May 19, 2021
The big news this week is that the Big Boys are Swingin’ their cash around, as Discovery makes a deal with AT&T for WarnerMedia, and as I write this, Amazon is reportedly making an offer for MGM. I allude to this crass saying to open this article on purpose because it’s the only way I can view all of this merger news – in that old fashioned sense of big, important, white men, playing golf and making deals just to show who’s the boss, who has the gravitas to take the big swing… but also doing so while not realizing they’re at the end, not the start, of the game, and they’re out of touch with where society is now and where it’s going.
 It's crazy how the press takes the same "swaggering" approach to this as the executives themselves. I can’t bother to go find all of the sources, but many outlets said things like Zaslav is getting in “fighting shape” for this deal. Or they fawned over the “pioneer” of deals and tax avoidance, John Malone, and his making a Reverse Morris Trust deal. Or how Zucker is some “hard charging” bull ready to knock out Kilar. While tweeted emoji’s of missed golf games got more ink than the significant debt load ($55B+) Discovery will be burdened with after the transaction. And now, as I’m writing this piece (May 17), the NYT drops this doozy that starts with “It’s the law of the Hollywood jungle. The biggest cats win.” And goes downhill to swaggering, chomping, alpha discussions, knives in backs, “tour-de-force who goes by Zaz and is often outfitted in an outdoorsy vest,” “cable cowboy(s)” and can only deign to call Kilar a disruptor. Jeesh.
It’s a bit mind-boggling to consider that John Stankey somehow spent $67 Billion to buy DirecTV, sold it at a $50 billion+ loss, then spent another $85 Billion for Time Warner, and will get just $43B back for it - and ownership in a company some value above $100B, but seems like it will make just $41B in sales each year (based on combined sales in reports) – and He. Still. Has. A. Job. Sure, Randall Stephenson was the CEO before him, but Stankey was the chief merger architect of all of this (that was his actual title). As The Information put it, he “spent $126 billion and assumed billions of dollars more in debt on two deals that will go down in the history of corporate America as among the most ill-conceived pair of acquisitions ever.” Even more mind-boggling when these same reports say that AT&T wasn’t interested in spending the $20B or more needed each year to compete with Netflix… but they lost more than that – plus what would be needed for a few years - in these transactions alone.
Does any of it make sense? I don’t f-n know. But I know it makes a hell of a lot more sense than AT&T pretending it understands entertainment. As more than one person has said – who the hell thinks people become cell phone customers to get a deal on HBO? But will they sign up for a streaming service that combines the high and the low? Of course they will, that’s cable, and since we’d all be paying more for all of these streamers than we did for cable, some consolidation is necessary (see more on this in the news below). That said, I just can’t wrap my head around how Zaslav, the King of giving the masses what they want with HGTV is gonna somehow not ruin a gem like what’s left of HBO.
Everyone says that Kilar was focused on giving the customer (audience) what they want – convenience – over serving the needs of the industry, which was true. But while Zaslav may be more focused on what the industry wants (and money, and power), he knows what most audiences want – more reality and unscripted TV. I guess the best way to look at this is that it’s the best of all worlds – get your popcorn entertainment (Godzilla Vs. Kong), your background noise (HGTV), your guilty pleasures (I don’t know? Is that what 90 Day Fiancé is? I can’t watch this shit), and your prestige shows (Succession) for one low price.
That does look brilliant for a minute. But you know what beats that? All of the above, plus James Bond, plus free shipping. And that’s what Bezos is swinging as he buys up MGM. Pretty smart for a man who moved his company into movies just to hang with the cool kids and find a fancier wife. I think we'll find out soon (within five years?) whether a content company can survive without being tied to something much bigger. My bet is all of these will be owned by Apple, Amazon, Google, Facebook and/or someone new in that space, but for now, consolidation is king.
That's why, with all of that said, I think I come down on the brilliant side of the guess here, just because at least someone is thinking big about the future. The war for all of our attention is not going to be won by thinking small. And the competition is not really between CBS and NBC (who may merge next), as much as it is between all of these content providers – and all filmmakers - and Facebook, TikTok, gaming and everything else that wants some part of that attention. Hell, even I would rather have just one big celestial jukebox (with one big caveat), where I pay one price for all the music, film and TV I want (along with free shipping), and we may get that when all of these side deals collapse into one big conglomerate.
But that big caveat is that I want a wide diversity of my interests represented in that one service, and history tells us that those plethora of options soon narrow down to the lowest common denominator, and Discovery is itself the epitome of that historical truth. Merge that all together, and you won’t be getting the prestige along with the guilty pleasures anymore. We’ll likely end up with just a steaming pile of crap reality tv. There may temporarily be room for arthouse, indie and specialized content, but not for long.
During the height of Covid, I started making the case to anyone and everyone who would listen that we needed to think similarly big in the indie world, and try to build some kind of conglomeration of the good stuff, so we had any kind of home in the future. I never could get that heard by the right ears, to be honest, but we’re already seeing the pillars of the arthouse world being sold off for parts (see Arclight, etc.), and we’ll see more of that soon. But by the time the arthouse film world wakes up to this reality, it will probably be too late to salvage much of anything.
But maybe I’m a dinosaur too. All of these big swingin’ d-cks are going around merging, tossing around the Warner football, and trying to compete, when it’s so clear that the audience, the culture has moved on. What kid do you know who wants to watch any of this shit? They could not sit down and watch a show, much less a film, to save their lives, but they’ll TikTok, Roblox or play games the live-long day. But there’s a better chance of winning some of them over to HGTV than there is TCM or A24, much less KinoLorber, or anyone else making or distributing the stuff I – and presumably you – like.
 That was the essential argument of most people I spoke with earlier - there will be room for a handful of major “content” companies in the future, but not much for anything that smells like theatrical, arthouse, indie or specialized. Of course, rules are made to be broken, and we should zig when others zag – as I’ve argued here before. And I hold up the hope that just like the buffets of Sizzler & Golden Corral in the food world disappeared as foodies discovered the delight of small, specialized restaurants, so might we all turn away from Amazon for NoBudge… But if I had to place an actual bet on where we’re going next, I’m not sure I can place it on what I want to see vs. what I seem to be getting. Kinda like John Stankey (but woefully underpaid for my thinking in comparison). Maybe I need an “outdoorsy vest,” cause that's what the winners seem to wear.
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Film
Diaspora Launches: DIASPORA, is a new Hollywood “trade adjacent,”online publication that "will be the voice for marginalized communities in film, TV and media shining a definitive, authentic spotlight on people of color, the LGBTQIA+ community, women, the disabled community and other historically underrepresented voices." The new site launched on Monday, May 17th, 2021 and already has a great article on the founding of M88, and more. The site is being launched and run by GLAAD Media Award winner and Gold House A100 honoree and former Deadline editor Dino-Ray Ramos.
Post-boom SVOD slowdown expected, but bundling and discounting can sustain growth: V-Net Reports. Growth rates of subscriptions to streaming services boomed during the Pandemic but are expected to drop substantially in 2021. Recent findings show that ¼ of U.S. households use 5+ SVOD services which equals a lot of money for consumers. The solution is bundling: “as more homes take more services, we are clearly reaching the point where we hit a ceiling and the growth will stop. The question is how we break through that ceiling, and one way is for platforms to seize the opportunity to combine services.” I wonder if AT&T and Discovery read this first!
SVoD players target older viewers: According to Advanced Television, streaming services are actively targeting viewers aged 35 + in their content commissioning strategies. Findings show that "this audience enjoys documentaries, drama and crime and thrillers, which are now amongst the VoD players’ top five commissioned genres... In March, Netflix ordered more documentary titles than any other genre – over half of these were in the true crime category." Ampere consumer researchers suggest VoD use a 3-pronged approach in order to attract 35+ viewers: streamers must invest in factual crime/thriller content, expand sports-related content including sports documentaries, increase local language programming. Note that they didn't mention indie or arthouse cinema in there, but those are also a big draw for the older audience.
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Branded Content
Branded Content Is the Path to Gen Z in 2021: According to Jing Daily, “Key Takeaways: Brands are allocating more digital marketing resources to branded content that can directly reach and influence young consumers. Instagram, TikTok and other platforms are investing in helping creators monetize their online efforts. By funding short branded programs and inserting themselves into the narrative, brands can create (and bask in) a more Gen Z-palatable aura.” Another interesting comment on brand-funded content: “It’s not difficult… to imagine a TikTok series starring both popular TikTok creators and musicians, jointly funded by a brand and a record label, with ample opportunities to insert background music and links to Spotify or band merch pages.”
Lessons on TikTok from the NewFronts: Digiday reports on key takeaways from the NewFronts, but what was most interesting to me was this info from the TikTok presentation: Brands must understand the cultural norms, community trends, and shift marketing to match those trends. Brands should have faith in TikTok creators to build user trust. TikTok is not just a space for young people. TikTok may be targeting marketers who want to reach older audiences. And apparently - "30% of TikTok users in the U.S say they consume less video content (TV, streaming, other) since joining TikTok." That's not good for the streamers!
Instagram is working on creator shops and a 'branded content marketplace' for influencers: Endgadget Reports: Creator Shops would help businesses create online storefronts and more easily sell products on Instagram. Instagram is working on getting Instagram influencers paid for promoting products. The branded content marketplace would help match influencers with sponsors. “Zuckerberg noted that such a tool could help enable up and coming talent to monetize and help create a kind of ‘creator middle class.’” As of now, it’s difficult for instagram influencers/ up-and-coming stars to form partnerships with brands (these deals happen off the platform). A branded content marketplace would make it easier for influencers and lesser known rising influencers to make deals with brands. This will give Instagram more control over the creator ecosystem, and over what brands can/can't do, which may or may not go down well with either party.
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Miscellany:
The Three Letters Changing the Digital Experience: That would be N, F and T of course. My friend, GSU professor Elizabeth Strickler, who directs its Blockchain Lab and is the director of media entrepreneurship and Innovation at the university’s Creative Media Industries Institute gave a great TedX Talk recently on NFT's, digital art and what's ahead as we move into the future of these spaces. I'm a fan of where this is all going, but a skeptic on its current iteration, but Elizabeth makes some great points, and this is a good overall primer for anyone who wants to understand the space. Quick aside - in other NFT news, Fox announced a new NFT/blockchain created animated show w/ Dan Harmon as well this week.
Culture Vs. DNA: This fascinating NYT article on how different animals develop and share culture is a must read - from the chimp who started an ongoing fashion culture by putting grass in her ears, to how whales learned to adapt to whaling with new safety measures and ways to smash boats. But my favorite part was this comparison between DNA and culture: Culture “is another inheritance mechanism, like genes, ”Hal Whitehead of Dalhousie University, who studies culture in whales, said. “It’s another way that information can flow through a population.” But culture has distinct advantages over DNA when it comes to the pace and direction of information trafficking. Whereas genetic information can only move vertically, from parent to offspring, cultural information can flow vertically and horizontally: old to young, young to old, peer to peer, no bloodlines required." It gets even more fascinating when you start to think of how we'll soon be storing the data of our culture inside our DNA.Will that slow it down, or speed things up?
Shifting the Narrative: The Opportunity Agenda took a look at what causes narratives to shift in society, and has a report with five great case studies. They don't mean narrative as in narrative film, but rather how does society shape stories, and identify with them, and how do we effectively change those stories that are told? It's an important question to ask in many fields. They look at past successful efforts in five fields, and one of them includes a case study on Blackfish and how a documentary film could be used to change the story around the ethics of keeping animals in captivity. They're all a good read, and are highly recommended.
Free can Equal Billions: That's the takeaway from TechDirt on the Fortnite trial. During the Epic and Apple trial, it surfaced that Fortnite, a FREE game, made over $9B in 2 years. And how did they do that? By giving away the game, and then charging micro transactions (V-Bucks) to make in-game purchases to customize your character and game.
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