How Hollywood Lost Touch With the Audience

And How to Win Them Back

One of the 14 Amazon Leadership Principles is “Customer Obsession.” On that metric, I think (most of) Hollywood would have to fire itself. Hollywood either doesn’t know who its customers are or they do not care. And no brand will long thrive while being indifferent to customers — not even “Hollywood.”

If you’re reading this, you know that Mad Max Furiosa disappointed with a $32MM Memorial Day opening. Fall Guy, with Ryan Gosling, opened at $27MM on May 3, also regarded as a disappointment (for its budget). May 2024 box office was down 29% from last year and down 49% from 2019, which is a lot. The first weekend of June did not get better.

How would we know if Hollywood was making systematically flawed content choices? After all, everything looks sort of “normal.” Movies are being released. TV shows are premiering. Don’t we have the best people doing their best?

Let’s look at multiple explanations for the rough waters. My argument ultimately is that that the audience has become skeptical and that Hollywood needs to be more in touch with the audience to improve results.

It is worth noting that when people are interested in a film these days, they clearly do know where their local theater is — Top Gun 2, Barbie, Super Mario Bros, Godzilla vs Kong, Spiderman, and Oppenheimer did great. So whatever conclusion we want to come to, it can’t be that movies just don’t fit into people’s lives anymore. Some movies are working, some aren’t. 

Here are a few other takes I have seen:

• “Bandwidth consumption has been going up —  people are using the internet too much to go to movies.” But did internet use go up 29% in the past year? 

• “It’s COVID.” That does not explain the movies that worked.

• “The strikes.” These are obviously a factor. But, again, they do not explain the underperformance of films that were released.

• “People got out of the habit of going to the movies.” Well, they seem to get back in the “habit” when there is a good movie!

• “Marvel is on the sidelines until July.” This is the best argument because if you look at the last ten Mays (excluding the “COVID years” 2020-2021), all ten have featured a Marvel movie as the #1 movie in May with a mean share of the monthly box office of 38%. However, it’s not just May. The whole year is down 24.5%. Also, in a semi-healthy market, the absence of a Marvel movie should mean more demand for another movie. That is, if you took away 40% of supply, it should not yield a deadweight 40% loss of revenue. Finally, is Marvel still the Marvel that put up those big numbers? Guardians last May has been the exception, but other than that, Marvel has been on a negative trajectory.

On to other issues —

WINDOWS & PRICING

If the movie is going to be on your TV in 2-3 weeks, it raises the bar for making the trip to the theater and I would believe that this phenomenon gains momentum over time. Added to which, once someone subscribes to something (Netflix), consumption of that thing feels “free” and as theaters and popcorn become more expensive, it makes the relative cost of the theatrical choice more daunting, as Tom Rothman recently discussed with understandable concern. 

If windows and pricing are issues, we would expect to observe that movies that were 9’s (out of 10) would do about as well as before, but the drop off for, let’s say 7’s, would be quite severe. And that is what we observe. The market is tougher than it used to be for “solid” films like Challengers or Fall Guy, but Top Gun 2 is ok.  

This is relevant and I would recommend an effort to experiment with different windowing and pricing. It is important to preserve theatrical film, and it is never too late to innovate!

SOLITUDE 

Movies are a social activity and we can observe some societal changes. Fewer people are married. Fewer people are going out. “Panache” is down 50% on Google trends since 2011! “Sexy” is down 70%! Most sadly of all, “wedding toast” is down 75% since 2004... Dating apps are way down in the past year. The number of U.S. adults who call themselves “lonely” has climbed to 58% from 46% in 2018. (I feel like we could turn all this into a country song!) More people are isolated … with phones and TVs and cats. Yikes! But like it or not, it’s true. 

I don’t think that internet use or human isolation accounts for a one year 24% downdraft but could this account for a 5% downdraft? Maybe?

I don’t have a solution for this but it seems relevant.

CUSTOMER TRUST

It’s no secret that the past seven or eight years have been extra political and extra partisan. More than partisan, I think Peggy Noonan was not wrong when she recently pointed out that there now exists a mutual hatred between opposing groups in the US.

No business has embraced the partisan spirit more than Hollywood. There is now a political layer on top of every creative and hiring decision. It affects what projects get greenlit, who gets cast, every line of dialogue, and who gets hired behind the scenes. This has changed the business and the tenor of television shows and films entirely.

The recent opacity around what is a “hit” on streaming has insulated executives from scrutiny of their results. Much more than ever before, execs now get and retain their jobs through social cohesion and conformity (as one anonymous exec put it, interviewed by Elaine Low at the Ankler, “If you're wondering why there are so many mediocre movies and TV shows, it's because people are hired based on their network, not their taste”). At the highest level, it appears to be impossible to be fired if the political optics would be bad.

This creates, for execs, an unprecedented sense of being in a secure bubble where political gestures, like making political statement films with poor commercial prospects, are smiled upon and making commercial films that violate the preferences of the “in group” is probably the only way really to lose your standing in the community.

Some senior execs have developed strong public brands around politics. Prominent producers have posted reading lists denouncing American culture as a whole. If you take a walk around X and YouTube, you will see that this is already an issue and these people are increasingly famous for their politics.

Maybe people will let this all go. Or maybe not. Maybe it will get a lot bigger. Talent can say what they want but this kind of thing where studios, execs and producers are famous amongst the fanbase for controversial political opinions is unprecedented and risky.

The Case of Comedy

One example of the politicization of Hollywood has been the dramatic decline in theatrical comedy. For whatever reason, comedy and the new regime do not get along. Below we can observe the number of comedies released each year followed by % of box office, total domestic gross and tickets sold. Before 2017, comedy was always 12% to 15% of box office. In 2017, it abruptly dropped below 8% and stayed there (except for 2023 when Barbie was classified as a comedy and gave it an outlier bump). The mean number of comedies in the 2011-2016 period was 105 which declined to median of 62 thereafter, a 40% decline (I used median because 2020 is an outlier year). 

The decline of comedy alone could account for about 9 percentage points of box office decline. And it could also create a certain alienation between the audience and the Hollywood brand. There is no evidence that audiences no longer like comedy. In unfettered environments such as standup and on YouTube and TikTok, comedy continues to thrive.

Other Quirky Choices

Does it seem like no one can have a romance any more? Romance has always been an ingredient of life and therefore film but now it is fraught and an element of storytelling has been lost or at least diminished. You could say that this is in line with reality, but then people really responded to Anything But You.

Once the politics came in, more daring, envelope pushing projects were put in the bin with comedy. The whole genre of The Wire, The Sopranos, The Shield, Mad Men, Breaking Bad, and even films like Birdman, Boyhood and others seemed to disappear. As I have noted before, television series rated 8 or above on IMDB fell off dramatically after 2017. Yes we do occasionally get a Shogun or White Lotus, and Poor Things will sneak in through the indie circuit, but there is no comparison between 2015 and 2023/2024 in terms of daring and quality in mainstream entertainment. The more edgy or hard funny series have largely been supplanted by true crime, which is … a choice.

69% of the opening weekend audience for Barbie was female. 70% of the opening weekend audience for Furiosa was male. Top Gun 2 was 58% male. That’s ok. Though there are some things without a significant gender skew, most IPs, and even genres, lean toward one group or the other. When one group really likes your product and another does not, it is business 101 to double down on the customers who like you. That is what works. Hollywood is doing the opposite. If you look at Star Wars and Marvel and Rings of Power (and the like), they have been trying to double down on their non-audience. You know what doesn’t work? Vegetarian meat. NASCAR for Harvard professors. Who wants that? And indeed Hollywood has been sapping the energy out of some legendary IPs without much to show for it except for an annoyed fanbase. What choice would you make if you wanted to make money for the company?

(I could paste the South Park videos about Kathleen Kennedy in here but I presume you’ve seen them.)

The quirky choice of films, shows and casting in this new era has meant that Hollywood is not creating new stars at the usual rate. The press and Hollywood has bent over backwards trying to wish certain stars into existence with cover stories and so on, but it doesn’t work that way. You become a star by headlining an original, successful film — Anything But You, or Elvis. There are four or five thirty year olds out there who should be stars but aren’t, and it limits Hollywood’s options when trying to package new films. I notice that in casting He Man Masters of the Universe, Amazon went with someone from their series Red, White and Royal Blue. No offense, but I guess Chris Hemsworth wasn’t available? Presuming that He Man is a guy-skewing property, how many guys do you think watched Red, White and Royal Blue?

If you look at the decline of comedy and the changes made to big male-skewing properties and genres, it’s hard not to conclude that there simply isn’t as much for guys. You know what’s growing while Hollywood shrinks? YouTube (skews male). Steam (skews male). Fortnite, etc. If you alienate an audience, they will leave.

Beyond the Politics

I have remarked before that the culture of the senior ranks of executives tends to be pretty old school, nostalgic, anti-tech, and just out of touch with what I would call the edge of contemporary culture. If given a wand that could wave away the internet, almost all senior Hollywood execs would wave it all over Wilshire Blvd.

TikTok, Cannes and the Future of Film

Fall Guy is a 40 year old TV property. No one was waiting for the Fall Guy movie. The poster looked very old school. I don’t want to rag on Fall Guy too harshly but … why Fall Guy? Now He Man is on its way from Amazon. The last He Man movie grossed $17MM at the box office in 1987. In 1994, Shawshank Redemption, Pulp Fiction, Forrest Gump and Jurassic Park were all in theaters at the same time. Avatar grossed $750MM domestic in 2009 (#1B+ in today’s dollars). The unwarranted fear of originals and affection for IP — any IP! — has overwhelmed Hollywood and I take as a sign of a weak development process.

Who is the audience? Well, half the country voted for Trump (and may yet again), 40% of Americans own guns, ~40% of Americans go to church once a month or more, and 74% of the country does not live on the West Coast, in New York or in New England. And, of course, 50% or so are male. It seems like none of these people are (meant to be) customers of the new Hollywood. And however satisfying all of this Hollywood experimentation may have been in theory, actual results have not been great. A large part of the audience is not aligned. If that group is going to go to the theater, their expectations are low and they have to steel themselves for a political experience. Just as we have seen trust in the media fall off, I believe that customer trust in the Hollywood brand has substantially deteriorated because people aren’t programming for the whole of the audience.

People used to hate lawyers. Now there is ill will for lawyers and journalists. Ideally Hollywood executives would not be added to the list. Partisan bubbles are natural in politics, but unhealthy in a commercial enterprise. This is something that Hollywood founders and their near successors would never have done — because they wanted Hollywood to succeed.

Now, instead of giving titles the benefit of the doubt, or being enthusiastic by default, a large part of the audience, both in the U.S. and abroad, has lost trust, lost faith, in Hollywood. They have been burned too many times and now they are skeptical and have to be convinced to give it a shot. They can be convinced, but they are harder to convince. I don’t think this is the only factor but I think it is factor #1. 

That trust has to be earned back.

THE SOLUTION

I think some customer-obsessed changes could help. Three possibilities —

• People could self-reform and try to serve the whole of the market again, with more focus on entertainment.

• The companies could realize that customer obsession matters and make changes from above. This doesn’t mean they have to be political the other way, by the way. It would mean that they aren’t political.

• A new, alternative outlet could thrive. An alternative outlet would either be a streaming service started from scratch (unlikely) or from a merger of existing subscale entities. Or there could be an “open source” service to which anyone could upload a series or a movie. Since it would be open to all filmmakers and all financiers, we would likely see all sorts of content. It would also likely work better for creators who I think would wind up with more control and ownership.¹

Customers will find entertainment where they will and these days they have many options. In 1940 Samuel Goldwyn was talking with a writer and (they say) the discussion went like this:

“Mr. Goldwyn,” he said, “this is a wonderful opportunity to point out labor’s battle against capitalism. You have a chance here to bring a great message to the people.”

Goldwyn looked at him. “Messages, messages,” he said. “From Western Union you get messages. From me you get pictures.”

Pictures! That’s what we need!

---

Roy Price was an executive at Amazon.com for 13 years, where he founded Amazon Video and Studios. He developed 16 patented technologies. His shows have won 14 Best Series Emmys and Globes. He was formerly at McKinsey & Co. and The Walt Disney Co. He graduated from Harvard College in 1989. 

1. Discussed here.