July 22, 2022
As we head into the height of Summer, with the world on fire literally and figuratively while everyone (or at least my colleagues) tries to take a vacation, we seem to find ourselves in a kind of weird fugue state. Nothing is happening while everything is happening. What is happening might not be remembered as part of reality come September. People are working while not working, while overworking while taking a nap. I swear it’s not just me, I hear this from others.
But in this fog, some sense of clarity can come through, usually fueled by conversations over a glass of rosé, and a few things start to come to my mind as trends. Or things I’d guess about, so I refer to them as reading the tea leaves, even though wine legs may be more appropriate. Regardless, here’s some thoughts on what I’m hearing from others, and thinking about as I think about what I might think more about post-Summer.
Pitching and Sales on Hold: Every conversation I have with a film person somehow gets around to how the market is not just dead, but nonexistent. On Thursday, I had two back-to-back calls where this came up – one top-level production company said they had a moratorium on pitching any of the streamers/buyers until September, when they hope the layoffs and changes at these places might settle and lead to more deals. Another financier said they had more than one project at Tribeca, nothing sold and their sales agent told them everyone is waiting… until September, for the market to open back up. These are just two examples from one day, but I hear this almost every day. I also read about it from the tech space and VC world, and as a board member of a startup, it’s come up many times – deals are not happening now, investors are on vacation, don’t even bother trying… until September.
Dreams of September vs. the Reality of History: That’s all fine and dandy, and I hope the same, but let’s think about September a bit. It’s historically when the market crashes. It’s when we’ll be hitting a bit more of the peak of some combination of inflation and an expected recession kicking into gear. And it’s when reality usually sets in. I’m not so sure we can wait on the promise of things getting better come September, but what the heck… we can all hope.
The tenuous nature of Fests and Nonprofits: Speaking of inflation and recession fears and all that, the film festival world and nonprofit arts worlds have had a rough couple of years and all think they are about to bounce back… come September. Very few of them are positioned to handle any kind of downturn in revenues (or attendance, ahem, variants, ahem). If September doesn’t live up to our dreams, it will be tough for everyone, but I suspect really bad news in festival world. Quick aside for those paying attention to the fine print – some other fest news will drop soon, as Sundance announces its new festival head, and I think the tea leaves are clear on who that will be from what name is not mentioned in this article on changes at the NYFF. They’ll inherit a fest also hit by financial turmoil, but with a lot of potential for a strong future. I'm not sure how many others can weather another storm.
Brands Moving Forward, for Now, with an increased focus on metrics and product sales: As I mentioned last week, I was just at the Elevate conference of brands making films and other entertainment. The mood was good, and business was taking place between hiking, zip-lining, and drinking sessions, and it seemed clear that for now, brands are investing in their “content” spend and still making inroads into true entertainment and film. At the same time, at the conference, and in conversations with my own clients and friends in this space, there’s a marked uptick in conversations about how we tie all of this fun stuff to real results, like product marketing and sales. Move Product. That’s the mantra, and what I keep hearing. Sometimes couched in language like – “how do we measure the impact of this in something beyond brand lift?” or “how do I convince my CFO to approve this stuff” as we head into the economy we all see coming in… September? I’ll make my prediction known now – the train will keep moving forward through the Fall and into the end of the year. But as we start seeing the results of what happens between Thanksgiving and Christmas – the X-ian retail year where all sales happen – we’ll start to see real cuts to this arena by Q12023, and it ain’t gonna be pretty. I suspect I’ll have a lot more company in the consultant ranks, too.
Netflix Gates Won’t Open Soon: In the film and episodic world, everyone is hoping Netflix will increase buying now that their results weren’t as bad as hoped, and as they gear up for AVOD. And the brand folks all hope that now that Netflix will have an ad-tier, this will mean access to their audiences via ads, but also that they will move into brand funded entertainment as well. Unfortunately, as hinted above, I don’t think things will get better soon on both fronts. The shake-out will continue into the Fall/Winter for all films/shows, and on the brand side, sure, you can throw some ad money into their Microsoft run ad network, but it will be a shitshow on true performance, and they are building an ad network divorced from their own originals system, so the brand relations won’t improve as quickly as they should. It’s a shame, because it’s such a no-brainer for revenue that doesn’t come from interruptions, but them’s the facts.
The FAST and AVOD Backlash Begins: Speaking of ads, the hottest thing in the biz right now is the rise of AVOD and FAST channels. If I hear one thing more often than the hope for a better September, it’s someone who is plotting the takeover of the ad-supported world of niche channels and content. Money is being made, people are switching from too many subscriptions to more free channels, and don’t mind the ads. Except… there are a lot of rumblings in the data. Audiences are getting sick of the “ad-load” at most of these places, meaning they are being interrupted from what they want to do as often as they were before they cut the cord. The placement makes no sense, nor does the frequency, the targeting, or much of anything else. Everyone’s cliché is that some customer in Podunk, IA wants to just plug in their new Samsung and watch some free shit, even if it comes with commercials. But Podunk has never been a real place, and the people who might live there are smarter than you think, and just as annoyed with the interruptions, and guess what else? Increasingly, the same types of folks live in both Manhattans (NY and Kansas). I suspect the rise of AVOD and FAST in 2022 will be replaced by late 2023 by the great backlash against them, which will couple with a slow-down in ad-spending post Holidays that will cripple parts (but not all) of the industry.
The Re-Evaluation of Streaming vs Theatrical, Events and Other: All of this will combine into a re-evaluation of the value of getting your “stuff” onto the major streamers, including SVOD, AVOD, TVOD, FAST, etc. Sure, it’s where everyone will be watching everything. But it’s also where you go to be lost in the queue, interrupted by ads, forgotten if ever found, and to guess about who is watching you where, how often, for how long, and to what impact (by any sense of the term). And as people slowly (very slowly) return to in-person screenings, we are rediscovering their value to build word of mouth – not that anyone involved in this sector ever forgot this. Sure, our disastrous response to Covid, and continued ignoring of the science of a mask, will keep many people out of theaters and events, and I am not arguing that streaming is not the future, but it’s becoming painfully obvious that no one will find your film or show, or hear about it, without some event-based, real-world launch tied to it. Especially if you aren’t the top original for that service, that week. I’m seeing evidence of more people in the traditional and brand film worlds waking up to this fact, but I suspect we’ll see more of it after we all come back from the Summer.
A lull before a storm, before a rebirth. That’s how I think about now and the coming year. We’re in the lull – the calm before the storm while everyone waits to figure out how bad it will get. Most people hope that gets sorted out… by September. But as I said above, I think we’ll have a bit more of a lull, and then the shit will hit the fan. I bet that happens around January 10th, when the end of the sales season reality hits (and the hopes for New Year’s sales), but maybe it will wait for the Q1 reports. Things will get nasty. But… it’s out of the chaos that the best ideas rise. Those ideas/projects are being built now. I might be wrong about the timing. Maybe we’ve gotten past the worst part and things will only tick upwards. Or maybe it will take longer to hit bottom. But I am sure that regardless of that timing, we’ll see new things emerge. I’ve always been a firm believer in the good that comes out of the turmoil. This is less a belief in capitalism’s tenets (I swear, believe it or not, I am politically left of Marx), but more a trust in the words of Bill Callahan – “Bury me in fire, And I'm gonna phoenix”… (trust me, it’s better if you listen).
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Film
Seven Ways The NYT Can Save Movie-Going and Add to Its Bottom Line: Ira Deutchman is a film distribution veteran (and producer, and professor, and mentor to me, and so much else) who recently started a blog/newsletter about the industry, and this week's post is a great example of his seemingly simple, a tad bit idealistic, ideas for the industry, This one is about ways the NYT could better serve its readers - in print and online - who care about/might discover movies, and also help the film business. I recommend checking out his article, and subscribing. (BN)
Snowflake Mountain Isn’t Just Pandering to Viewers on the Right. It’s Also Hinting at Where Netflix May Be Headed: Snowflake Mountain is one of Netflix’s newest wilderness reality shows… and it’s really bad. The premise: A group of city-dwelling, whiny young adults dubbed “snowflakes” must learn how to shed their “snowflake habits” by doing hard work, guided by ex-military white men from the backcountry. If the title wasn’t a giveaway, the show’s political leanings are made clear right from episode one, where one of the hosts revives racist stereotypes and complains that the campers “don’t want to earn anything, they just want handouts.” Judy Berman from Time writes that “The existence of Snowflake Mountain, with its pandering premise and dog-whistle bigotry, implies [Netflix’s] decision to welcome people offended by values like inclusivity and empathy….So does the fact that, following months of controversy over transphobic jokes in Dave Chappelle’s stand-up specials, Netflix has opted to not just double down on its support for Chappelle, but also air similarly transphobic material from Ricky Gervais.” The takeaway: Netflix has met its match in the streaming wars (note: their global head of TV wondered if Netflix was the underdog). In an effort to retain and grow their subscriber base, will Netflix try to please some audiences and risk alienating others? Check out the Time article for more details. (GSH)
U.S. Consumers Pay $1,600 Annually For Cable TV Channels They Don’t Watch: A new study estimates that U.S. consumers pay $1.6K every year for cable TV channels they never watch, “thanks to the dated, bloated, traditional channel bundle model (Karl Bode for Techdirt).” The study finds that while the average cable subscriber has access to 190 channels, they only watch about 15 of them “By paying $147 per month to watch only 15 channels [note: cable TV was $96 just three years ago], the average pay-TV customer shells out $9.57 per channel watched – an amount that rivals the monthly cost of most streaming services.” The takeaway here is that the TV industry is broken. MoffettNathanson, a research firm tells it like it is: “Many of the media companies have made conscious decisions to strip-mine their cable networks, shifting their best content to their streaming platforms. At the same time, they have raised prices relentlessly to offset declining viewership. Both strategies have alienated distributors, who are now more ambivalent than ever about trying to retain video subscribers who are themselves increasingly ambivalent about lower and lower quality video services for which they are asked to pay higher and higher prices.” (GSH)
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Branded Content
 Lego Is Releasing An Incredible Set Based On The Office: Lego just released an incredibly detailed set of The Office which I have to admit looks pretty amazing. But what’s cool about this project is that the set came to fruition because of popular vote (10,000 votes) through the Lego Ideas program which lets users submit concepts and vote for Lego products. It’s a pretty smart way to get consumers invested in a brand – to be able to easily pitch to/create with a brand is pretty special. Jay Peters for TheVerge has the news. P.S. Here’s my personal favorite Lego Ideas project, entitled “Jazz Quartet.” (GSH)
Nike's 50th Anniversary Campaign as a Masterclass: Nike recently (May) re-teamed with Spike Lee in his Mars Blackmon character for their 50th anniversary campaign, and updated it by including Zimmie, played by Indigo Hubbard-Salk, who brings a new voice to the series, essentially becoming the Mars of a new generation focused on the future. Jordan Kelley of BrandStorytelling wrote up a nice piece on how the campaign is a masterclass in how to reach multiple demographics, and part of the key to that has been making sure to roll-out the campaign across platforms in a manner consistent with those platforms. That means the TikTok version isn't a recut, but rather is made specifically for the format. And they did it all in a super smart way that engages multiple audiences and demos. I agree, and think everyone should check it out - not just brands, but also film marketers, etc. (BN)
T-Pain Partners With Lipton Iced Tea for new digital series: Rapper, singer, songwriter, producer-legend T-Pain recently partnered with Lipton Iced Tea to star in an episodic series called “Have Some Tea with Cousin T.” The series will feature T-Pain “spilling the tea” and having a good time with his family/community. The partnership also includes a campaign to support and restore local restaurants that have been severely impacted by the pandemic. Of note, this piece of branded content is pretty explicit about showcasing their brand (e.g. T-Pain will be going about his day with different Lipton products he likes.) Daron Pressley for BlackEnterprise has the news. (GSH)
Macmillan Cancer Support Launches First Original Branded Entertainment Project: Macmillan Cancer Support kicked off their first brand partnership with Channel 4 and Wonderhood Studios to create Super Surgeons: A Chance at Life, a 3-part docu-series that showcases the cutting-edge works of surgical oncologists and shows how cancer impacts people’s lives in ways we may not imagine. Macmillan is producing an additional 4 short films that tell the stories of survivors who went through Macmillan Cancer Support. One short tells the story of a deaf person living with cancer, while another is about a nurse who travels by land and sea to reach people living with cancer in remote areas. The series is being distributed internationally by BBC. More info here. (GSH)
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Miscellany:
 Meta Continues Its Push Into the A.I. Art Game, Allowing Users to Create Computer-Generated Images Based on Their Own Sketches: Meta AI is working on a research project called Make-A-Scene that aims to take text-to-image generators a step further by adding a human component. The models you probably have heard of let users type text-prompts into the generator to create AI art. But Meta’s model gives users the option to draw their own freeform sketch of a scene for the network to base its final image on. “You are literally dipping the brush in the mind of a machine and painting with machine consciousness,” one artist remarked after his experience using the program. The takeaway: Make-A-Scene allows for a more balanced “collaboration” between the artists and the AI. Vittoria Benzine for Artnet has the news. (GSH)
Meta Sued for Meta Name: Meanwhile, Meta is also being sued by Meta. Meta. Turns out there's another Meta who has been around since 2010, and who also works to build a metaverse for creators. You can read about it here on CNN, or on the real Meta's website. This may seem all too meta, but the original Meta has a case, is represented by a powerful firm, and it's pretty clear that one Meta will be paying the other mega. (BN)
Modern Art Was an Advertorial for Business: Alex Taylor has a new book out called Forms of Persuasion which argues that much avant-garde and modern art was not the vanguard of the political left, but a "collaboration between corporations and artists." I haven't read the book yet, but according to this review by Dominic Green in the WSJ, you can trace corporate ties to art of the time such as the Campbell's Soup series from Warhol, or Picasso with US Steel and Cor-Ten steel. Of course, this has been true with elite backing of artists from the Medici's, but here it helped push the legitimacy of the American corporation. It's also interesting to note that by the 70s, Taylor shows, corporations had decided it was easier to just sponsor the museums instead of the artists, or as Green says - "pay the organ grinder rather than the monkeys." Ouch. I'll be reading this one soon. (BN)
Kids and teens now spend more time watching TikTok than YouTube, new data shows: Since June of 2020, kids and teens are spending more viewing time on TikTok than on YouTube, new data shows. By the end of 2021 kids and teens watched an average of 91min/day on TikTok vs. 56 min/day on YouTube on a global basis. “The broader picture this data paints is one where the world’s largest video platform may be losing its grip on the next generation of web users”. What’s YouTube doing about the sudden tipping of the scales? Like Facebook, Instagram and Snapchat, YouTube is copying the short-form vertical video feed that resonates with TikTok users with their YouTube Shorts program. Paradoxically, TikTok has been pushing users to create and consume longer videos (we’re up to 10 minute videos on TikTok now. Previously users could only create 3-min videos). The phenomenon is called app-homogenization, which in my opinion, no one really wants….Of note, YouTube still ranks higher than other video streaming services (Disney+, Netflix, Amazon Prime, Hulu) in terms of minutes watched per day. Sara Perez for TechCrunch brings us the news. (GSH)
GSH = Articles written by Sub-Genre's Gabriel Schillinger-Hyman, not Brian Newman (BN)
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