| When I asked dozens of industry experts how they would fix Hollywood, I also asked them to make one prediction. A few key themes emerged. Bankers, after a very quiet 2023, will get a lot more active. The market for sports rights, hot for so long, will cool off. And Hollywood, fresh off an extended work stoppage, is going to suffer the first real contraction in output in more than a decade. I collected the most popular, interesting or provocative predictions and added a little context. If you think I missed anything – or have news – feel free to email me or ask for my Signal. Last year, I made the predictions and my track record was pretty good. I nailed everything save for one, but it was a big miss. - Merger mania. Big-media stocks will continue to decline, leading to at least one big merger or acquisition.
Paramount Global and Warner Bros. Discovery are already discussing a merger, so predicting that will happen feels too easy. And yet, consolidation will (again) be one of the dominant stories of the year. Paramount and Warner Bros. are the two most likely candidates among the traditional players. They are sitting on shrinking TV networks and unprofitable streaming services. (Warner Bros. says its streaming business is profitable, but that's because of HBO.) Paramount+ and Max combined account for less TV viewing than Hulu or Amazon. The two companies have lots of debt. "Probably the best job to have in showbiz next year will be investment banker," former Amazon Studios boss Roy Price tweeted Dec. 22. But if everyone agrees that companies will combine, no one can quite agree on who or what. Private equity would be a logical buyer for Paramount if interest rates were lower. Others have made predictions about Apple, Microsoft and Walmart buying media companies. (Don't bet on it.) The most popular merger combination is NBCUniversal and Warner Bros. NBC, owned by Comcast, has similar assets to Paramount – a broadcast network, a studio, cable channels, a kids' entertainment business. If any of these deals happen, you can expect that at least one streaming service will go away. But there are plenty of reasons to believe a deal won't happen. Is Comcast CEO Brian Roberts ready to give up control of his media business? Is the federal government going to let him buy another media business? Why buy a company like Paramount now when the price may go down still more? - Kevin Feige takes a sabbatical from Marvel to recharge.
There is a ton of chatter about imminent executive changes at Disney's film division, and with good reason. Three of the company's primary creative engines – Marvel, Pixar and Disney – are sputtering. Another, Lucasfilm, can't even say when it's going to make a movie. Disney CEO Bob Iger could blame his studio chief, Alan Bergman, who oversees those different divisions. But if he wanted to do that, you'd think he would have done so already. One person Iger can't blame is Kevin Feige, who oversaw the most successful string of movies in Hollywood history. The architect of Marvel Studios is already an industry legend. He's too young to retire, but might not want the challenge of rebooting Marvel after a rough couple years. (He could go in the other direction; a few people predict he will be the next CEO of Disney.) - The NBA will get a smaller fee increase than expected as the market for sports rights tightens.
The biggest sports media deals on the market right now are the NBA and the college football playoff, followed by the UFC. The NBA will be the bellwether: The league has made noise about wanting to triple its current deal, which is worth $2.6 billion a year. It's not going to get that. But will it double its money? Warner Bros. is expected to shrink its package to save money. That means the league needs a tech company (or NBC) to jump in. The NBA does have two cards up its sleeve: international rights and the in-season tournament. Remember when Spotify spent more than $100 million to get the exclusive rights to Joe Rogan's podcast — and its stock soared? That was back when Spotify was spending a fortune to make its service a destination for podcast listeners. Wall Street loved the move, which investors thought would help Spotify reduce its reliance on the music industry. Spotify is now a major platform for podcasting — and no longer interested in spending as much money on original podcasts or exclusive rights. Rogan could be an exception, but there are ways for Spotify to keep Rogan on its platform without losing his audience. - Television advertising sales will continue to decline, creating a crisis for several media companies.
TV networks have managed to prop up advertising sales by charging higher rates to reach a shrinking audience. Advertisers paid because they believed TV was the only place they could get audience at scale. You didn't know if your commercial led to an uptick in sales, but you believed you could get people to buy your new car if you advertised it again and again during football. That is ending. While TV still commands more than $60 billion in ad sales in the US alone, marketers are devoting more of their money to other media. National TV ad sales fell 12.5% last year, according to industry expert Brian Wieser. He projects they will fall another 9% in 2024. That's a big problem for Warner Bros. and Paramount, among others. They are going to struggle to grow and service their debt if the TV advertising business continues to melt away. - There won't be an IATSE strike.
If there is a guild that deserves a huge pay bump, it is IATSE, which includes the crews for productions all over the country. Think grips, costume designers, animators and even ushers. But the appetite for another long work stoppage isn't there after workers spent most of 2023 sitting at home. - Artificial intelligence startups will come and go. An AI-generated celebrity will make millions of dollars.
Let's take the positive with the negative. AI startups are adding billions of dollars to their valuations every week. This has all the hallmarks of a bubble, one that will burst in the next year or two. And yet, there is no denying that some of this technology will impact the creative industries. We will spend a lot of 2024 talking about lawsuits and fights between AI companies and owners of intellectual property. But let's hope we also see some interesting experiments. - The fastest-growing segment of the entertainment business will be places you can go to.
"Experiences" was Disney's fastest-growing division, posting a 16% jump in sales last year thanks largely to theme parks. Sports was down 1%. Entertainment was up 3%. Sales at Live Nation Entertainment, the world's largest live music company, increased 36% through nine months of 2023. Good luck finding another large media company growing 36%. Mighty Facebook (aka Meta Platforms Inc.) grew just 12% over the same period. And yet, this still counts as something of a surprise. Shouldn't live music have a down year after the summer of Taylor Swift and Beyonce? Nope. Swift will still be on tour and no artist makes up more than a percent or two of Live nation's sales. People are cutting back on all kinds of spending. But live experiences aren't one of them. - Streamers will start making lots more pilots.
Broadcast networks have historically made pilots to decide what to air. They buy hundreds of scripts and develop some of those into pilots as tests. Ultimately an even smaller number are made into series and make it to TV. That whole system died with streaming services, which ordered entire seasons of shows. But the pilot system wasn't broken, it just needed to change. Why, for instance, was it still oriented around the fall season, when new shows now debut year round? Pilots require a lot less money up front and let studio bosses test creative teams. They can make changes, recast, rewrite and reshoot. And if a pilot doesn't work, you can cut your losses — which are significantly less than a straight-to-series commitment. Guess what? Streaming services have started to shoot some pilots. (Yes, even Netflix.) We are officially moving in reverse! Now, for a few fun ones… - Despicable Me 4 will be the highest-grossing movie of 2024.
- Dune 2 will sweep the Oscar nominations for 2025.
- Somehow Elon Musk will fix X.
- Open AI will achieve sentience.
- The story of 2024 is "The value of the film and TV ecosystem has declined and will never rebound."
On that note, Happy New Year! At the end of every year, Michael Schneider puts together a list of the most-watched TV broadcasts (and networks). We talk about streaming so much that it's easy to forget Americans still spend more time watching live TV on broadcast and cable. The NFL had the 14 top broadcasts of the year. (The Oscars were 15th.) Regular season football outdrew the NCAA basketball title game, every NBA finals game and let's not even talk about baseball or hockey. Football is so popular that it's also responsible for two of the most-watched nonsports broadcasts. The most-watched scripted program was episode 12 of CBS's Fire Country, a drama about a prisoner who volunteers for a fire protection group in his hometown. The most-watched unscripted program was the first episode of the second season of Fox' Next Level Chef. What do these episodes have in common? They both aired after major NFL games. Fire Country, which drew 12.3 million viewers, followed the AFC title game, thereby almost doubling its normal audience. Next Level Chef followed the Super Bowl and drew 16.9 million viewers – almost none of whom stuck around for the rest of the season. A few other tidbits - NBC was the most-watched broadcast network last year, narrowly edging out CBS. But neither one is as popular as Netflix.
- The 60 Minutes episode with Prince Harry was the most-watched news program of the year.
- HBO's ratings fell 34% last year, as all premium cable networks pushed their viewers to streaming.
And here's a final doozy from Schneider: "In 2014, the first year we started this report, Disney Channel was a top 10 network, with nearly 2 million viewers. In 2023, Disney Channel is ranked No. 80, with 132,000 viewers."
The top social media streamerKai Cenat was the most-watched Twitch streamer in the world last year. He knocked xQc out of the top spot. People spent 109 million hours watching Cenat, which is a pretty meaningless metric without knowing the length of his average stream. Deals, deals, dealsShares in YG Entertainment soared last month when the company announced it had signed a new deal with South Korean super group Blackpink. But there was something missing. It didn't sign the group's members for their solo projects. I haven't been a regular listener of electronic music since college, but I recently stumbled upon South Korean DJ Peggy Gou. (She is famous; I am late to the party.) Also, if you want an upbeat party playlist that mixes generations and genres, you should use this. | 
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