A DealBook task force debated where and how the film, television and theater industries can make money from their productions.
This article is part of our special section on the DealBook Summit that included business and policy leaders from around the world.
Moderator: Brooks Barnes, Hollywood reporter, The New York Times. Participants: Gail Berman, chairman and chief executive, the Jackal Group; Aryeh Bourkoff, founder and chief executive, LionTree; Chris Cocks, chief executive, Hasbro; Scott Galloway, professor of marketing at NYU’s Stern School of Business, author, founder, Prof G Media; Liz Garbus, director, producer, co-founder, Story Syndicate; Michael R. Jackson, playwright and composer-lyricist, the Living Michael Jackson, Inc.; David Linde, chief executive, Participant; Charles Rivkin, chairman and chief executive, Motion Picture Association; Stacy Spikes, chief executive, MoviePass; Cyma Zarghami, founder and chief executive, MIMO Studios.
The entertainment industry is awash in content. That much was agreed on. Whether that content amounted to a golden age of creation or an age of gilded excess, where a focus on quantity has hurt quality, was hotly debated by a task force of entertainment industry executives convened by The New York Times at the DealBook Summit in New York last month.
“This is a golden age for content artists and storytelling,” said Scott Galloway, a professor of marketing at New York University’s Stern School of Business and a popular podcast host. “Netflix is going to spend more on content this year than all content on television and in the movie theaters for the entire 1980s.”
But Michael R. Jackson, a Pulitzer Prize-winning writer, vehemently disagreed.
“What you’re describing as a golden age to me is like an anti-golden age because I actually think that quite a lot of quality is degraded because there is such a glut,” he said. “I want more discernment. I want more quality controls.”
Mr. Jackson quipped that he wanted “to make gatekeepers great again.”
The 10-person task force, moderated by Brooks Barnes, The New York Times’s Hollywood reporter, sought to answer the question: What is the future of entertainment? They came at it primarily from three points: content creation; platforms, such as streaming services and movie theaters; and financial models that provide the right incentives and rewards for seeing a project through.
As it often does, the discussion about content pivoted to TikTok, with task force members expressing a range of strong feelings about the social media platform.
Speaking from the main stage during the conference, Treasury Secretary Janet Yellen had called TikTok a natural security threat. Mr. Galloway agreed, calling the Chinese-owned app “the ultimate propaganda tool.”
“If all of a sudden Disney Plus, Hulu, Netflix, HBO Max were all owned by a Chinese company, meaning, the C.C.P., would we be down with that?” he asked, referring to the Chinese Communist Party. “I think that’s what we have here.”
Yet others on the task force saw TikTok as a way to bring in new viewers, not cannibalize or replace the existing audience.
David Linde, chief executive of Participant, a production company, said a junior employee had pushed to use TikTok to promote one of their films, “Judas and the Black Messiah.” “We put it out on TikTok, and a million people watched it in, I don’t know, a couple of hours or something like that, which is tremendous reach,” he said.
No one suggested that watching a 90-minute film in 25-second bites on TikTok would be good. But discussing new and different content forms led to a robust debate about whether streaming services were a legitimate alternative to theatrical releases or if releasing through steaming services was warping the form content was taking.
Gail Berman, who has run a film studio (Paramount) and a television network (Fox Broadcasting’s entertainment division), took the view that the art needs to fit the form. Through her production company, the Jackal Group, she has had success this year with the film “Elvis” in theaters and the Addams Family series “Wednesday” on Netflix.
“How do I get into a marketplace, whether it’s eight episodes or whether it’s a film?” she said. “How do I find my way into an audience that I have something to say to, that the artist I’m working with has something to say to? My ability to make money and a living from that is really a challenge that is so difficult.”
Mr. Linde cited the film “Roma,” which won the Oscar for best foreign film in 2019, as an example of how some films might have dual releases in theaters and on streaming services.
“Being in theaters is very important for certain filmmakers,” he said. “By choosing to not pursue a theatrical perspective, are you eliminating the opportunity for your company to be in business with a filmmaker that you want to be in business with? It’s possible.”
A hybrid release, though, is difficult since many movie chains require a gap of several months before a film can be released to a streaming service.
Charles Rivkin, a former diplomat who is chairman of the Motion Picture Association, took the long view. “So many things were going to destroy our industry from the very beginning of·time,” he said. “VHS was going to destroy everything, but, you know what, we’re going to be OK.”
Beyond art and distribution, the question of how everyone along the entertainment spectrum can make money drew out concerns about present models.
Both Mr. Linde and Ms. Berman said groups that haven’t always been aligned — like actors and producers — are hoping for a strike in Hollywood. It might allow for a reset and a rethinking of how revenue has been earned and distributed, they said.
One facet is how streaming services pay for content, which is different from an older system in which key players were given so-called “back-end deals” — allowing them to collect residuals on shows and movies for years after they were released.
“I produced a show called ‘Buffy the Vampire Slayer,’ a show called ‘Malcolm in the Middle,’ a show called ‘Angel,’ all of which I owned a piece of the back end on,” Ms. Berman said. “That was valuable to me and my family, and that’s a valuable asset in determining hey, if I get this right, if I really just put all of these pieces together, not only will I get an episodic fee, but this could go the distance.”
(Outside of the room, on the main stage, Ben Affleck, the Oscar-winning actor, argued for greater control and financial benefits for creators and against the Netflix content-creation model. “You want to have your work seen,” he said. “No one in the entertainment world wants to play to an empty house. But you can’t make 50 movies a year and get quality.”)
In the end, many said, much of this will be decided by consumers. “The most successful media are the digital ones that have multiple shots on goal,” said Aryeh Bourkoff, founder and chief executive of LionTree, a merchant bank and investor. “You have to give the consumer a lot to choose from.”
For the producers, particularly the streaming services, turning a profit is going to be key in 2023, he said. “We’re into age-old metrics of profitability, as boring as that sounds.”
Takeaways
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Establish an Identity: Streaming platforms are going to have to distinguish themselves and be identifiable the way MTV and Nickelodeon once were.
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It’s Now Profitability Over Volume: 2023 is going to be the year when streaming platforms need to show profitability — and maybe rethink their revenue models.
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Change the Compensation Model: The options for distribution are vast right now, but creators and producers are set to push back on how they’re compensated for content.
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