the event that it was. But what’s clear is that we need more out-of-body experiences as such. There were reports and photos of girls and guys going on dates during the opening weekend for both titles; women dressed in Barbie evening dresses and dudes in Oppenheimer soft-brimmed hats. The bare essentials to why both worked boiled down to a movie about American’s most popular doll that had never been made before, tricked out with the right cast aimed squarely at women, teamed with a movie from a beloved fanboy director in Christopher Nolan complemented male moviegoing on that July 20-22 weekend. In the case of Barbie‘s marketing, the social media meme of it all enabled fans to take ownership of the promotion. It might be good to have more of that in the future.

In recent weeks there have been several additions to the 2024 theatrical calendar including Lionsgate’s Saw VI, The Strangers and White Bird: A Wonder Story as well as Amazon MGM’s Dwayne Johnson-Chris Evans movie Red One, Universal’s Wolf Man, Apple Original Films’ untitled Greg Berlanti-directed space race movie starring Scarlett Johansson and Channing Tatum, and the George Clooney-Brad Pitt noir Wolfs via Sony. And there’s still more to be dated including Lionsgate’s reboot of The Crow and its Guy Ritchie-directed The Ministry of Ungentlemanly Warfare with Henry Cavill, Henry Golding and Eiza Gonzalez; Joe Carnahan’s action movie Shadow Force; and Alexandre Aja’s Halle Berry horror thriller Never Let Go.

Despite the Debbie Downer points presented above, none of the major studios are looking to put the toothpaste back in the bottle and practice theatrical day-and-date releases on streaming. Given that jump in home viewing, theatrical continues to be the best way to lead with a movie’s chin and to raise its profile, delivering ancillary riches in the long run. Wall Street is fully aware of this, and the fact that Apple has arrived to the table to launch $200M movies in theaters (this past year’s Killers of the Flower Moon and Napoleon) and Amazon MGM’s return to the big screen further underscores the belief in the theatrical model.

Says Lionsgate Motion Picture Group Vice Chairman Adam Fogelson, whose studio broke $1 billion worldwide for the first time in five years this past year: “There’s no question about the value of a theatrical release. Even if a movie doesn’t overperform in theatrical; the stamp of quality, the value that theatrical provides is significantly important for downstream revenues.”

“Starting in the middle of 2024 into the next few years, you’re going to see a healthy, thriving movie business,” adds Fogelson, who is confident about the future of theatrical. “One of the great things that we’ve seen even during these complicated periods is how much people still love going to the movies, as long as you give them a movie they truly want to see.”

Movies That Could Gross $100 Million-Plus At 2024 Domestic Box Office

Title	Studio	Release Date
Bob Marley: One Love	Paramount	February 14
Dune: Part Two	Warner Bros/Legendary	March 1
Kung Fu Panda 4	Universal/DWA	March 8
Cabrini	Angel Studios	March 8
Ghostbusters: Frozen Empire	Sony Pictures	March 29
Godzilla x Kong: The New Empire	Warner Bros/Legendary	April 12
The Fall Guy	Universal	May 3
If	Paramount	May 17
Furiosa: A Mad Max Saga	Warner Bros/Village Roadshow	May 24
Kingdom of the Planet of the Apes	20th Century/Disney	May 24
Ballerina	Lionsgate	June 7
Inside Out 2	Disney	June 14
Bad Boys sequel	Sony Pictures	June 14
A Quiet Place: Day One	Paramount	June 28
Horizon: An American Saga – Part I	New Line	June 28
Despicable Me 4	Universal/Illumination	July 3
Deadpool 3	Disney/Marvel	July 26
Horizon: An American Saga – Part 2	New Line	August 16
Beetlejuice 2	Warner Bros	September 6
Transformers One	Paramount	September 13
Joker: Folie a Deux	Warner Bros	October 4
Smile 2	Paramount	October 18
Venom 3	Sony Pictures	November 8
Red One	Amazon MGM Studios	November 15
Gladiator sequel	Paramount	November 22
Untitled Disney Animation feature	Disney	November 27
Wicked – Part 1	Universal	November 27
The Karate Kid	Sony Pictures	December 13
Mufasa: The Lion King	Disney	December 20
Sonic the Hedgehog 3	Paramount	December 20

 

[wabbott]

https://www.hollywoodreporter.com/tv/tv-news/broadcast-tv-ratings-slump-strike-hit-fall-1235768798/

Strike Outs: Broadcast Ratings Tumble Without Scripted Programming
Bright spots like 'The Golden Bachelor' and the NFL can't paper over a lost fall for the networks.

by Rick Porter
December 27, 2023 9:00am PST

There were some genuine bright spots during a very weird fall on broadcast TV: The Golden Bachelor was a true breakout for ABC. NCIS: Sydney extended the CBS franchise all the way across the Pacific and is the most-watched entertainment program of the fall. NBC‘s first-year dramas Found and The Irrational found some traction and earned second-season pickups, and network fixtures like Survivor (CBS), The Voice (NBC) and Dancing With the Stars — back on ABC after a year as a Disney+ exclusive — continued to draw viewers.

But that’s about it. For the second time in the past four years, broadcasters faced major disruptions to their fall lineups and had to make patchwork schedules that scarcely resembled what they usually air. In 2020, the disruption was due to the COVID-19 pandemic, which idled productions for months and made filming more time-consuming once safety protocols were in place.

This year, the wound to the network business was self-inflicted: Labor strikes that began in May (the Writers Guild of America) and July (SAG-AFTRA) stretched for months — and ended with the media companies that own the big four networks acceding to most of the contract demands the two unions had made from the start. Writers went back to work in late September, and actors followed in November, precluding any chance of getting network favorites like Abbott Elementary, Young Sheldon and Chicago Fire back on the air before 2024.
https://eb2.3lift.com/pass?tl_click...8266577&ts=1703799348&bcud=5461&ss=7&cb=74067

ABC, CBS, Fox and NBC likely missed out on airing more than 200 episodes of scripted series in the fall, and in a lot of cases, what aired in place of those missing shows fell short of the ratings scripted shows generate.

On the surface, ABC and NBC are in the best shape after the fall: ABC is the only network to improve year to year, while NBC is off by about 4 percent in total viewers and adults 18-49 and by about 7 percent adults 25-54. Both networks, however, got there with a heavy dose of primetime football. ABC aired a full season’s worth of Monday Night Football alongside ESPN, averaging better than 10 million viewers for its telecasts — more than double ABC’s seven-day average of 4.13 million viewers for Monday nights last fall. (All ratings figures cited in this story are through Dec. 10 and don’t include streaming.)

NBC’s Sunday Night Football, meanwhile, is averaging about 19.6 million viewers per game since the official start of the broadcast season, up 10 percent over the same point a year ago. A full slate of Big Ten and Notre Dame football games on Saturday nights also improved that night by more than a million viewers year to year.

CBS and Fox, which don’t have weekly primetime NFL games, have slipped by 32 percent and 26 percent in total viewers vs. last fall, and they’ve lost double-digit percentages among adults 18-49 and 25-54 as well.

Primetime ratings that exclude news and sports, meanwhile, paint a darker picture. ABC goes from up by about 15 percent among all viewers to down by 6 percent (with the aforementioned Golden Bachelor and Dancing With the Stars helping avoid a bigger slide). NBC is off by 15 percent, and CBS and Fox each fall by more than a third year to year.

CBS has suffered the most, as it relies more on comedies and dramas than any of its fellow broadcasters. The network unveiled a business-as-usual schedule in May before having to tear that up and fill in with unscripted shows, reruns and imports from both its Paramount Global brethren (Yellowstone and SEAL Team) and overseas (the British version of Ghosts). Assuming CBS would have scheduled its original lineup in much the same way it did in fall 2022, the network lost about 130 episodes of original scripted series in the fall — a huge reason for its 37 percent drop in viewers for its entertainment programming.

At Fox, an all-unscripted weekday lineup brought in diminishing returns, even compared to other unscripted shows last season. Snake Oil — the network's Shark Tank-but-some of it's fake game show — falls 11 percent behind the performance of Lego Masters last season in the Wednesday spot following The Masked Singer (which is itself down 16 percent in viewers from the fall 2022 edition). And while it was never likely that the return of Kitchen Nightmares would come close to matching the performance of Fox's top drama last season, 911, Fox had to be hoping for better than a 73 percent drop-off in viewers (2.05 million for Kitchen Nightmares vs. 7.47 million for 911 — which, incidentally, is moving to ABC in the spring).

Even in places where fill-in programming performed reasonably well, the gaps are noticeable. Episodes from early seasons of Paramount Network's Yellowstone have averaged 4.85 million viewers over seven days for CBS, ranking fifth among all scripted offerings on the networks in the fall. Yet that's still 45 percent less than what The Equalizer averaged (8.83 million viewers) following 60 Minutes last fall.

Similarly, NBC's Quantum Leap update — which continued production after wrapping its first season and has had a full complement of episodes this fall — has held up reasonably well compared to last season. It averages 3.91 million viewers per episode over seven days, about 10 percent behind its performance last fall. But Quantum Leap is airing in the Wednesday time normally held by Chicago Med — which averaged almost 8.7 million viewers over seven days last fall.

If there's a bright side to all this, it's that networks will be bringing back their usual scripted lineups during some of the heavier TV use months of the year — January and February are typically when scripted shows hit some of their highest marks of the year. Pent-up demand for returning favorites could lead to a spike in viewers, at least to start. But network viewing outside of live sports was already in a years-long decline as streaming became the default option for a plurality of TV users. The (welcome) return of a bunch of series won't fully reverse that, nor will it make up for a mostly lost fall.

 

[wabbott]

https://deadline.com/2023/12/disney...ootball-playoff-2023-media-rights-1235680121/

Disney Nears Advertising Sellout In 10th Year Of College Football Playoff; Season’s Viewership Surge Precedes Expansion Of CFP Field, Negotiations For New Media Rights Deal

By Dade Hayes - Business Editor @dadehayes December 29, 2023 - 7:30am PST

EXCLUSIVE: With the 10th edition of the College Football Playoff set to cap off a high-rated season starting on New Year’s Day, Disney says advertising inventory is nearly sold out for the semifinals and championship.

“We have a lot of consistency with brands,” Deidra Maddock, VP, Sports Brand Solutions, Disney Advertising, told Deadline in an interview. “Not even in just the August-to-January window, but on a year-to-year basis.” Of the 15 official ad partners for the CFP, she added, 13 have had a presence for multiple years and scatter buys are relatively limited. “When brands are making this commitment and knowing that this is a space they want to be in, it’s not a ‘Hey, let’s dip our toe in the water and try it out.’ This is something that they’re investing in.”

The level of buy-in is a welcome development for Disney as a challenging 2023 winds to a close. Linear TV advertising remains soft across the broader industry, and uncertainty about distribution for all TV programmers has followed the media giant’s bruising fight with Charter Communications last September. ESPN is readying a stand-alone streaming version of its flagship network for launch by 2025, which could complicate the balancing act. Disney CEO Bob Iger, who said last summer that linear TV “may not be core” to the company, later reaffirmed that networks offer “a means of aggregating audience and amortizing costs, of basically reaching more and different people.”

College football comprised a large chunk of ESPN’s $3.6 billion of advertising revenue during fiscal 2023, a tally that came in flat compared with the prior year. (Ad revenue across all of Disney totaled $11.5 billion.) Measurement firm EDO’s research found viewers to be 3% more likely to search for brands shown during games on ABC/ESPN compared with viewers of rival broadcast and cable networks in primetime. On social media, college football content registered a 7% increase in average daily unique users over 2022 levels, with healthy gains in minutes spent, page views and visits. Advertisers on college games, EDO found, get a return equivalent to nearly six ad units on competitive networks during prime time.

Viewership has been strong, with only the NFL proving a bigger draw. Fox aired the year’s top telecast, Michigan vs. Ohio State, which attracted 19.1 million viewers in November. Across linear and streaming, Disney recorded its second most-watched regular season since 2016, averaging nearly 1.7 million viewers per game across ABC, ESPN, ESPN2 and ESPNU, including 21 of the top 50 games overall. ESPN+ posted record numbers, with unique viewers and minutes of viewing climbing a respective 3% and 8% over last year.

The CFP semifinals on Monday will see Alabama play Michigan and Washington face Texas, with the championship game following on January 8. Surging viewer and sponsor interest led college football powers that be to enlarge the field of playoff teams from four to 12 in a new format starting a year from now. That dramatic expansion, whose details are still coming into focus, will introduce more rounds of games and potentially a more open feel akin to college basketball’s March Madness.

The shift also coincides with an expected change in media rights. Disney/ESPN is in the 10th year of a 12-year, multi-billion-dollar deal for the CFP. It will carry the quarterfinals, semifinals and championship game through 2026, but preliminary talks have begun in recent months for first-round games in 2024 and 2025 as well as the full package starting in 2026. Multiple media and tech companies have looked the new scheme, with the floor for rights fees reportedly expected to rise sharply from the level Disney pays under its current deal. (Regardless of how the playoff rights talks go, Disney next summer kicks off a period of exclusivity with the Southeastern Conference, a perennial ratings power.)

Asked about the new dynamic of a 12-team playoff field, Maddock said, “What I can say is that we’re all excited about the future” of what she termed “the next big thing” for the sport. For the moment, there are many unknowns and questions in terms of the schedule and process for choosing the 12 teams. “As we soon as we have those answers and can engage with [advertisers], we’re going to be doing that,” she said. “I’m anxiously awaiting, like everybody else.”

As tribal and regional as college football fandom can be, Maddock said its national value for advertisers remains strong despite the makeup of the playoff field. This year’s final quartet generated controversy after the selection committee opted to leave out Florida State despite the Seminoles having had an undefeated regular season. Among the four teams left, only Michigan and Washington are undefeated.

“The college football fan base, regardless of where you are in the country, tends to be very passionate and committed,” Maddock said. “That’s the mystique and the fun of live sports, that ‘any given day’ mentality and who shows up. The degree of competition and the parity of competition across a large swath of schools now is remarkable.”

 

[wabbott]

https://www.hollywoodreporter.com/b...ds-elusive-goal-streaming-profits-1235668620/

Hollywood’s Elusive Goal This Year: Streaming Profits

Aside from Netflix, only Warner Bros. Discovery, via aggressive cost-cutting, has shown the ability to hit a profit in its direct-to-consumer division.
December 29, 2023 - 7:39am PST
by Georg Szalai

“So You’re Sayin’ There’s a Chance.” Wells Fargo analyst Steven Cahall channeled a famous line from Dumb and Dumber in the title of a Nov. 3 report, in which he analyzed how Hollywood giants and their investors started off the final earnings season of 2023 with the hope that it would provide proof that the sector was finally making progress towards streaming profitability.

“This earnings season feels like a potential shift for direct-to-consumer (DTC),” Cahall wrote even before sector powerhouses Warner Bros. Discovery and Disney had shared their latest quarterly results. “DTC trends this earnings season indicate a potential earnings inflection. It’s potentially a fundamental moment that makes media more investable longer-term.” But he argued it was “too early to call it a turning point, too important to call it nothing.”

With the latest quarterly results all in and the year coming to an end, entertainment companies’ streaming losses for the first nine months of 2023 are indeed mostly down compared with the same period in 2022. But only one company is showing a streaming profit year-to-date before final quarterly results are reported in early in 2024. Wall Street will keep a close eye on progress in the new year.

Early on in the final earnings season of 2023, Comcast’s NBCUniversal said it grew its subscribers to streamer Peacock to 28 million as of the end of September. And it shared improved 2023 financial guidance for Peacock, lowering its previous “peak losses” estimate for this year from $3 billion to $2.8 billion. Plus, while streaming losses for the January-September period grew compared to the same period in 2022, losses related to Peacock narrowed to $565 million in the third quarter from a year-ago loss of $614 million, marking a turning point after a period of growing quarterly losses.

Meanwhile, Paramount Global grew its global streaming subscribers to 63 million and predicted narrowed streaming losses for 2023 compared with 2022. “We continue to execute our strategy and prioritize prudent investment in streaming while maximizing the earnings of our traditional business,” CEO Bob Bakish told his earnings conference call. Highlighting that his team expects streaming losses this year to “be lower than in 2022,” he touted: “streaming investment peaked ahead of plan.”

At the end of Hollywood earnings season, Disney reported its latest narrowed quarterly streaming loss and cut its calendar year 2023 year-to-date losses in half, while it grew its core Disney+ subscribers to more than 150 million.

Disney CEO Bob Iger touted his restructuring efforts as helping drive the improvements. “Our new structure also enabled us to greatly enhance their effectiveness, particularly in streaming, where we’ve created a more unified, cohesive, and highly coordinated approach to marketing, pricing, and programming,” he said on the earnings call. “This has helped us improve operating results of our combined streaming businesses by approximately $1.4 billion from fiscal (year) 2022 to fiscal 2023 (ended in September). And we remain confident that we will achieve profitability in the fourth quarter of fiscal 2024.”

So far, only Warner Bros. Discovery has managed to turn a profit in its streaming business over the course of the first nine months of this year, swinging from a loss of $1.85 billion for the January-September 2022 period to a $158 million for the first three quarters of 2023 and saying it would break even or even post a profit for all of 2023. The conglomerate ended the third quarter with 95.1 million global streaming subscribers, down from 95.8 million at the end of the second quarter.

“Only 19 months into the combined operation as Warner Bros. Discovery and a few months after the launch of Max, we are now on track to at least break even or even (be) profitable across the DTC segment, to swing up approximately $2 billion versus last year and very well ahead of our own plan,” WBD CFO Gunnar Wiedenfels touted on the company’s Nov. 9 earnings conference call. “This is an incredibly valuable asset and provides a strong vantage point for our path to long-term sustainable growth.”

Macquarie analyst Tim Nollen noted in a Nov. 13 report some negative trends won’t allow entertainment giants and their investors to celebrate much. ”The third quarter marked the third consecutive quarter of nearly 10 percent year-over-year linear pay TV sub declines as cord cutting continues,” Nollen pointed out. And media networks “posted another 12 percent average decline in linear ads, which is continuing into the fourth quarter, so the question becomes when and by how much will this recover?” he noted. “We expect underlying ad growth to remain negative in ’24 excluding major sports.” His conclusion was to cut earnings estimates and stock price targets across the entertainment sector, warning: “Life is tough for media networks when ad spending falls.”

MoffettNathanson analysts Michael Nathanson and Robert Fishman were less bullish on Hollywood’s streaming efforts. Sharing key takeaways from their latest L.A. visit in a report, they noted: “For much of the past four years, the entertainment industry spent money like drunken sailors to fight the first salvos of the streaming wars. Now, we are finally starting to feel the hangover and the weight of the unpaid bar bill. As a result, Netflix has been crowned victorious and the shakeout among the other combatants has begun.”

Nathanson and Fishman also argued that Disney has “amassed decent scale” in streaming, which the experts see as key to long-term success. “With its Hulu negotiations soon to be behind it, management will hopefully soon be free to proceed with a clearer strategy to capitalize on that scale,” they suggested.

But for now, they summed up the state of the streaming video space this way: “The Streaming Wars are over, and Netflix has won. While this has likely been the case for at least the past year or two, it has never been more clear from all our conversations around town.”

Why? “To date, only Netflix has succeeded in coming out the other side of deep investments with sustainable, cash-flow-positive scale,” MoffettNathanson analysts explained. “Whether due to rising interest rates, poor management/execution, or simply not being first, no other service has emerged from that trough, and there is growing uncertainty any will – at least not in a form currently recognizable.”

However, industry firm Ampere Analysis has predicted that “a significant turnaround for studio direct streaming is just around the corner, with all major studio streaming divisions (excluding sports operations) set to turn a consistent profit within 18 months.” In a Dec. 20 report, the research firm suggested: “The scene is now set for the streaming businesses of Disney, Warner Bros. Discovery, Paramount and NBCUniversal to head achieve consistent quarter-on-quarter profitability with the narrative switching from ‘when will studio streaming make money?’ to ‘who will get there first’?”

The firm’s analysis here focuses on “consistent profitability, taking into account income from subscription and advertising against content costs, staff and marketing costs, depreciation and amortization to predict the point that businesses reach consistently positive earnings before interest and tax (EBIT),” it explained.

Ampere predicts that Disney is likely to get there first, as early as calendar first quarter of 2024, which would be two quarters earlier than the company itself has predicted, “Warner Bros. Discovery will be a close second, reaching consistent profitability by calendar third quarter 2024, with both Paramount and NBCU not far behind, achieving the goal by the first quarter of 2025.”

And the research firm forecasts: “By 2028, studios will earn between $1 billion and $2 bllion EBIT a year from streaming based on current market footprint alone. Additional geographic expansion would lead to even more upside.”

Ampere executive director Guy Bisson noted, “With studios now able to position streaming correctly as a profit-making direct subscription window that is complimentary to theatrical exhibition, transactional and free television, sectors that had previously been deprioritized, should also see a boost. The rationalization of streaming is already seeing renewed support among studios for the theatrical window and revisiting of the content licensing model.”

 

[wabbott]

https://www.msn.com/en-us/money/companies/hollywood-s-box-office-recovery-needs-rewrite/ar-AA1mcdZa

Hollywood’s Box Office Recovery Needs Rewrite
Aftermath of labor strikes, superhero flops complicate outlook for movie industry in 2024

By Dan Gallagher
Dec. 29, 2023 - 6:30 am EST

2023 may be over, but Hollywood’s painful reckoning isn’t—especially at the box office.

This year’s holiday season has largely been a lump of coal for the movie industry. Domestic box office receipts for the season starting the first week of November have barely crossed the $1 billion mark. That is actually below the same period in each of the past two years, which had been helped by the release of mega-blockbusters like “Avatar: The Way of Water” and “Spider-Man: No Way Home.” It is also less than half the $2.3 billion average for the holiday season in the prepandemic years of 2015 to 2019, according to Box Office Mojo.

There are a few reasons. The Hollywood labor strikes that shuttered productions from May through mid-November resulted in several big releases being shifted out of the latter half of 2023. And the once-bankable superhero genre has been slipping, with the waterlogged performance of “Aquaman and the Lost Kingdom” being just the latest example. The movie grossed just $27.7 million on its Dec. 22 opening weekend—less than half of its 2018 predecessor and the fourth consecutive movie in Warner Bros. Discovery’s DC franchise to make a disappointing debut.

That came just weeks after Disney’s “The Marvels” scored the weakest opening ever for the Marvel franchise. And it hasn’t improved with age; “The Marvels” now has barely passed the $205 million mark globally after nearly two months in theaters. No Marvel movie has ended its theatrical run with a global box-office gross of less than $370 million since Disney acquired the studio in 2009, according to the movie industry tracking site The Numbers.

The year wasn’t all misfires. Moviegoers turned out for familiar brands like “Barbie” and “Super Mario” that have so far gone untapped by Hollywood, while the surprising success of the three-hour “Oppenheimer” biopic shows challenging material can also find an audience. Still, the weakening of two superhero franchises that together have generated more than $36 billion at the global box office makes a noticeable dent. With less than a week remaining in the year, 2023’s domestic box office total is a little over $8.7 billion, up 18% from the previous year but 23% below 2019’s total, according to Box Office Mojo.

That isn’t a great sign for an industry still recovering from the disruptions of the pandemic and the booming growth of streaming. The aftermath of the labor strikes will also last well into the new year. Several analysts now expect 2024’s domestic box office to be lower than 2023’s, given the changes to the release schedule that also resulted in some 2024 films being pushed out to the following year.

And much of the 2024 schedule is still unclear. In a Dec. 18 report, Morgan Stanley analyst Benjamin Swinburne projected that 30 wide-release films will be added to the 2024 schedule during the first half of the year. “In our view, it is up to film supply to match theatrical demand for box office revenues to converge toward prepandemic levels,” he wrote.

That has Wall Street already looking toward 2025 for things to finally improve for the industry. Alicia Reese of Wedbush projects the domestic box office will reach about $9.7 billion in 2025, up 12% from 2024 and about 15% below the prepandemic average of about $11.3 billion annually. Consensus estimates for theater chains Cinemark and AMC Entertainment reflect a similar trend—a drop in admissions revenue in 2024 followed by double-digit growth in 2025.

Swinburne thinks the industry can return to something close to pre-Covid levels in 2026, though he acknowledges that much remains unknown about the release pipeline that far out. Given the two- to three-year turnaround time for most big-budget movies, 2026 would be the first year to see how well Hollywood has absorbed the brutal lessons of 2023. Hopefully, “Barbie” won’t be on her fourth sequel by then.

Write to Dan Gallagher at dan.gallagher@wsj.com

 

[RivShore]

Ampere predicts that Disney is likely to get there first, as early as calendar first quarter of 2024, which would be two quarters earlier than the company itself has predicted, “Warner Bros. Discovery will be a close second, reaching consistent profitability by calendar third quarter 2024, with both Paramount and NBCU not far behind, achieving the goal by the first quarter of 2025.”

Profitability in fiscal Q2 would be a nice surprise!