Goodbye to Hollywood’s Panic Room Era
What gets better from here? What gets worse?
It seems to be a consensus that the times are changing – there's a "vibe shift," as they say. Paramount is doing Naked Gun, an honest to goodness R-rated comedy, and people are saying good things.
Did they not get the memo about comedy? Has the memo been retracted?!
COVID; MeToo; BLM; the disappearance of the China market; major strikes; the rise of YouTube; acquisitions at Warner Bros. and Fox; layoffs; the decline of theaters; a 40%+ decline from "peak TV"; Disney went up 1% a year for eight years while Warner Bros. went down 12% per year and Paramount went down 20% per year; Otium, Church & State, Le Petit Bistro, and Bouchon closed; agency packages were deleted (!); and streaming increasingly dominated everything.
Together, these events triggered a panic spiral of risk-aversion and Hunger Games-style infighting such as the industry has not seen since the Hays Code.
Hollywood responded with some… choices. Comedy was essentially declared dead. Shows deemed too smart, "elite," or hard to write disappeared. This would include, say, The Sopranos, The Wire, Breaking Bad – basically all of the best shows ever made (which is not to say that I did not like Succession or Shogun – there are still a few). First came a purge of some genuinely bad people. Then came a purge of anyone who had ever parked in anyone's space. People went on strike. Networks stopped ordering. Writer hiring declined precipitously. Though there were some rich overall deals, most backend was replaced by bonuses that wouldn’t buy a guest cottage in Montecito.
If Hollywood's drug of choice in the 80s was cocaine, in the "roaring" twenties, it's Lexapro.
This era needs a name. I have thought – the Streaming Era? But we are still in that.
The "Content" Era? Not bad.
But I think I like the Panic Room Era, which really captures the unsettled and erratic state of the business and its people.
Honestly? Not a great (eight year) decade in my opinion.
That said: what do we have to look forward to?
And what do we have to fear?
What will be good about this new era?
Four predictions.
DIY IP
Creators will have the ability to create popular IP without giving up their rights. This is emerging today. There are many platforms where you can get ideas in front of people in various forms without any transfer of rights – YouTube, TikTok, Instagram, Facebook, WattPad, WebToons and others. Now, there are many legitimate discussions to be had about AI and I am going to save those for another day and just point out that AI will make this considerably easier. Not only can people popularize ideas, they can also build their personal brands.
This is all happening now of course, and there are a few success cases, but I think it will become more important. This is good because there is a huge difference between having an idea and selling it to a studio or network and, on the other hand, having an established property that you then license to a studio or distributor. Some creators may be totally satisfied with their YouTube economics and never license it at all. Great for creators.
The Return of Popular Taste
As loyal readers know, I have been disappointed by the disappearance of certain types of shows and movies over the past eight years. I believe that this is no longer sustainable. For one thing, times are tough. We can’t be casting aside our best work or entire popular genres. Second, as discussed, many have realized that the idea that the Hollywood bubble is always right about what people want has been punctured by recent events. There is clearly an audience out there that is not having lunch at the Farmshop and is basically not aligned with Hollywood’s recent preferences. And they have money.
Bottom line: when Hollywood stays tightly snuggled in its bubble, it becomes weaker. People have to get back to asking, “will it play in Peoria?” And I suspect at least for a while, they will.
Creator Ownership Begins
Look at Ryan Coogler’s deal on Sinners. After twenty-five years, he will own the copyright to the film (he’ll be 63). Big congratulations to Ryan, his agent Craig Kestel (WME) and his lawyer Jonathan Gardner! That’s not going to become the default deal, but as the value of entertainment companies depends more on streaming wins today than on their libraries tomorrow, you can imagine this happening more.
I could also imagine talent more often bringing their own financing, especially if platforms emerge to connect them with global investors (imagine kickstarter but with real securities). For top creators this would promise greater upside.
Finally, it is not out of the question that the federal government could try to reinstitute some modernized version of the financial syndication (“Fin-Syn”) rules that prevailed from the 70s to the 90s and that required networks to buy shows from independent studios. I personally find it hard to imagine that this gets to the very top of Washington’s to do list, but you never know. Donald Trump does have an interest in Hollywood…
Purging
I have written about this before so I am not going to go into detail. But I think the process left a lot to be desired. I suspect this kind of thing will be handled in a more orderly and just way in the future. But you never know!
What could be bad?
Cable
No one knows the future trajectory of traditional pay TV. Is it possible that, having declined precipitously, it finds its floor and stabilizes? Except for Blockbuster, few things actually go away. But if the decline of pay TV is worse than hoped, a lot of cash and value seep out of the Hollywood ecosystem, to be replaced by bupkis. Though not everyone intuitively agrees, I believe that it is better for everyone if the major entertainment companies thrive.
Consolidation
More buyers are always better than fewer and the majors would like to consolidate a bit more until there are more like three big entertainment companies. This might not happen because of antitrust law, but to be honest it is hard to argue that a merger of say Paramount and Warner Bros. would negatively affect consumer prices. But on the whole I think that substantial consolidation would have a variety of bad consequences.
Indie
Indie is not just about making a special film. You have to pick the right special films and they have to be well marketed. I feel like this is happening less than it used to. Moreover, as discussed, indie films are spread out across all of the services, which makes the whole category harder to follow. Anora and Poor Things get a lot of attention, but there are a lot of other films that did not enjoy anything like that kind of success. Will indie financing hold up?
AI Apocalypse
In the worst case scenarios around AI, it does all the writing and makes the movies and there is nothing for us to do but watch the computer sit there and do all of Hollywood without even going to lunch. Or people start enjoying an entirely different sort of customized instant entertainment.
It sounds revolting, I know, but it is possible.
Mounjaro
Omg what if there is some secret problem with Mounjaro that we only discover in ten years. What if it affects the brain? What if it subtly rewires personality — drains empathy, heightens vanity, frays attention span? What if it turns people into addled, narcissistic ghouls?
Oh wait…
Seriously though — we all look amazing. Let’s just pray it’s not embalming fluid in a pen.
What Should Happen
Hey, what’s your favorite show?
That isn’t White Lotus, I mean.
I believe that the shows and movies are worse and the numbers back me up. As I have shared before a few times (so I won’t burden you with it again), new, original series that scored above an 8 on IMDb took a nosedive after 2017. Actually, they didn’t decline everywhere. Whatever affected Hollywood did not, apparently, happen at HBO. But every other place suffered a sharp decline in shows that America thought were truly excellent. Which is not to say that America did not watch The Night Agent or Ginny & Georgia, but they didn’t put them in the same league as, say, The Sopranos. Or Marvelous Mrs. Maisel. Or pick your show from the teens.
Reporters apparently cannot comment on this obvious fall off. It seems that no matter how clear the data is, you just can’t say in an article that “the network is experiencing flat growth mainly because their shows are thoroughly mediocre.” But that’s the beauty of Substack.
This was done on purpose. Or at least things were done on purpose that inevitably produced this result.
I think what we need is either (a) distributed development and producing where it really is more like being in a fin-syn world where indie studios – or even parallel, independent pods within the streaming behemoths – compete with each other and provide a large portion of each streamer’s programming, or (b) at least, we need someone at the top of each streamer who only cares about success. Because we want good shows and movies.
Experimenting with film windowing and possibly with the length of licenses of independently produced TV shows could make the economics of films and shows better by giving them more upside in success. I think there are some worthwhile experiments to be done here and I hope people do them.
I would like to see one kind of consolidation – I want the whole indie space, at least on the distribution side, to consolidate, if not into one company, then at least into one streamer. This is completely doable and it would find an audience (discussed here).
Finally, we have to drop the whole AI subplot. I forget who pitched it in the room — it was very late at night and obviously wasn’t thought through to the gory end. We’re just going to write Sam Altman out of the show. We’ll say he forgot his password, tried ten variations that didn’t work, and his computer self-deleted. Too bad!
But seriously — what is the non-disastrous AI outcome?
Maybe it’s not that AI writes everything or does everything. Maybe the key is this: you can make a Star Wars or Marvel movie for $10 million below the line. Maybe less.
Some interesting implications to consider:
Adult dramas and comedies might not be affected much. Their budgets are already low, and audiences may prefer that they feel more genuine.
Genre filmmakers would gain new autonomy — raising money and producing sci-fi, action, or horror independently, with greater upside.
We’d probably get more originals and fewer sequels.
Competition would go global. A great team in Nigeria could bang out incredible new franchises.
Stars would remain valuable. With more content in circulation, a star’s involvement could become an essential marketing differentiator.
Studios would focus more narrowly on marketing and distribution. Unless, of course, an open streaming platform emerges where entrepreneurial filmmakers can upload their work directly. (I’ve recommended this before.)
Deceased stars would make a comeback. 1984 Schwarzenegger or 1972 Bruce Lee would be in very high demand.
That’s the pitch. Back to you, Hollywood.
I hope the name for this new decade is something amazing.
RP
I never knew you had a Substack--just subscribed.
The problem with your point on good shows is that "good" is in the eye of the beholder. So what you and I consider "good" is not necessarily what people in some mythical Peoria consider "good."
It all comes back to those two anonymous quotes you are no doubt familiar with-- that Netflix neeeds to "stop making snobby shows no one watches" and that comedy writers only want to write for Barry and "you know who watches Barry? Nobody!"
With, as you note, the exception of HBO and (to some degree Apple, which still hasn't decided if it's an actual streaming service or a marketing ploy) all of the other streamers decided they needed to pivot to pablum, to create shows like The Night Agent that are pefectly fine and will get far more viewers than The Crown.
It seemed to make sense--the more mainstream programming there was, the more subscribers you'd get.
WBD's problem with naming their app sums it all up nicely: despite shows like The Sopranos and The Wire, pre-streaming HBO never had that sizeable a subscriber base. There are, it seems, a lot more people who like their TV to be less challenging. And so did you turn them off by having "HBO" in your name if your goal was to become the next Netflix? Or was it a way to plant your flag, to say, "if you want something that moves you and makes you think, we're your guys."
The latest swtich seems to have been spurred by the acknowledgment that they were never going to be the next Netflix. Or Amazon. And for a sizeable group of people, HBO is always going to be the number three of choice, so why not cater to them and be that third choice?
But back to your original point: what we can best hope for as we come out of this tunnel is that Hollywood realizes that the type of show that we cultural elites consider good is not toxic, that it finds an audience, generates a lot of buzz and ultimately serves to enrich whoever is streaming it.
It's unlikely to be a full renaissance, but I'll settle for a mini-one.
The Age of Consensus.